Sabra Plans to Divest 29 Genesis-Managed Skilled Nursing Facilities

by Jeff Shaw

IRVINE, Calif. — Sabra Health Care REIT (NASDAQ: SBRA) plans to sell off 29 of its 78 skilled nursing facilities currently managed by Genesis Healthcare Inc.

The plan, announced on the Irvine-based company’s second-quarter earnings call, is the latest in a trend of publicly traded REITs reducing their exposure to skilled nursing. Last year Ventas spun off its skilled nursing portfolio into a separate REIT, and in May HCP Inc. announced it planned to do the same.

As part of the deal, as the facilities are sold, Genesis’ rent will be reduced by 7.5 percent of the net proceeds from the sales.

Sabra is currently under contract to sell five other Genesis-managed facilities. If Sabra completes those transactions and is able to sell the entire 29-property portfolio, it will reduce the number of Sabra-owned, Genesis-managed facilities from 78 to 43.

If completed, Sabra estimates the sales will reduce the percentage of its revenue from skilled nursing from 51.1 percent to 24.9 percent, after sales proceeds are reinvested.

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