A California-based skilled nursing landlord said it suspected that Texas’ largest operator would not be able to come out of bankruptcy and was therefore actively looking for another tenant.
Officials with LTC Properties revealed their strategy during a March 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, saddled with more than $100 million in debt.
He said LTC Properties is working with a backup Texas tenant that was familiar with the properties to take over its 11 facilities now occupied by the troubled operator, in the event that things fall apart.
“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.
A Senior Care Centers spokesman declined comment when reached by
McKnight’s.
LTC Properties said in December that it had not received rent from SCC, and because of that, 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.
LTC Properties said it does not believe it 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 of last year, up from $19.8 million in the same period the previous year.
From the April 1, 2019 Issue of McKnight's Long-Term Care News
