Ventas Sells 12 Seniors Communities to Assisted Living Concepts for $100M

The transaction resolves recent litigation between the two companies and also severs the ties between them.
Ventas CEO Debra Cafaro

Under somewhat unusual circumstances, Ventas Inc., of Chicago, has sold 12 senior housing communities to Assisted Living Concepts Inc., of Menomonee Falls, Wis., for $100 million in cash, Ventas announced Monday. The transaction resolves recent litigation between the two companies and also severs the ties between them.

Up until the sale, ALC had been the tenant of the communities. At closing, the leases were terminated, so that Ventas no longer owns any assets operated by ALC. In addition, the parties have agreed to dismiss the lawsuit filed by Ventas on April 26 in the U.S. District Court for the Northern District of Illinois, Eastern Division.

According to a report at the time by Senior Housing News, the suit alleged that ALC was in violation of its lease with Ventas because of   several ALC entities facing state regulatory actions for violations of regulatory statutes.

These regulatory actions, the complaint stated, threaten permanent revocation of the required operating permits, license, or other authorizations in which, pursuant to the master lease agreement, Ventas has been granted a first priority security interest….

A source familiar with the transaction told Commercial Property Executive that the 12 properties, in Georgia, Alabama, South Carolina, Florida and Pennsylvania, were covered by two master leases. With this sale, there are now no further relationships between the two companies, said the source, who spoke on condition of anonymity.

This transaction allows ALC’s new chief executive officer and its Board of Directors to focus their attention and resources on providing quality care for its residents, said Ventas chairman and CEO Debra A. Cafaro (pictured).

The comment apparently refers to U.S. Air Force Lt. Gen. (Ret.) Charles H. Chip Roadman II, M.D., who was named ALC’s interim president and CEO in late May. Dr. Roadman is a member of the ALC board of directors, a former Surgeon General of the U.S. Air Force, and a former president and CEO of the American Health Care Association. An obstetrician and gynecologist, he is also a Distinguished Professor at the Uniformed Services University of the Health Sciences, Bethesda, Md.

Meanwhile, a Ventas spokesperson noted that the company has completed more than $12 billion in acquisitions in the past 12 months, making it the nation’s most diversified healthcare REIT, with the nation’s largest portfolios of senior housing and medical office buildings.