Ventas To Shutter Eclipse Senior Living Communities: What You Need To Know

The real estate investment trust Ventas, Inc. VTR announced the shuttering of its Eclipse Senior Living (ESL) operations, with its communities to have their operations transitioned of eight new management firms.

What Happened: The ESL was established in 2017 and has 90 communities across 20 states. Ventas said the communities “have been adversely affected by the COVID-19 pandemic” and their operations will be inherited by new managers “under incentivized management contracts.”

“ESL and its key principals have agreed to facilitate an orderly transition to the new managers,” said Ventas in a press statement. “ESL is expected to cease operation of its management business in 2022 following transition of the communities. Most of the transitions are expected to be completed by the end of 2021, subject to final documentation, regulatory approvals and other customary conditions.”

Ventas owns a 34% stake in ESL.

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What Else Happened: The trade journal Senior Housing News reported that the closure of the ESL operations will impact 171 corporate employees, with the winding down to be finished by the first quarter of 2022.

Ventas stated its decision came because the ESL communities did not contribute to either its net operating income or its Senior Housing Operating Portfolio NOI in the second quarter of this year. The REIT added that it expected to incur “certain one-time transition costs and expenses in connection with the transitions.”

VTR Price Action: The stock is down 3.5% to $54.28 at publication time.

Photo: Eclipse Senior Living.