Sabra Health Care REIT Inc. is marketing 46 properties leased to Genesis Healthcare Inc. for sale, and 35 of the properties are under contract, with expected total proceeds of $296.9 million.
The company said in a news release that it plans to retain eight of its 54 properties leased to Genesis. The properties' annual cash rents would be low enough to keep Sabra's exposure to Genesis below 2% of its pro forma annualized cash net operating income, before any residual rents.
Genesis warned in November 2017 that it could file for bankruptcy if its restructuring plans did not succeed.
The sales of the 35 properties under contract are expected to be completed by the third quarter. The transaction would eliminate annual cash rents of $25.6 million, and would trigger residual rents, to be paid to Sabra, of $5.2 million per year for the following 4.28 years, as provided by Sabra's agreement with Genesis.
The remaining 11 Genesis properties that Sabra is marketing are expected to be sold in 2018, generating proceeds of roughly $70.7 million.
In detailing its fourth-quarter 2017 earnings, the company said it exercised its options to acquire a 140-bed skilled nursing/transitional care facility in Texas for $12.8 million, inclusive of $2.0 million used to repay a portion of Sabra's related loan receivable investment, and a 95-unit seniors housing community in Colorado for $20.7 million, inclusive of $4.9 million used to repay Sabra's preferred equity investment in the property.
The company also acquired, for $42.8 million, the remaining two skilled nursing/transitional care facilities that were part of a North American healthcare portfolio transaction.