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Sabra Health Care REIT to terminate Holiday master lease

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Sabra Health Care REIT to terminate Holiday master lease

Sabra Health Care REIT Inc. has entered into a nonbinding letter of intent to terminate its triple net master lease with affiliates of Holiday Retirement, covering all 21 communities subject to the agreement.

The healthcare real estate investment trust also signed management agreements under which Holiday will manage the communities.

Sabra will, in exchange, receive a total of $57.2 million, comprising $15.1 million of retained security deposits and a $42.1 million termination fee that the REIT may opt to receive in cash or in additional communities owned by Holiday or its affiliates.

The master lease termination and entry into the management agreements are slated for the first quarter of 2019.

Sabra also closed on the sale of four facilities leased to Genesis Healthcare Inc. for $38.6 million on Dec. 12, and expects to close on the sale of nine more within the week for proceeds of $37.1 million. This will leave three Genesis-leased facilities to be sold.

The sales will reduce annual cash rents from Genesis by $6.7 million. The company expects to sell the remaining three facilities for $33.2 million, subject to approval by HUD, expected in the first quarter of 2019.

The company plans to retain eight Genesis-leased facilities, which generate annual cash rents of $10.4 million.