LTC Properties’ investment strategy of focusing on structured finance products started as a way to just “fill the void” during the pandemic. But now executives are eyeing more growth under the “creative and successful” plan of action based on its recent success.
The California-based real estate investment trust reported that it closed on $103.3 million in investments in the fourth quarter of 2021. For the entire year, the company invested a total of $109.4 million.
“We continue to have an active and healthy pipeline moving into 2022, the value of which is just north of $110 million,” Wendy Simpson, company chairman and CEO, said during the LTC Properties’ fourth quarter earnings call Friday. She added that figure includes a $25 million transaction expected to close by the end of February.
The investments for the quarter include a $27 million mortgage loan secured by a 189-bed skilled nursing facility in Louisiana. The loan term is for three years with one 12-month extension option and bears interest at 7.5%.
Simpson said the company strongly believes that these types of investments, which are shorter in duration, represent cash flow strategic deals with reduced risk profiles.
“Additionally, the shorter durations of these investments can act as an inflation rate hedge, which is important in today’s market,” she said.
The company throughout the pandemic has been able to enhance its internal business development team and built a robust skill set around providing financing that meets operators exactly where they want to be, explained Clint Malin, the company’s co-president and chief investment officer.
“We still believe in more traditional triple-net lease deals, which we continue to identify, but these new investment opportunities provide us with the ability to deploy capital in new and meaningful ways for our shareholders,” Malin said.
LTC Properties’ portfolio consists of 198 properties, including 73 skilled nursing holdings and 120 assisted living properties.
