Ventas to Sell 64 Healthcare Assets

Ventas Inc. has announced plans to market 64 healthcare properties, which generate $77 million in annual rent and are presently leased to Kindred Healthcare Inc.

February 27, 2012
By Barbra Murray, Contributing Editor

A premier opportunity is headed for investors in the healthcare real estate sector. Ventas Inc. has announced plans to market 64 healthcare properties presently leased to Kindred Healthcare Inc.

The portfolio, generating $77 million of annual rent, consists of 54 skilled nursing centers and 10 long-term acute care hospitals operating under four separate master leases. And expiration dates are fast approaching.

Kindred will have to decide if it will avail itself of renewal options on 56 of the properties by April 30, 2012. The company recently indicated that it will sign a five-year lease renewal for 25 of the communities, including 19 nursing and rehab facilities and six LTAC hospitals.

Ventas, however, is not sweating bullets regarding tenancy. “The facilities are profitable at current rent levels and they would be attractive to a variety of healthcare providers if they do become available for re-leasing,” Debra A. Cafaro, chair and CEO of Ventas, noted during the REIT’s fourth-quarter earnings conference call earlier this month. “So, whether it’s with Kindred or with new Ventas tenants we feel confident about the expected outcome of the 2013 renewal process.”

And Ventas has every right to feel confident about finding a buyer or buyers for the assets, as the healthcare sector is a real estate investor favorite right now. “We expect the product sector to remain much in demand in 2012 as the broader economy continues to struggle to re-energize itself,” Mindy Berman, managing director, healthcare capital markets with commercial real estate services firm Jones Lang LaSalle, noted in a recent report. “The proven track record of healthcare real estate through downturns and the compelling demographics of the sector will keep propelling activity and pricing levels throughout 2012.”

Ventas, which has a diverse portfolio encompassing in excess of 1,300 assets in the U.S. and two Canadian provinces, is putting the properties up for sale in an effort to, as Cafaro noted in a prepared statement, improve the company’s diversification and broaden its tenant base.