HCP Inc. (NYSE: HCP) moved to reduce its exposure to Brookdale Senior Living (NYSE: BKD) and restructure its portfolio in a complex series of transactions, driving up share prices for both companies on Thursday. Brookdale is the nation’s largest private-pay senior living provider and is also a major home health provider.

Irvine, California-based HCP is a major landlord for Brookdale’s senior housing properties. The deals are expected to reduce HCP’s Brookdale concentration from about 27% of cash NOI and interest income to about 15.7%, improve lease coverage, and diversify tenant mix for the real estate investment trust (REIT).

HCP also agreed to waive some of its consent rights, which could give Brookdale more flexibility to pursue a large, entity-level transaction.

The news comes just days after Chinese firm Zhonghong Zhuoye Group Co Ltd reportedly was no longer in talks to buy the Brentwood, Tennessee-based company. Brookdale’s share price has dropped sharply since 2014, when it acquired rival Emeritus Corp. in a blockbuster transaction, and rumors have swirled this year that the company is a takeover target.

Additionally, the companies agreed to terminate management agreements on 36 senior housing operating properties (SHOP) and leases on 32 triple-net communities.

HCP intends to either transition to other operators or sell the 68 SHOP and triple-net properties next year. The REIT is also selling six properties to Brookdale for $275 million and purchasing the operator’s 10% interest in two RIDEA joint ventures for $99 million.

Read the full story at Senior Housing News.

Written by Tim Regan