Ventas CEO Debra Cafaro

Kindred Healthcare Inc. has entered into an agreement to purchase 36 skilled nursing facilities from Ventas ahead of its exit from the skilled nursing sector, the provider announced in November.

The deal, which carries a $700 million price tag, allows Kindred to purchase some or all of the facilities, which it already leases and operates. 

Leases for any facilities that are not acquired from Ventas by April 30, 2018, will be renewed at their current rent levels through 2025.

Kindred intends to sell the facilities it purchases from Ventas as a way to facilitate its skilled nursing departure, which is slated for completion before the end of 2017, company officials said. 

The sale of the facilities is expected to bring in $100 million to $300 million for the provider.

“With the option to cause the sale of the Ventas Properties, we have the flexibility to pay Ventas as we sell these properties, in conjunction with the sale of our other nursing center assets,” said Kindred President and CEO Benjamin Breier. 

“As we have in the past, we will continue to work constructively with Ventas as we find qualified operators for our nursing centers and effectuate an orderly transition for our patients, residents and employees,” he added.

Ventas Chairman and CEO Debra Cafaro echoed Breier’s sentiments in a statement of her own, saying the deal will give Kindred “strategic flexibility and significant cost savings, as it continues to re-shape its business.”

Following the expected sale of the 36 facilities, Ventas’ skilled nursing rent income will be reduced to 1% of the real estate investment trust’s total business. 

The remaining skilled nursing facilities in Kindred’s portfolio include 26 communities that the provider already owns, 25 that are rented from other companies, and four managed nursing centers.