Diversicare Healthcare Services (Nasdaq: DVCR) on Monday announced a new lease deal with landlord Omega Healthcare Investors (NYSE: OHI), which will see 34 skilled nursing facilities consolidated under a single agreement.
The Brentwood, Tenn.-based skilled nursing provider previously had 23 facilities — scattered across Texas, Kentucky, Alabama, Florida, Ohio, and Tennessee — under one lease with the real estate investment trust (REIT), and an additional 11 in the Midwest covered by a separate lease arrangement. Starting October 1, Diversicare leases all 34 Omega-owned properties on the same terms, which include an annual rent escalators of 2.15% over the initial 12-year lease term. Diversicare also has the option for two 10-year extensions, according to the provider, along with a landlord-supplied capital fund.
“We are excited to announce the continuation of our partnership with Omega and we look forward to an ongoing successful relationship with one another,” Diversicare CEO Jay McKnight said in a statement announcing the agreement.
The company also announced the cessation of operations at a 50-bed assisted living facility in Ontario, Ohio as of October 1; Omega had also owned that property.
Diversicare currently operates 75 skilled nursing and senior living facilities across the U.S., with around 8,400 licensed beds.
Written by Alex Spanko