Close up image of a caretaker helping older woman walk

One of the nation’s top post-acute care providers has entered into a lease agreement that would allow it to buy back 18 skilled nursing facilities it previously leased. 

Genesis HealthCare announced the agreement Wednesday. Genesis will now hold about a 30% ownership stake in the 18 facilities under the new agreement. The company also has a purchase option to acquire the facilities in 2024 at a 10% premium above the original acquisition cost. 

The company said the agreement is similar to its real estate partnership with investment firm Next Healthcare Capital, which allowed Genesis to buy back 15 skilled nursing facilities it had been leasing. 

“Like Next, this delevering transaction provides us with the opportunity to participate in any upside accretion in the value of the real estate and is a positive step toward our goal of owning or having fixed price purchase options on 30% of our assets by the end of 2020,” Genesis CEO George Hager Jr. said in a statement. 

The 18 facilities had been included in Genesis’ master leases with Second Spring and Welltower and were subject to annual rent escalators ranging from 2.0% to 2.5%. Rent escalators won’t begin until the fifth year of the new agreement.

Genesis also announced that it sold eight SNFs to third parties for a total of $89 million in separate deals. Money from the sales will be used to repay indebtedness and fund transaction expenses, officials said.