Development Alive and Well in New Zealand
A 300-unit CCRC is planned for Queenstown, more known for its youth, extreme sports and tourists. Read More »
Five Star and Senior Star… Again
Oh boy, here we go again. Bill and Bob Thomas have sent another letter to shareholders of Five Star Quality Care, of which they own about 3.4 million shares, or 6.8% of the company. As shareholders, they are glad that management realized that they had some valuable assets, the full value of which is not reflected in the share value. It rarely is. But, as we pointed out a few months ago when Five Star sold a few assets for a big price, and a big gain, with seven properties worth more than the market cap of the entire company, they are also subjecting themselves to a big lease payment liability, which will cut into cash flow. As shareholders, this is not making the Thomas brothers happy.... Read More »
Valuations Remain High Across Senior Care Spectrum
Average prices for the four quarters ended June 30 dipped a little but most remain higher than calendar year 2015. Cap rates are slowly rising. Earlier this month, we reported that the seniors housing and care M&A market, based on the number of transactions announced in the second quarter, as well as the first six months of 2016, was ahead of last year, but not by a large margin. It was the dollar amount of those transactions, however, that has declined because of the dearth of the large sales. Now we have come out with our rolling four quarters data, and the results are not surprising. The conclusion is that based on valuations, the market remains relatively strong. In the skilled... Read More »
Continued Uncertainty At HCP
Lauralee Martin is out as CEO, but who will be in remains a mystery. The only thing surprising about the “sudden” announcement that Lauralee Martin stepped down as CEO of HCP, Inc. was that the effective date of her departure was also the announcement date. Now, we don’t want to read too many tea leaves into the situation, but remember that she came into the CEO position from the Board nearly three years ago in a tumultuous dumping of the previous CEO. She already had a top job at another real estate company and didn’t really need the aggravation. But she steered the REIT through another tumultuous period with, first the two lease adjustments, and then the in-process spin-off of the $6... Read More »
Seniors Housing and Record Low Interest Rates
The 10-year Treasury note rate hit a record low, but is that good news or bad? In case you haven’t noticed, the 10-year Treasury note rate, which is used for pricing many debt instruments, has fallen to a record low. Anything between 1.50% and 2.00% was considered to be Nirvana for seniors housing borrowers. But the 10-year rate has now dropped below that range, and has been flirting with 1.35%. Remember talk about rising interest rates? Yes, at some time it will happen, but that time seems to be getting pushed out into the more distant future with each piece of bad news. So for seniors housing borrowers this may appear to be good news. Except once you get beyond the euphoria of your... Read More »Schedule a demo
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