Ventas to Take Ownership of 48 SNF and Hospital Assets in Collateral Pool of $486M Santerre Loan

Ventas (NYSE: VTR) on Friday announced that it intends to take ownership of the collateral that supports its approximately $486 million cash-pay mezzanine loan to Santerre Health Investors.

“Ventas expects to take ownership of the Santerre Portfolio through a ‘loan to own’ structure that converts the outstanding principal amount of the Santerre Mezzanine Loan to equity, with no additional consideration being paid,” the Chicago-based real estate investment trust (REIT) noted in a press release.

The loan is secured by equity interests in entities that collectively own a pool of medical office buildings, senior housing operating portfolio communities, triple-net leased skilled nursing facilities and hospital assets in the United States, including 48 skilled nursing facilities and hospital assets, which represent nearly 40% of the NOI of the Santerre portfolio, according to the release.

“While these assets were materially challenged by the COVID-19 pandemic, the Company believes they have potential value upside,” Ventas noted, of the SNF and hospital assets.

The company said it expects to complete the process of taking ownership of the Santerre Portfolio in the second quarter of 2023. The Company’s ownership of the equity in the Santerre Portfolio will be subject to an existing approximately $1 billion non-recourse senior loan, secured by the assets in the portfolio.

The loan matures in June 2023, but Ventas expects to exercise a right to extend that maturity to June 2024, per the release.

“The Company expects to fund the repayment of the Santerre Senior Loan through a variety of capital sources and asset sales on a long-term basis,” the release stated. “The Company remains committed to maintaining its BBB+ rating and preserving a strong balance sheet.”

Santerre Health Investors was formed after Colony Capital rebranded as DigitalBridge Group Inc. (NYSE: DBRG) in 2021 and sold 83 skilled nursing facilities — among other health care assets — to Highgate Capital Investments and Aurora Health Network.

Ventas previously was a major owner of skilled nursing real estate but divested most of its SNF holdings through a series of moves that included spinning out a separate REIT, Care Capital Properties, in 2015. Sabra Health Care REIT (Nasdaq: SBRA) acquired Care Capital Properties in 2017.