Sabra Health Care is finalizing a deal to sell the properties occupied by its largest operator, which filed for bankruptcy earlier this week.
The Irvine, CA, company announced Thursday that its selling 36 skilled nursing facilities currently operated by Senior Care Centers. Sabra plans to sell those SNFs, plus two senior housing communities, for $385 million in cash, with an expected closing date in February.
Rick Matros, chairman and CEO, said Sabra is “pleased” with the outcome, with the purchase price slightly higher than the original estimate of $377.5. He added that “we do not expect” Senior Care’s Tuesday bankruptcy filing to affect the sale.
“We determined it was in our best interest to forego a potential earn-out opportunity that may or may not be realized at some future date and instead receive more cash up front,” he said.
Matros first hinted at Senior Care Centers’ troubles in November, after the Dallas-based company defaulted on its leases and started operating on a month-to-month basis. He said at the time that the REIT was shopping those buildings and anxious to exit the skilled care market in Texas.
LTC Properties also announced Tuesday that it had not received December’s rent from Senior Care Centers, which leases 11 SNFs from the California company. LTC said that it has requested a consensual termination of its rental agreements and is “strongly urging” its tenant to reject those leases in the bankruptcy process.
Senior Care Centers is Texas’ largest nursing home operator, with more than 100 facilities there and in Louisiana, serving nearly 10,000 individuals. Bankruptcy documents show that SCC is saddled with more than $100 million in debt, including $31 million in unpaid rent and other charges to Sabra.
The Texas Health Care Association told the Dallas Morning News the loss of SCC is a serious blow for the Lone Star State.
“If the largest nursing home operator in the state filing for bankruptcy doesn’t yell, ‘We have a big problem in terms of Medicaid funding here,’ I don’t know what does,” Kevin Warren, president and CEO, said.
