In a notable development, Ventas Inc. VTR disclosed agreements with Kindred Healthcare, Inc. KND to enhance the quality and productivity of the long-term acute care hospital (“LTAC”) portfolio operated by Kindred.The move comes in the wake of the new LTAC patient criteria rules that transform the way providers are paid for patient care, which in turn would depend on whether patients meet specific clinical criteria.Specifically, Ventas and Kindred have made certain lease amendments to current master leases. Under these amendments, the annual rent of seven specific LTACs would be re-allocated right away to other more productive post-acute properties leased by Ventas to Kindred. This annual rent on seven LTACs presently amounts to around $8 million. And Ventas has agreed to dispose these, with expectations of receipt of $6.5 million from the sale deals.Notably, Kindred is making efforts to optimize the LTAC portfolio as part of its LTAC criteria mitigation strategy. The company is getting rid of a total of 12 long-term acute-care hospitals for $27.5 million.Therefore, Ventas expects these deals to better position itself under the new LTAC patient criteria that Kindred would implement on Sep 1, 2016. The remaining 31 LTACs leased by Ventas to Kindred have the capability to do well under the new patient certification criteria norms.Nevertheless, going forward, we believe that Ventas’ adequate size and scale will help it to benefit from increasing healthcare spending, an aging population and a rise in insured individuals. Yet, stiff competition and an anticipated rise in interest rate keep us concerned.Ventas currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the REIT space include PS Business Parks Inc. PSB and Public Storage PSA. Both these stocks hold a Zacks Rank #2 (Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KINDRED HLTHCR (KND): Free Stock Analysis Report VENTAS INC (VTR): Free Stock Analysis Report PUBLIC STORAGE (PSA): Free Stock Analysis Report PS BUSINESS PKS (PSB): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research