Biden Administration Wants More SNF Transparency
The Biden administration is at it again. While he had just a passing reference to skilled nursing in his State of the Union address, Joe Biden is back at it now. They are continuing with the mantra that after private equity firms buy nursing homes, the mortality rate increases by 10%. However, they do not say why and what other influences there may be, such as higher acuity rates, which would by definition result in more deaths. Private equity firms always try to get their operators to increase the Medicare census in facilities they purchase because that is where the profits are, not in custodial care Medicaid patients. This is partly why there is an increase in taxpayer spending after a... Read More »
Good News For Ventas, and Seniors Housing
Ventas just released its fourth quarter earnings as well as full-year 2022, and its seniors housing portfolio is looking up. Year-over-year same-community performance improved in all categories. Average occupancy increased by 140 basis points to 82.5%. While this is not a great increase for a 12-month period given the lows they were coming from, we’ll take it. Same-community cash net operating income increased year over year by 19.1% to $150.5 million, and the operating margin expanded by 220 basis points to 24.5%. Now, this is not even close to the old days, but a nice pickup. We believe, however, that these numbers include the various government payments which are going away, so the... Read More »
Baier’s Brookdale Butcher Block
On Friday the 13th (kind of cute, isn’t it), Brookdale Senior Living announced some major C-Suite changes, including the removal of Steven Swain as EVP and CFO effective February 24th, with the current Chief Accounting Officer taking over those roles while remaining the CAO. In addition, Kevin Bowman is out as EVP of Community Operations (basically the COO) effective January 12th. The two division VPs for the East and West will now report directly to CEO Cindy Baier. We are not sure what happened, but this seems a little like blaming these two senior executives for the 50% plunge in Brookdale’s share price as a result of the recent dilutive equity raise. We don’t know where this equity... Read More »
Omega Healthcare Investors Working through It
Omega Healthcare Investors just provided an operator update, and the REIT will be working through some lingering problems for at least another year, if not longer. Perhaps the biggest problem remains Maplewood Senior Living, a Connecticut-based provider of assisted living and memory care services that is located about 10 miles from our Connecticut HQ. We tried to reach out to the founder several years ago, trying to be “neighborly,” but our efforts were ignored. Maybe they could have received some good advice. The company’s initial developments were on Connecticut’s Gold Coast, in the high-income neighborhoods of Fairfield County. Now, these areas are known to be high-barrier-to-entry... Read More »