Ventas, Inc. announced that Brookdale Senior Living did not exercise its right to extend the term of the Master Lease between the two companies, which was set to commence on January 1, 2026. This decision impacts 120 senior housing communities currently covered by the Master Lease, with Brookdale's obligation to pay full contractual rent continuing through December 31, 2025. The annual cash rent under this Master Lease for 2025 is $113.6 million.
Brookdale Senior Living confirmed its decision, stating that non-renewal is expected to be more positive for its cash flow starting in 2026, given the historical and expected future cash flow performance of the portfolio. Brookdale noted that the Ventas leased portfolio had historically generated significant negative cash flows, including approximately $23 million of negative cash flow for the trailing twelve months ended September 30, 2024.
Ventas intends to deploy its Ventas Operational Insights (OI) platform and proven strategies to convert some or all of these attractive senior housing communities to its Senior Housing Operating Portfolio (SHOP) structure. The company plans to engage market-focused operators to manage these communities, aiming to maximize performance and value and further expand its SHOP footprint. Ventas may also consider selling or re-leasing a portion of the portfolio.
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