Brookdale vs. Land & Buildings

Jonathan Litt of activist investor Land & Buildings has sent yet another letter to Brookdale Senior Living shareholders, still calling for a sale of the real estate.

It appears that Brookdale Senior Living is at the early stages of righting its ship. And, activist investor Jonathan Litt of Land & Buildings has been complimenting management for its actions in the past year. But he still is not happy.

Who could blame him with Brookdale’s share price still in the toilet at under $8.00 per share. He continues to believe the market is not recognizing the inherent value in Brookdale’s owned real estate, to which we continue to say, that is not how the market should value an operating company.

He continues to call for a sale of the assets, $500 million to $1 billion worth, perhaps forming a REIT to buy them. To which we continue to say, that would be a great way to handcuff the new management team.

Brookdale has taken major steps to strengthen its capital structure. Why make it worse by leveraging its assets, or getting rid of them? Maybe three or five years from now, but now, when it needs to focus on operations and increasing cash flow? The share price will rise when investors believe Brookdale is truly out of the hole dug a few years ago. Selling assets today is not the answer, other than the remaining bow-wows.  

 

 

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