HCR ManorCare pays landlord half of its rent

June 07--HCR ManorCare, a Toledo nursing home operator, paid its primary landlord less than half of what it owed in rent for June under a forbearance agreement that was meant to ease the burden on the cash-strapped long-term care facility operator, according to filings with the U.S. Securities and Exchange Commission.

Quality Care Properties Inc., a publicly traded real estate investment trust, said it received a payment of $15 million on Friday from HCR Manorcare -- $8 million in rent and $7 million to repay a secured loan issued in April. The forbearance agreement had called for its tenant in many of its buildings, HCR Manorcare, to pay $32 million in rent by June 1.

In the filing, Quality Care said HCR Manorcare indicated the amount of rent paid was "appropriate" at this time based on its other lenders demanding quicker payment, its desire to preserve liquidity, increasing professional fees, and an expectation of reduced cash flow.

Quality Care said the projections it received from HCR Manorcare indicate further performance declines are likely. HCR Manorcare has lost $3.7 million in the past three years, filings show.

Quality Care continues to be in discussions with HCR ManorCare about "its lease default and a potential out-of-court restructuring that aims to provide stability to the thousands of employees of HCR ManorCare and the people in their vital care," Quality Care Properties said in its filing.

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