Ventas, Kindred Reach Terms on SNF Assets

Cafaro says the deal will improve Ventas’ portfolio.cafaro

CHICAGO—Ventas Inc. and Kindred Healthcare Inc. said Monday they had agreed on a plan to facilitate Kindred’s exit from the skilled nursing segment, which Louisville, KY-based Kindred announced this past Thursday. Under the agreement, Ventas will either sell Kindred up to 36 of the Ventas-owned, Kindred-operated skilled nursing facilities in Ventas’ portfolio, which Kindred can then resell at a later date, or renew the current leases on any unpurchased SNFs through 2025 at current rent levels.

If Kindred acquires all 36 of the SNFs, the aggregate purchase price will be $700 million, representing a 7% yield on current cash rent. Also as part of the agreement, Ventas and Kindred have extended to ’25 the lease term for all of Ventas’ long-term acute care hospitals operated by Kindred, which were scheduled to mature in 2018 and 2020. Current rent levels will be maintained under the extension.