Ventas to Transition 90 Eclipse Senior Living Communities
Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) today announced that it intends to transition operations of 90 senior living communities owned by Ventas (the “Communities”) that have been adversely affected by the COVID-19 pandemic to eight experienced operators (“New Managers”) to best position the Communities to benefit from the expected cyclical recovery of senior living. The Communities are currently operated under management agreements with Eclipse Senior Living (“ESL”), which was party to the strategic decision behind the transition.
The transitions are designed to execute on the Company’s senior housing strategy that matches the right asset with the right market and the right operator. The New Managers are expected to provide strong local market focus and oversight for the Communities. They are experienced in middle market assisted living and have strong geographical overlap. The Communities will be operated by the New Managers under incentivized management contracts.
The Communities are located in 20 states, principally in markets with positive forward supply-demand characteristics, which should position the Communities to recapture value and net operating income (“NOI”) over time as the COVID-19 pandemic abates and the industry recovers. The Communities were not contributors to the Company’s overall NOI or its Senior Housing Operating Portfolio (“SHOP”) NOI in the second quarter 2021. Ventas expects to incur certain one-time transition costs and expenses in connection with the transitions.
Ventas expressed its appreciation to everyone at ESL for their hard work in managing the Communities. ESL and its key principals have agreed to facilitate an orderly transition to the New Managers. ESL is expected to cease operation of its management business in 2022 following transition of the Communities. Most of the transitions are expected to be completed by the end of 2021, subject to final documentation, regulatory approvals and other customary conditions.
The announcement follows Ventas’ $2.3 billion acquisition of New Senior Investment Group, Inc. last month. The portfolio includes 103 private pay senior living communities, including 102 independent living communities, totaling 12,404 units located across 36 states in the United States.