$127.1 Million of Annual Base Rent Renewed By Kindred Ventas to Sell Six Underperforming Skilled Nursing Facilities to KindredCHICAGO, Apr 30, 2009 (BUSINESS WIRE) -- Ventas, Inc. (NYSE:VTR) ("Ventas" or the "Company") said today that its
tenant Kindred Healthcare, Inc. (NYSE:KND) ("Kindred") has extended,
through April 30, 2015, the term of the Master Leases covering 109
skilled nursing and long-term acute care hospital assets, whose base
term would have expired on April 30, 2010. The base rent for these
assets will be $127.1 million during the May 1, 2009-April 30, 2010
lease year, consistent with existing contractual terms. Kindred retains
two additional sequential renewal options for these assets.
Ventas also said that it has agreed to sell six underperforming skilled
nursing facilities to Kindred for total cash consideration of $58
million, consisting of a $55.7 million purchase price and a $2.3 million
lease termination fee. The total consideration equates to approximately
$74,600 per bed. Current annual rent on the six facilities is
approximately $5.6 million.
"These agreements create significant value for Ventas and Kindred
shareholders and continue the collaborative relationship between our two
companies," Ventas Chairman, President and Chief Executive Officer Debra
A. Cafaro said. "The lease extensions provide certainty to Ventas
shareholders and demonstrate the quality of our portfolio. The asset
sales will result in a significant gain and further strengthen our
balance sheet and liquidity position."
The skilled nursing facilities to be sold to Kindred contain 777 beds
and are located in four states. One of the skilled nursing facilities
included in the sale is among the 109 assets renewed by Kindred to 2015.
The current lease expiration date for the remaining five assets is April
30, 2013.
Ventas expects to record a gain from the sale of more than $35 million
in 2009. The gain will be excluded from Funds From Operations ("FFO") in
accordance with the NAREIT definition of FFO. The sale transaction is
expected to be completed by mid-year 2009. There can be no assurance
that the sale of assets will close or, if it does, the timing of such
closing.
Ventas, Inc., an S&P 500 company, is a leading healthcare real estate
investment trust. Its diverse portfolio of properties located in 43
states and two Canadian provinces includes seniors housing communities,
skilled nursing facilities, hospitals, medical office buildings and
other properties. More information about Ventas can be found on its
website at www.ventasreit.com.
This press release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements regarding the Company's or its tenants', operators',
managers' or borrowers' expected future financial position, results of
operations, cash flows, funds from operations, dividends and dividend
plans, financing plans, business strategy, budgets, projected costs,
capital expenditures, competitive positions, acquisitions, investment
opportunities, merger integration, growth opportunities, dispositions,
expected lease income, continued qualification as a real estate
investment trust ("REIT"), plans and objectives of management for future
operations and statements that include words such as "anticipate," "if,"
"believe," "plan," "estimate," "expect," "intend," "may," "could,"
"should," "will" and other similar expressions are forward-looking
statements. Such forward-looking statements are inherently uncertain,
and security holders must recognize that actual results may differ from
the Company's expectations. The Company does not undertake a duty to
update such forward-looking statements, which speak only as of the date
on which they are made.
The Company's actual future results and trends may differ materially
depending on a variety of factors discussed in the Company's filings
with the Securities and Exchange Commission. These factors include
without limitation: (a) the ability and willingness of the Company's
operators, tenants, borrowers, managers and other third parties to meet
and/or perform their obligations under their respective contractual
arrangements with the Company, including, in some cases, their
obligations to indemnify, defend and hold harmless the Company from and
against various claims, litigation and liabilities; (b) the ability of
the Company's operators, tenants, borrowers and managers to maintain the
financial strength and liquidity necessary to satisfy their respective
obligations and liabilities to third parties, including without
limitation obligations under their existing credit facilities and other
indebtedness; (c) the Company's success in implementing its business
strategy and the Company's ability to identify, underwrite, finance,
consummate and integrate diversifying acquisitions or investments,
including those in different asset types and outside the United States;
(d) the nature and extent of future competition; (e) the extent of
future or pending healthcare reform and regulation, including cost
containment measures and changes in reimbursement policies, procedures
and rates; (f) increases in the Company's cost of borrowing as a result
of changes in interest rates and other factors; (g) the ability of the
Company's operators and managers, as applicable, to deliver high quality
services, to attract and retain qualified personnel and to attract
residents and patients; (h) the results of litigation affecting the
Company; (i) changes in general economic conditions and/or economic
conditions in the markets in which the Company may, from time to time,
compete, and the effect of those changes on the Company's revenues and
its ability to access the capital markets or other sources of funds; (j)
the Company's ability to pay down, refinance, restructure and/or extend
its indebtedness as it becomes due; (k) the Company's ability and
willingness to maintain its qualification as a REIT due to economic,
market, legal, tax or other considerations; (l) final determination of
the Company's taxable net income for the year ended December 31, 2008
and for the year ending December 31, 2009; (m) the ability and
willingness of the Company's tenants to renew their leases with the
Company upon expiration of the leases and the Company's ability to
reposition its properties on the same or better terms in the event such
leases expire and are not renewed by the Company's tenants or in the
event the Company exercises its right to replace an existing tenant upon
default; (n) risks associated with the Company's senior living operating
portfolio, such as factors causing volatility in the Company's operating
income and earnings generated by its properties, including without
limitation national and regional economic conditions, costs of
materials, energy, labor and services, employee benefit costs, insurance
costs and professional and general liability claims, and the timely
delivery of accurate property-level financial results for those
properties; (o) the movement of U.S. and Canadian exchange rates; (p)
year-over-year changes in the Consumer Price Index and the effect of
those changes on the rent escalators, including the rent escalator for
Master Lease 2 with Kindred, and the Company's earnings; (q) the
Company's ability and the ability of its operators, tenants, borrowers
and managers to obtain and maintain adequate liability and other
insurance from reputable and financially stable providers; (r) the
impact of increased operating costs and uninsured professional liability
claims on the liquidity, financial condition and results of operations
of the Company's operators, tenants, borrowers and managers and the
ability of the Company's operators, tenants, borrowers and managers to
accurately estimate the magnitude of those claims; (s) the ability and
willingness of the lenders under the Company's unsecured revolving
credit facilities to fund, in whole or in part, borrowing requests made
by the Company from time to time; (t) the impact of market or issuer
events on the liquidity or value of the Company's investments in
marketable securities; and (u) the impact of any financial, accounting,
legal or regulatory issues that may affect the Company's major tenants,
operators or managers. Many of these factors are beyond the
control of the Company and its management.
SOURCE: Ventas, Inc.
Ventas, Inc.
David J. Smith
(877) 4-VENTAS