What is the “Reset Right” in Ventass leases with Kindred?
The Reset Right in the Kindred Master Leases has enabled Ventas to capture “upside” in the operating business of its tenant by allowing Ventas to increase Kindred’s rents to market levels in 2006. On May 9, 2006 Ventas initiated the process whereby the one-time one-way option can be exercised by Ventas to adjust the current rents to “market” rent levels effective July 19, 2006 if the current “market” rent levels in 2006 exceed contractual rents. On October 6, 2006 the final appraisers determined an annualized rent increase of $33.1 million over the current annual base rent level under the four Master Leases (“Master Leases”) between the companies. The final appraisers have also specified that the market annual rent escalator is 2.7 percent under Master Leases 1, 3 and 4, and is based on the Consumer Price Index (CPI), with a floor of 2.25 percent and a ceiling of 4 percent, under Master Lease 2. On October 12, 2006 Ventas exercised its election to increase the annualized rent of $33.1
