DALLAS — Capital Senior Living Corp. (NYSE:CSU), one of the nation’s largest operators of senior living communities, has reached agreements with Ventas Inc. and Welltower Inc. for immediate rent reductions and the early terminations of its master leases. This announcement follows the previously announced early termination of its Healthpeak master lease.
Together, the early terminations and rent reductions are expected to improve the company’s cash flow by approximately $22 million and reduce lease liabilities by approximately $253 million.
“We remain laser focused on our operational turnaround plan,” says Kim Lody, the Dallas-based company’s CEO. “These agreements further progress our strategy to reduce our lease liabilities and increase the percentage of our portfolio that is company owned.”
With Ventas, the company has agreed to end its master lease covering seven communities. CSU will reduce its payments from $1.3 million per month to $1 million per month.
With Welltower, CSU has three master leases covering 24 communities in seven states. Occupancy across that portfolio was 78 percent, and average property age was 15 years. CSU will pay $2.2 million to Welltower each month, as opposed to $2.8 million under the master leases.
In both the Welltower and Ventas arrangements, CSU expects the leases to be released by the end of the year. Any communities that have not been transitioned to a new operator will revert to management contracts.