Will Brookdale Be Back In Play?

With agreements nailed down with its major REITs, buyers may start sniffing around again at a leaner and more profitable Brookdale.

The announcement last week during the ASHA mid-year meeting, that Brookdale Senior Living had come to several agreements with Welltower on their various leases, was met with relief and renewed optimism for the seniors housing sector.

Last Friday we reported on the details of the agreements, but most people we spoke with were hoping that as Brookdale’s financial pressures ease, the negative sentiment it had created for the industry will also start to dissipate.

In addition, with the change-of-control roadblocks by the Big Three REITs now gone, always used as an excuse as to why Brookdale management couldn’t pull the trigger on a sale of the company last year, there is now renewed talk of potential buyer interest for the company as a whole. Getting rid of underwater leases helps as well.

The stock has now been trading above $9.00 since early June, and the hope is that it gets back into low double digits. At that point, some of those mystery buyers may knock on the door again. But will the new management team want to pull the trigger this time, or wait for better days ahead? Unfortunately, we don’t have a good read on the current Board.

Have a happy 4th of July.   




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