Changes at HCP, Brookdale, Genesis
Earnings season brings more than just earnings to the surface for some companies. What can I say? It has been quite a week, and we are only at Wednesday. On Monday subscribers received my initial take on HCP’s announcement about spinning out its HCR ManorCare portfolio into a new REIT. Maybe management thought it was necessary, but I really think we are going to be hearing some negative news in the future, and if so, it will make HCP’s decision look better. Just look at the performance of Genesis Health in the first quarter, which sent its share price plummeting by 20% yesterday. One problem is that with the HCR portfolio representing more than 25% of HCP’s revenues, with it gone,... Read More »
Skilled Nursing Facilities Are Not Prisons
Apparently, The New York Times thinks people are “held” in nursing facilities, at least in South Dakota. I don’t know if any of you caught yesterday’s front-page headline in The New York Times, but it really got me mad. The headline was, “Thousands Are Held Wrongly In Nursing Homes.” Held? Are they talking about prisons? I know no one wants to be there, but they are not “held.” The article was about South Dakota, where apparently people who should not be in a skilled nursing setting are there because there are no other options. At least none that will be paid for by someone else. One resident told investigators that when friends came to take him out for a ride, they had to sign... Read More »The Growing Memory Care Market
Memory care is a growing need, and it has been the focus of a lot of new development. But it can be risky as well. Last week I talked about the first quarter occupancy and new construction stats, but today let’s focus on memory care. This has been an area of heightened investment interest because there are fewer memory care units in the market then AL and IL and, unfortunately, the need for memory care will only increase, and may increase at a faster pace than traditional assisted living. Some providers are even seeing an increase in the “young” population with memory care or other dementia-related issues, and I am talking about under 70 years old and not just retired NFL players. It is a... Read More »Occupancy, Rates And Discounting In Seniors Housing
The recent NIC MAP data on occupancy, development and rate growth can be interpreted in many ways. So, what are we really to make of the NIC MAP data for the first quarter? Most of the data was viewed positively, despite a smallish decline in occupancy from last year’s fourth quarter. Absorption levels have been increasing, according to the data, and construction starts as a percent of existing supply declined from both the fourth quarter and the year-ago quarter. Does this mean that the much-feared over-building threat has dissipated? Hardly, as one quarter’s worth of data does not present a strong trend, and it is possible the small decline in starts was related to the chaos in the... Read More »The Future of the 40-Year Old SNF
Nearly half of the skilled nursing facilities in the U.S. are 40 years old and older, and that is going to be a big problem? Have you ever wondered what is going to happen to all those skilled nursing facilities that were built in the 1960s and 1970s, and look it? Some are even older, although I hope most of them have had some sort of renovation over the years. These “old” nursing facilities are going to struggle over the next 10 years, if they are not already struggling today. They are usually small from a square feet per bed basis with a high Medicaid census. Many would have difficulty taking care of high acuity subacute patients. And I suspect most would not be sought after in any kind... Read More »Schedule a demo
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