The main landlord for the Kindred nursing home chain delivered a jolt Tuesday, announcing it was seeking a rent increase three times the amount previously mentioned last fall. Ventas delivered notice to Kindred that it was proposing a $111 million rent increase for the 225 facilities it leases to Kindred. The annual rent escalator would drop from 3.5% to 3%.

The healthcare real estate investment trust (REIT) said it wants to increase the aggregate annual base rent from $206 million to $317 million, based on fair market appraisals that other providers would pay to operate the facilities. Ventas CEO Debra Cafaro told a conference call Tuesday that her REIT was simply exercising a one-time “reset right” agreed upon by the two companies when Ventas helped bail out Kindred from bankruptcy proceedings five years ago — which included $50 million annual rent relief, which is ongoing.

Last fall, Ventas had mentioned that the proposed rent increase could be more than $35 million. Cafaro told analysts Tuesday that she was confident Kindred could afford the much larger rent increase and still remain a viable, profitable entity. Federal reimbursement revisions over the past year, and other market conditions, have not been as harsh as expected, she said, allowing Kindred and other providers to fare better than forecast. She also said that Kindred’s skilled-nursing margins were lagging and that, without getting more specific, certain operations improvements could help the bottom line.

Kindred issued a statement noting its “significant disagreement” with Ventas’ proposal. The average ages of the 39 hospitals and 186 nursing centers Kindred rents from Ventas are 38 years and 36 years, respectively, the Kindred statement pointed out. Kindred CEO Paul Diaz also noted that his company’s long-term care hospitals are facing an approximate 12.9% cut in Medicare reimbursements, an issue Cafaro said was mitigated by smaller than expected cuts.

Diaz expressed hope that a compromise could be reached over the next 30 days. Barring that, the companies’ five-year-old agreement would call for each to present an appraiser by July 8. They would have 10 days to agree on a third-party appraiser who would then have to make a binding final ruling within 60 days on the rent reset and annual escalator levels.