Doom and Gloom for SNFs?
Skilled nursing facilities are closing at an alarming rate, so should we be worried about a shortage of beds in 10 years? There have been a lot of reports in the media recently about skilled nursing facilities closing down, just shutting their doors, and this is not just in rural areas. Low Medicaid rates have been blamed for this, and in many states, reimbursement levels have not even come close to keeping up with wage inflation, not to mention other costs. And this is 10 years into our economic recovery. Imagine what will happen during the next recession when state tax receipts decline. But there is something else going on as well. Skilled nursing occupancy rates have been trending down... Read More »
Five Star Finally Restructures With Landlord
Five Star Senior Living and Seniors Housing Properties Trust announce a dramatic restructuring of their relationship, and all shareholders seem to lose, at least for now. Five months after Five Star Senior Living issued its “going concern” announcement, the financially troubled company finally came to an agreement with its landlord, Senior Housing Properties Trust, to restructure its leases. Looking at the terms, it appears that both companies had a gun to their heads, as there really do not appear to be any winners here. Five Star will have the leases convert to a management contract by the end of this year, with reduced rents in the meantime, which obviously gives them a cash flow break,... Read More »
Strong M&A Activity Continues
As we head to the end of the first quarter, seniors housing and care M&A activity may reach 100 transactions for the fourth consecutive quarter. I should no longer be amazed by how strong the seniors housing and care M&A market remains, given all the headwinds we hear about all the time. From the public companies, Capital Senior Living’s stock took another tumble last week and Five Star Senior Living continues to struggle, but may soon get some rent relief. Nevertheless, buyers keep on snapping up senior living and skilled nursing properties. We are approaching the end of the first quarter, and that often means a fair amount of deal announcements the last week. Before we get those,... Read More »
Genesis Occupancy Stabilizes, Finally
After several years of declining occupancy, operations seem to be stabilizing at the largest skilled nursing provider in the country. It has not been an easy past few years for Genesis Healthcare, or for the entire skilled nursing sector. But we always thought there would be some light at the end of the tunnel, and that nursing facilities would not go away, despite predictions of that for two or three decades. Genesis had seen its occupancy decline pretty steadily for several years. But in the 2018 fourth quarter, census actually increased by 90 basis points from the year-ago quarter, to 85.6% based on operating beds. Genesis also posted sequential and same-facility increases. The company... Read More »
Capital Senior Living Jumps
After plunging to a low of $3.82 per share after fourth quarter earnings were released, shares of Capital Senior Living are showing some bounce. We are sure the market has noticed that the C-Suite has been buying. The price is now up 26% in less than a week. Timing is everything, and the CEO added to her holdings with the purchase of 10,000 shares at $3.954 on March 7 and the CFO 5,135 shares at $3.886 the next day. Even two directors added to their holdings at the same time. I guess they all thought enough was enough. Investors always want to see insiders making purchases, especially on the price downturn, which demonstrates confidence in future performance. Activist investor Cove... Read More »Schedule a demo
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