With fewer distractions and increasing stability, a renewed focus on increasing cash flow and value.
So, management at Brookdale Senior Living has got some religion. It has been on the road trying to sell their story to investors. And it appears that selling the bulk of their owned real estate is off the table, which I agree with. They will continue with selective dispositions, although not as many as I think they should, and they have basically put their landlords on notice that as leases come up for renewal, they want to negotiate the lease rates down for the underperformers, or they will walk. Also good news. In addition, they are under-promising with the expectation that they will over deliver. The problem is, everyone knows that so if they don’t over deliver in the next few years, investors may give up and run for the hills. Somehow, it feels like I have heard this before, especially about being laser-focused on increasing cash flow and value. Didn’t they say that last year? At least now they don’t have the distraction of activist shareholders, some of whom gave up and sold, and others may ride it out for the long term. I really hope they succeed, because it will be good for the industry. But the biggest stumbling block? Laser-focusing on 1,100 communities.