A California-based skilled nursing landlord says it suspects that Texas’ largest operator will not be able to come out of bankruptcy and is therefore actively looking for another tenant.

Officials with LTC Properties revealed their strategy Friday morning during an earnings call with investors. Clint Malin — chief investment officer for the Westlake Village, CA, real estate investment trust — didn’t mince words when asked about Senior Care Centers, which filed for Chapter 11 in December. He said LTC Properties is working with a backup tenant to take over its 11 properties now occupied by the troubled operator, in the event that things fall apart.

Clint Malin

“We don’t think Senior Care as an organization, as it’s structured today, is going to survive in bankruptcy. So, we want to be prepared for the alternative,” Malin said.

LTC Properties said in December that it had not received rent from SCC, which leases 11 skilled nursing centers from the company in Texas. As such, the REIT requested a consensual termination of those rental agreements and was “strongly urging” its occupant to reject current leases in the restructuring process. Malin said that a switchover in tenants would require approval from the bankruptcy judge.

Wendy Simpson, president and CEO of LTC Properties, said her company is now “proactively negotiating” a potential new master lease with a different Texas-based operator that’s already familiar with the locations. She emphasized that it is still early in the process, and echoed doubts about SCC’s ongoing viability.

Malin said he doesn’t believe LTC Properties would experience any “downtime” at the SCC buildings, as the Texas licensure process in the state is “advantageous” for landlords and should be resolved quickly. Despite losing out on nearly $2 million in SCC rent payments, LTC Properties reported a net income of $30.6 million for the fourth quarter, up from $19.8 million in the same period the previous year.

A Senior Care Centers spokesman did not immediately respond to a McKnight’s request for comment Friday. The Dallas-based operator filed for Chapter 11 in December, saddled with more than $100 million in debt and hampered by what it called “ballooning rent payments.”