NEW YORK (TheStreet) -- HCP (HCP - Get Report) shares are rallying by 5.46% to $36.44 in early morning trading Monday, on the announcement that the health-care focused real estate investment trust will spin off its skilled nursing and assisted living assets into a separate, publicly-traded REIT. 

By spinning off its HCR ManorCare portfolio, the company will be able to enhance the quality of its portfolio and focus more on its core growth businesses: senior housing, life science and medical office. 

When the spin off is completed, HCP's portfolio is anticipated to consist of more than 860 properties, generating an annual portfolio income of around $1.4 billion. 

"We believe this transaction gives HCP the ability to re-confirm itself as a blue-chip, innovative and relationship-oriented healthcare REIT," CEO Lauralee Martin said. 

Meanwhile, the new REIT will own over 320 properties, earning an annual rent of around $485 million. 

Along with this announcement, HCP also released its 2016 first quarter results. Earnings of 69 cents a share matched Wall Street's expectations and revenue of $640.8 million topped projections of $631.14 million.