Ventas (NYSE: VTR) plans to sell a total of $150 million in nursing home assets, and is close to selling a portion of the Pennsylvania facilities in a market that has proven to be challenging due to its state staffing mandate.

The Chicago-based real estate investment trust (REIT) is in the midst of efforts to raise capital and pay down debt, and the sale of the skilled nursing facilities (SNFs) assets is related to Ventas’ Santerre Health Investors portfolio, some of which sold last year.

Ventas’ executives said during a presentation at the Bank of America’s Global Real Estate Conference last week that the REIT is on schedule for cash flow generation. The company remains poised to maximize its net operating income (NOI) and the “strategic disposal” of the SNF assets, they said.

So far, 24 SNF assets have been sold or are under contract for sale with 3,719 SNF beds for a price of $94,000 per bed, and around 10% cash cap rate. This has led to a total of $350 million in gross proceeds with $200 million closed, and $150 million that are pending.

Ventas is working on “de-risking” its SNF exposure inherited from the Santerre loan due to a challenging Pennsylvania market, BMO’s investment analyst, Juan Sanbaria, said in an investment note. The implied cap rate for the assets is approximately 15% and they are targeted to close in 2025, he said.

The company has been negatively impacted by its Pennsylvania SNF holdings, he noted.

“[Pennsylvania] has struggled due to issues with its state level minimum staffing,” Sanabria said. “Positively, as per its recent update, [Ventas] appears to be nearing a sale of a portion of its [Pennsylvania] SNF portfolio.”

Future investments

As for future investments, executives said that Ventas expects to close $750 million of about $1 billion slated investments in senior housing by year end.

“We have a line of sight to a billion [dollars] of investments. Our pipeline is larger than that and growing, and that’s been continuing since the beginning of the year, but our expectation is that we have a billion [dollars] of transactions that we expect to close,” Chairman and CEO Debra Cafaro said during the call.

In terms of the type of assets and financial returns Ventas is expecting to close on, Bob Probst, executive vice president and CFO, said these were consistent with the volume that had already been closed, which is $350 million, on top of the $400 additional million already announced.

“And now another $250 million is coming. They all line up,” Probst said. “They’re kind of typical sellers, and the timing is right for them. The time is right for us.”

Last summer, Ventas announced plans to shed $63 million of the Santerre assets.