Rats Jumping from a Sinking Ship?
In September, CMS posted ownership data for 15,000 nursing homes. The federal agency identified holding companies and consulting firms to data on the website. However, the data is based on unreliable self-reported information. Recently, McKnight’s reported major moves in the long term care industry. Sabra and Promedica are selling out. Leaving devastation in their wake.
Real estate investment trust Sabra Health Care REIT will “transition” a 24-property skilled nursing portfolio to two of Sabra’s existing tenants, The Ensign Group and the Avamere Family of Companies. Ensign will add 20 properties to two master leases with its operating companies. Avamere will add four properties in Washington state to its existing master lease.
At that time, Ensign will become one of Sabra’s largest tenants, representing approximately 8% of annualized cash net operating income. Avamere will remain one of Sabra’s largest tenants, also accounting for approximately 8% of annualized cash NOI.
Ensign CEO Barry Port said that Ensign was “honored that Sabra will be entrusting us with the operation of this portfolio and are very excited to expand our growing relationship with them.” The initial annual rent attributable to the 20 properties going to Ensign will be $29.4 million, with Consumer Price Index-based annual rent escalators not to exceed 2.5%.
Avamere CEO Rick Miller characterized Sabra as “a valuable, highly regarded and collaborative partner to Avamere, our valued workforce, and our customers” and said the company was “eager” to bring Avamere’s culture to the facilities.
Sabra will profit a total of $14.7 million in revenue from the facilities during the fourth quarter through the end of the transition period.
The initial annual rent attributable to the four additional properties leased to Avamere will be $5.1 million, with an annual rent escalator of 2.75%.
Real estate investment trust Welltower announced that it will move 147 skilled nursing facilities currently operated by ProMedica Senior Care into a joint venture between Welltower and Integra Health. ProMedica’s December 19 departure from a skilled nursing joint venture as a way to resolve its “ongoing operating losses.”
ProMedica said it would transfer the real estate and management of all of the SNFs that are part of the joint venture and master lease, respectively, between ProMedica and Welltower by Dec. 19. Welltower released ProMedica from its skilled nursing lease obligation for these considerations, which totals $500 million.
ProMedica will surrender its 15% interest in the skilled nursing assets currently held within the joint venture.
ProMedica Senior Care will continue to operate 58 private-pay senior living communities. The facilities are all Arden Courts memory care communities within its joint venture with Welltower. ProMedica Senior Care will continue to operate 10 skilled nursing facilities that are not part of the Welltower transaction.
The news of the transaction comes after the announcement of the Nov. 1 retirement of ProMedica CEO Randy Oostra after 25 years. His successor is Arturo Polizzi.
The basics of patient safety is safe staffing. Safe staffing means ensuring that every nursing home provides a sufficient number of qualified staff to provide care.