LTC Provides Update on Thrive Portfolio

June 11, 2019

WESTLAKE VILLAGE, CA–LTC Properties, Inc. (NYSE:LTC), a real estate investment trust that primarily invests in seniors housing and health care properties, today announced an update on its six-property portfolio with Thrive Senior Living.

Two properties were transitioned on June 1 and are being operated by Trilogy Management Services (TMS), a new relationship for LTC. Combined, the properties include 120 memory care units in Louisville, KY, and West Chester, Ohio. The two properties are under a 10-year master lease with initial annual cash rent of $1,250,000 in year one, $1,500,000 in year two, $1,975,000 in year three and $2,150,000 in year four. Rent may increase subject to a contingent escalation formula commencing in year five and annually thereafter. TMS is based in Louisville and currently manages more than 100 seniors housing and health care communities throughout the Midwest.

Three properties are being transitioned to LTC’s current operating partner, Veritas Healthcare Group. In total, the three properties include 215 assisted living and memory care units. The property located in Corpus Christi, TX, was transitioned on June 1 and added to an existing master lease with an affiliate of Veritas. Annual cash rent under the existing Veritas master lease increased by $400,000 effective on June 1 and will increase by an additional $300,000 on June 1, 2020. Beginning on June 1, 2021 the $700,000 of increased annual cash rent attributable to the Corpus Christi property will increase by 2.50% and annually thereafter. Additionally, LTC will be entitled to incremental rent calculated as a percentage of increases in gross revenues generated by the Corpus Christi community above an established threshold.

Subject to regulatory approval, which is expected on or about July 1, Veritas will commence operating the remaining two properties located in Athens, GA, and Murrells Inlet, SC. The Athens and Murrells Inlet properties will also be leased to an affiliate of Veritas in a separate master lease with a two-year term. The initial annual cash rent will be $1,762,000 and will increase by 3.50% in year two. Veritas is based in South Haven, MS, and will operate 21 seniors housing communities throughout the South, including 13 owned by LTC once the transition of all three properties is complete.

The remaining Thrive-operated property in Jacksonville, FL, is being actively marketed for sale.

“After identifying certain challenges related to the Thrive portfolio, we took decisive action to find a solution in the best interest of LTC and our shareholders. We have made considerable progress by leasing the majority of the properties to excellent regional operators, while actively marketing the remaining property,” said Wendy Simpson, LTC’s CEO and President. “We are thrilled to add Trilogy, a well-known and highly respected regional operator, as our newest relationship and to grow our successful partnership with Veritas, who has been an operating partner of LTC since 2014.”

LTC is a real estate investment trust (REIT) investing in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint-ventures and structured finance solutions including preferred equity and mezzanine lending. LTC holds more than 200 investments in 28 states with 29 operating partners. The portfolio is comprised of approximately 50% seniors housing and 50% skilled nursing properties.

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