No Summer Vacation From Deal Flow
August used to be the month for vacations, but for some, not this year. August is supposed to be a sleepy month. But as soon as I left on a summer vacation, the biggest deal of the year was announced, and we had a series of uneven earnings reports from the few remaining public companies. The large acquisition by Welltower was a bit of a surprise because we thought that deal had died late last year. And it did, a few times. And with a sub-6% in-place cap rate with occupancy for the portfolio so low, Welltower is obviously counting on a change in management to spruce up the cash flow. Great locations yes, but we thought the Big Three were taking a break from the high-priced portfolios. I... Read More »
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 »Schedule a demo
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