Wired News – Brookdale Senior Living Signs Mutually-Beneficial Agreements with Ventas

LONDON, UK / ACCESSWIRE / May 01, 2018 / Active-Investors.com has just released a free research report on Brookdale Senior Living Inc. (NYSE: BKD) ("Brookdale"). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=BKD as the Company's latest news hit the wire. On April 27, 2018, the Company, which is the leading operator of senior living communities throughout the United States, declared that it has signed definite agreements to restructure its portfolio of 128 communities (or 10,567 units) leased from real estate investment trust Ventas Inc. These new agreements combine majority of the Ventas leased communities into a single master lease and Security Agreement. Register today and get access to over 1,000 Free Research Reports by joining our site below:

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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Brookdale Senior Living and Ventas (NYSE:VTR) most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:

www.active-investors.com/registration-sg/?symbol=BKD

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Important Details about the Master Lease Agreement

• This master lease would streamline Brookdale's portfolio with Ventas by providing a uniform initial term till December 31, 2025. It also offers two 10-year extension options to the Company.

• The master lease includes a uniform annual rent escalator, which is equivalent to the lesser of 2.25% or four times CPI, starting from January 01, 2019.

• The lease also entitles Brookdale to receive rent credits over the entire term of the lease, including $13 million through 2019.

• Brookdale also has the right to terminate its leasehold interests and eliminate from the master lease several communities with annual base rent up to $30 million upon sale by Ventas. This ensures the Company additional flexibility to streamline and optimize its portfolio.

• Moreover, the master lease also contains some provisions to align the interests of Ventas and Brookdale to jointly fund capital investments in the portfolio to further boost the competitiveness and performance of the leased communities.

• It must be noted that the master lease defines a streamlined, objective change of control standard. It allows Brookdale to engage in certain change of control and other transactions without the need to obtain Ventas' consent. However, this option is subject to the satisfaction of certain conditions.

• Also, as a result of this restructuring, landlords in the Company's leased asset portfolio would not be able to exercise a lease extension option.

Total Rent of $175 million for 2018

Brookdale has guaranteed the master lease at parent level. As per the lease, the total rent in 2018 would be approximately $175 million, including the pro-rata portion of an $8 million rent credit for 2018. The Company estimates a total rent of $177 million for 2019, including an $8 million rent credit for 2019. Brookdale expects to get an annual rent credit of $7 million in 2020 and $5 million thereafter.

However, it must be noted that the master lease does not cover any individual community or portfolio-based financial covenants, such as lease coverage tests. And as a part of this restructuring, the parties have agreed to waive and release any claims related to the Company's previously disclosed disagreement about the calculation of a financial covenant.

Strategic Advantages for Brookdale

Lucinda Baier, Brookdale's President and CEO expressed her excitement about the agreement with Ventas. She believes that the agreement would add certainty in Brookdale's long-term relationship with Ventas. This, in turn, would take the Company a step closer towards improving its financial position. The agreement offers Brookdale an opportunity to enhance its near-term cash flows, streamline its vast portfolio, improve its strategic flexibility, simplify its lease structure, and take advantage of the silver wave of a growing seniors' population. Lucinda also extended a word of thanks to the Ventas team for working collaboratively with Brookdale to create a win-win transaction for both companies.

Stock Performance Snapshot

April 30, 2018 - At Monday's closing bell, Brookdale Senior Living's stock fell 2.43%, ending the trading session at $7.24.

Volume traded for the day: 3.50 million shares.

Stock performance in the last month – up 7.90%

After yesterday's close, Brookdale Senior Living's market cap was at $1.35 billion.

The stock is part of the Healthcare sector, categorized under the Long-Term Care Facilities industry.

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