Mon Sep 16 15:12:15 UTC 2024: ## Ventas Extends Lease with Kindred Healthcare, Acquiring Five LTAC Assets

**CHICAGO–(BUSINESS WIRE)–** Ventas, Inc. (NYSE: VTR) announced today that it has entered into agreements with Kindred Healthcare, LLC (Kindred) and its parent company, ScionHealth, regarding 23 long-term acute care hospitals (LTACs) under the existing Master Lease between Ventas and Kindred.

The agreements, collectively known as the 2024 Kindred Agreements, aim to enhance patient care, strengthen the Master Lease, and provide benefits for both Ventas and Kindred.

**Key highlights of the agreements include:**

* **Extended Lease Term:** The lease term for the 23 LTACs has been extended to April 30, 2030.
* **Annualized Rent:** The initial annualized cash contractual base rent for the LTACs will be $80 million starting May 1, 2025, with an annual escalation of 2.75%.
* **Revenue-Sharing:** Ventas has the right to receive additional revenue-sharing rent if revenue at these assets surpasses certain thresholds.
* **Warrants:** ScionHealth has granted Ventas warrants for 9.9% of its common equity, exercisable at the pre-transaction value.
* **Asset Acquisition:** Ventas has acquired five performing LTAC assets for a gross purchase price of $189 million. These assets will continue to be operated by Kindred and have been added to the existing Master Lease for an initial 10-year term.
* **Rent for Acquired Assets:** Annual cash rent of $16 million commenced immediately for the acquired assets, with an annual escalation of 2.75%.

The transactions are expected to strengthen the EBITDARM to rent coverage under the Master Lease to at least 1.3x. Kindred’s obligations under the Master Lease will continue to be guaranteed by ScionHealth.

Ventas expects the per share aggregate non-cash impact to its 2024 Normalized FFO relating to the LTAC lease extension to be in line with its previously provided 2024 guidance. The annualized Normalized FFO impact of the investment in performing LTACs, funded wholly with equity, is expected to be approximately $0.01 per share.

These agreements represent a significant step for both Ventas and Kindred, aiming to enhance patient care, strengthen financial positions, and secure long-term stability for the LTAC facilities.

Read More