CHICAGO--(BUSINESS WIRE)--Dec. 29, 2014--
Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) said today that it
and Kindred Healthcare, Inc. (NYSE: KND) (“Kindred”) have entered into
an agreement to transition the operations of nine post-acute facilities.
Ventas and Kindred have also reached other agreements, including making
modifications to the master leases regarding 34 post-acute facilities
that will remain subject to the various master leases between the
companies and reimbursing Ventas for certain deferred capital
expenditures at healthcare facilities previously transferred to new
operators. Kindred has agreed to pay Ventas a total of $40 million in
connection with these agreements.
“We are very pleased to reach yet another agreement that will create
value for Ventas and Kindred shareholders, further enhancing the strong
relationship between the two companies and improving their portfolios
and expected results,” Ventas Chairman and Chief Executive Officer Debra
A. Cafaro said.
Ventas will continue to receive full rent from Kindred, including an
escalation on May 1, 2015, until the nine facilities are transitioned to
a new operator or sold by Ventas. Ventas expects to successfully sell or
re-tenant these facilities prior to the end of 2015, although there can
be no assurance that the Company will be able to do so. In certain
cases, Kindred’s obligation to pay rent on non-transitioned facilities
will be reduced to 50 percent of then current base rent after January 1,
2016. Current annual base rent on the nine facilities approximates $10
million, and, prior to this agreement, the expiration date of the leases
governing those nine assets was April 30, 2018 for eight facilities and
April 30, 2020 for the ninth facility.
Ventas expects the net impact of its agreements with Kindred and the
re-leasing or sale of the nine assets to be slightly accretive to its
2015 normalized funds from operations per share.
Ventas, Inc., an S&P 500 company, is a leading real estate investment
trust. Its diverse portfolio of more than 1,500 assets in the United
States, Canada and the United Kingdom consists of seniors housing
communities, medical office buildings, skilled nursing facilities,
hospitals and other properties. Through its Lillibridge subsidiary,
Ventas provides management, leasing, marketing, facility development and
advisory services to highly rated hospitals and health systems
throughout the United States. More information about Ventas and
Lillibridge can be found at www.ventasreit.com
and www.lillibridge.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’,
borrowers’ or managers’ expected future financial condition, results of
operations, cash flows, funds from operations, dividends and dividend
plans, financing opportunities and plans, capital markets transactions,
business strategy, budgets, projected costs, operating metrics, capital
expenditures, competitive positions, acquisitions, investment
opportunities, dispositions, merger integration, growth opportunities,
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. These forward-looking statements are inherently
uncertain, and actual results may differ from the Company’s expectations.
The Company does not undertake a duty to update these 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
from expectations 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 tenants, operators, borrowers, managers and other third
parties to satisfy 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 tenants, operators, 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 and investments,
including the Company’s pending acquisition of American Realty Capital
Healthcare Trust, Inc. and investments in different asset types and
outside the United States; (d) macroeconomic conditions such as a
disruption of or lack of access to the capital markets, changes in the
debt rating on U.S. government securities, default or delay in payment
by the United States of its obligations, and changes in the federal or
state budgets resulting in the reduction or nonpayment of Medicare or
Medicaid reimbursement rates; (e) the nature and extent of future
competition, including new construction in the markets in which the
Company’s seniors housing communities and medical office buildings
(“MOBs”) are located; (f) the extent of future or pending healthcare
reform and regulation, including cost containment measures and changes
in reimbursement policies, procedures and rates; (g) increases in the
Company’s borrowing costs as a result of changes in interest rates and
other factors; (h) the ability of the Company’s operators and managers,
as applicable, to comply with laws, rules and regulations in the
operation of the Company’s properties, to deliver high-quality services,
to attract and retain qualified personnel and to attract residents and
patients; (i) changes in general economic conditions 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,
earnings and funding sources; (j) the Company’s ability to pay down,
refinance, restructure or extend its indebtedness as it becomes due; (k)
the Company’s ability and willingness to maintain its qualification as a
REIT in light of economic, market, legal, tax and other considerations;
(l) final determination of the Company’s taxable net income for the year
ending December 31, 2014; (m) the ability and willingness of the
Company’s tenants to renew their leases with the Company upon expiration
of the leases, the Company’s ability to reposition its properties on the
same or better terms in the event of nonrenewal or in the event the
Company exercises its right to replace an existing tenant or manager,
and obligations, including indemnification obligations, the Company may
incur in connection with the replacement of an existing tenant or
manager; (n) risks associated with the Company’s senior living operating
portfolio, such as factors that can cause volatility in the Company’s
operating income and earnings generated by those properties, including
without limitation national and regional economic conditions, costs of
food, 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) changes in exchange rates for any foreign currency in
which the Company may, from time to time, conduct business; (p)
year-over-year changes in the Consumer Price Index or the UK Retail
Price Index and the effect of those changes on the rent escalators
contained in the Company’s leases and the Company’s earnings; (q) the
Company’s ability and the ability of its tenants, operators, borrowers
and managers to obtain and maintain adequate property, liability and
other insurance from reputable, financially stable providers; (r) the
impact of increased operating costs and uninsured professional liability
claims on the Company’s liquidity, financial condition and results of
operations or that of the Company’s tenants, operators, borrowers and
managers, and the ability of the Company and the Company’s tenants,
operators, borrowers and managers to accurately estimate the magnitude
of those claims; (s) risks associated with the Company’s MOB portfolio
and operations, including the Company’s ability to successfully design,
develop and manage MOBs, to accurately estimate its costs in fixed
fee-for-service projects and to retain key personnel; (t) the ability of
the hospitals on or near whose campuses the Company’s MOBs are located
and their affiliated health systems to remain competitive and
financially viable and to attract physicians and physician groups; (u)
the Company’s ability to build, maintain and expand its relationships
with existing and prospective hospital and health system clients; (v)
risks associated with the Company’s investments in joint ventures and
unconsolidated entities, including its lack of sole decision-making
authority and its reliance on its joint venture partners’ financial
condition; (w) the impact of market or issuer events on the liquidity or
value of the Company’s investments in marketable securities; (x) merger
and acquisition activity in the seniors housing and healthcare
industries resulting in a change of control of, or a competitor’s
investment in, one or more of the Company’s tenants, operators,
borrowers or managers or significant changes in the senior management of
the Company’s tenants, operators, borrowers or managers; (y) the impact
of litigation or any financial, accounting, legal or regulatory issues
that may affect the Company or its tenants, operators, borrowers or
managers; (z) changes in accounting principles, or their application or
interpretation, and the Company’s ability to make estimates and the
assumptions underlying the estimates, which could have an effect on the
Company’s earnings; and (aa) the impact of expenses related to the
re-audit and re-review of the Company’s historical financial statements
and related matters. Many of these factors are beyond the control of the
Company and its management.
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Source: Ventas, Inc.
Ventas, Inc.
Lori B. Wittman, (877) 4-VENTAS