HCP spins off troubled HCR ManorCare
HCP Inc. will spin off HCR ManorCare, its skilled nursing and assisted living portfolio, into an independent real estate investment trust, the company announced in May.
The new REIT, SpinCo, is slated to have a portfolio of more than 320 properties from HCR ManorCare and other HCP skilled nursing assets. It will have net annual rent of $485 million. Mark Ordan, former chief executive officer for Sunrise Senior Living, will be SpinCo's CEO. The company expects the deal to be finalized in the second half of 2016.
The spin-off will allow HCP to focus on its “stable, private-pay” assets that aren't as dependent on government reimbursements, HCP President and CEO Lauralee Martin said in a press release.
ManorCare was targeted by the U.S. Department of Justice in a lawsuit filed last April, alleging the provider submitted false claims for therapy services.
ManorCare “has been a terrible drag on [HCP],” Bloomberg Intelligence analyst Jeffrey Langbaum told Bloomberg. Pressure on HCP to act on ManorCare increased last year after fellow REIT Ventas spun off its skilled nursing facilities, Langbaum added.