Toronto-based healthcare real estate company Invesque is selling 50% of its assets currently managed by post-acute care operator Symphony Care Network, due to the ongoing public health crisis, executives announced Thursday morning.
“The pandemic has been particularly hard on the skilled nursing sector and Symphony is not immune,” Invesque Chairman and CEO Scott White said during a third-quarter earnings call.
“[It] has taken a meaningful toll in the operations of the Symphony portfolio, including reduced occupancy and increased operating expenses. We have been working diligently with them for several months to address the immediate needs created by the pandemic along with a long-term mutually beneficial structure,” he added.
The companies announced that they’ve entered a non-binding memory of understanding that sets a new framework for their relationship moving forward. Under those terms, Invesque agreed to sell half of its Symphony assets back to the company and/or to a new operator. The companies also plan to enter into an amended and restated 15-year, absolute-triple net master lease for the remaining properties to be operated by Symphony. Invesque executives hinted at the moves during their second-quarter earnings call in August.
“Symphony remains an important strategic partner of ours, and we look forward to solidifying our relationship for long-term success,” White said Thursday.
Executives stated they are confident the structure and the terms of the agreement will be finalized in the next 60 days. White added that the move was “the best possible outcome is for us to reduce some of our exposure.”
“We also wanted to give Symphony the opportunity for long-term success,” White explained during the call.
“We realize that we are at, what I believe is, a trough in the industry and to not be there as a supportive partner to help Symphony at a time that they need to help the most is not how we operate and it’s not how we view the world, so the construct is such that we will set them up for long-term success. We’ll create a restructure that we believe is fair and reasonable and long-term sustainable,” he added.