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LTC Properties Inc. to Buy Skilled Nursing Facilities

Westlake Village-based LTC Properties Inc. has agreed to acquire four skilled nursing properties in Texas that include a total of 524 licensed beds. The aggregate initial purchase price is $41 million. The final acquisition price not to exceed $52 million is subject to two earn-out payments, each contingent upon the properties achieving a sustainable stipulated rent coverage ratio. The transaction is scheduled to close on or about March 9. Simultaneous with the purchase, LTC Properties will lease the properties under a 15-year triple net master lease to an entity affiliated with the seller. The lease will contain two five-year renewal options and annual escalations of 2.5 percent for the first 10 years, as well as annual escalations of 3 percent thereafter. The acquisition will be financed by the use of funds from the company’s unsecured line of credit. Projected revenues provided from the acquisition of the four properties for calendar years 2011 and 2012 are $3.6 million and $4.3 million, respectively, assuming no earn-out is paid in those years. Those projections include non-cash straight-line rent of about $600,000 in 2011 and $600,000 in 2012. LTC Properties is a self-administered real estate investment trust that primarily invests in long-term care and other health care-related facilities. Jessica Vernabe

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