Sabra Health Care is cutting ties with its largest operator and selling 36 skilled nursing facilities.

Chairman and CEO Rick Matros noted Tuesday many benefits for divesting its Senior Care Centers properties — among them, dropping Sabra’s exposure to skilled care in Texas, which has weak Medicaid reimbursement and excess skilled beds.

“The continued instability of management and inability to execute really validated the concerns we had earlier this year that we needed to do something about the Senior Care portfolio,” Matros told investors Tuesday.

Sabra entered into a non-binding letter of intent to sell the 36 SNFs, along with two senior housing communities, at the end of August, it announced Monday. They stand to earn an aggregate sale price of $405  million for the properties, now leased to Senior Care Centers. Closing of the sale, officials said, is subject to due diligence period, with a target closing date of early 2019. Sabra said it has also lined up a potential Plan B buyer in the event that the sale falls through.

During the third quarter, Senior Care defaulted on its leases and has since been operating on a month-to-month basis. Sabra said that it is operating under the assumption that it is unlikely that it will receive rent pay from the leases to close out 2018, which would have totaled $58.5 million for this year.

Without those revenues, Sabra’s numbers have been tugged down a little, but Matros said he expect the company to stay on course for the remainder of this year.

“This is something that we would have preferred to avoid and we expended a lot of effort to give Senior Care Centers and the board as many opportunities as possible to get to a different place,” he said. “Despite best efforts, they weren’t able to do that, but this is a short-term issue. I’m not happy about it, but it doesn’t change anything we’ve said in terms of what we plan to do and where we’re going to be going into 2019.”

Overall, the company tallied net income of $35.2 million, on revenues of $151.8 million during the quarter that ended Sept. 30.

Meanwhile, officials with another California REIT, LTC Properties, said Tuesday they are keeping an eye on its facilities occupied by Senior Care, in light of this week’s announcement by Sabra.