Ventas, Brookdale Reach Agreement On 120-community Master Lease

CHICAGO — Real estate investment trust Ventas, which has a portfolio that features more than 800 seniors housing properties, has reached a new agreement with Brookdale Senior Living regarding the communities covered by the existing master lease between the two companies. 

Previously set to expire Dec. 31, 2025, the master lease applies to 120 senior living communities. Brookdale previously expressed its intent to allow the lease to expire. 

Now, Brookdale will extend its lease on 65 of the communities for a 10-year term with a 38 percent cash rent increase. Each of the communities averages 62 units. Ventas has agreed to invest $35 million in capital expenditures at the properties over three years, beginning in 2025. 

Ventas also plans to convert an additional 44 communities, comprising the majority of the units included under the master lease, to the company’s Seniors Housing Operating Portfolio (SHOP) platform in 2025, selecting new operators. SHOP marks one of two parts of Ventas’s portfolio, with the other comprising properties operating under the triple-net-lease structure. 

According to Ventas, the communities selected for conversion to the SHOP portfolio share key characteristics including third-quarter net operating income (NOI) of roughly $54 million, an average size of 129 units, favorable market locations, average occupancy of 76 percent, affordability and overlap with markets in which Ventas has existing relationships with operators. Additionally, the selected properties are predominantly combination communities, with independent living, assisted living and memory care. 

The final 11 communities covered by the master lease will be sold in 2025, with Ventas retaining proceeds from the sales. Brookdale will continue to pay full contractual rent on substantially all of the properties through the end of 2025. 

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