Several publicly traded seniors housing and care companies released their first earnings reports after the COVID-19 crisis, and while most of the results showed signs of the virus’ effect, the worst is most likely yet to come. As a consequence of that, each company pulled their 2020 guidance, but no surprise there. 

LTC Properties reported on May 4th, and there were some results unfortunately typical for this time. Private pay occupancy fell from 86% at December 31 to 83% by March 31 and 80% on April 23rd. For skilled nursing, average monthly occupancy for December 2019, March 2020 and April to-date respectively was 79%, 78% and 75%. That drop from March to April is roughly in line with some people’s projections for the industry, but when will the fall stop? 

The REIT also deferred about 7% of its April contractual rent, totaling $772,000 for six operators, mostly in the seniors housing sector. So far, $137,000 of that has already been paid back, but we will see what sort of deferrals will be asked for and offered in May. The good news there is that LTC has already collected 55% of May’s rent by the 1st, with rents still coming due up to the 15th. Revenues were up year over year thanks to various acquisitions and new developments, and net income was higher as well. But LTC expects to see expenses rise with increased PPE costs, purchases of sanitizing supplies, and especially higher payroll. 

After completing the disposition of its Preferred Care portfolio in the first quarter and exiting a preferred equity investment in four properties owned by an affiliate of Senior Lifestyles, LTC Properties also addressed how it would deploy that new capital going forward. With due diligence so difficult these days, and operators fully focused on dealing with the current crisis, the REIT commented that it will probably stick to providing structured finance products that could include preferred equity investments, mezzanine loans, bridge loans, construction loans, -and uni-tranche loans, giving them a better risk-adjusted return and also a shorter investment horizon in this volatile time. 

Omega Healthcare Investors also announced its first quarter results on May 4, and the REIT appeared in good financial health heading into the crisis. Revenues were up quarter over quarter, thanks to over $1.7 billion of new investments, and so were net income and EBITDA. Omega also reported that in April it collected 98% of rents, mortgage interest and notes, and has so far not received any deferral requests for May. Its interest expense for the quarter was higher compared with Q1:19, and the company took steps to strengthen its balance sheet and improve liquidity. That included borrowing about $300 million under its revolving credit facility (still leaving over half of the $1.25 billion facility remaining), entering into $400 million of 10-year interest rate swaps (expiring in 2024) at an average swap rate of 0.8675%, and maintaining significant stores of cash and cash equivalents, about $490 million as of April 30. 

Omega’s Maplewood Senior Living development on Second Avenue in Manhattan is finishing the final phases of construction, but its opening was pushed back to Q3 at the earliest, when it was supposed to open at the end of the first quarter. And the project’s cost will rise, but how much higher than $310 million, or over $1.44 million per unit, we do not know yet. Maplewood is still paying rent on the property. Across the company’s seniors housing portfolio, Omega did note that it was seeing a 1% to 3% drop in occupancy per month as a result of touring and visitation bans, but for some of its skilled nursing operators, the decline was steeper, ranging from 3% to 6%. 

Healthpeak Properties touted its strong balance sheet and available liquidity, while it’s SHOP NOI declined 3.2% year over year. Without COVID-19, the company expected to see no change year over year. From March 31 to April 30, occupancy across the SHOP portfolio fell 300 basis points to 82.2%, with move-ins declining 73% and move-outs increasing 22% compared with April 2019. Skilled nursing census in PEAK’s CCRCs dropped even further, by 1,620 basis points, driven by low Medicare discharges from hospitals (which normally makes up a significant portion of the census) after elective procedures were delayed.  Unsurprisingly, expenses rose across the SHOP and CCRC portfolios as a result of COVID-19, by about $3 million. In terms of rent collection across its triple-net portfolio, Healthpeak collected 97% of it in April, and 100% in the first quarter. 

As far as liquidity, the company seems pretty prepared for the oncoming slog, settling its remaining equity forward contracts to bring its total liquidity to $3.0 billion. Healthpeak has full availability on its $2.5 billion revolving credit facility and has approximately $500 million of cash and cash equivalents on hand. That should help moving forward, but maybe we’ll see a couple of opportunistic acquisitions too?