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 »2014, the top-heavy year
As 2015 passed by and 2016 hits the half-way point, we are further reminded of just how extreme a year 2014 was, in terms of seniors housing pricing. This was yet again on display when looking at the price-per-unit spread between stabilized and non-stabilized assisted living properties from 2014 to 2015, according the 21st Edition of The Senior Care Acquisition Report. Stabilized assisted living properties in 2014 sold on average for $230,300 per unit, while non-stabilized properties sold for an average of $139,000 per unit, for a spread of $91,300. However, this spread greatly diminished in 2015 to just $61,500, with stabilized properties averaging $200,600 per unit and non-stabilized... Read More »
Bed Sores and Advertising
Law firm advertising may be hitting a new low. I like to watch the news when I eat breakfast, and I must say, Brookdale Senior Living has been bombarding the airwaves with their folksy ads with real employees. Every morning, at least one ad. But the past two mornings, I had the unpleasant experience of seeing a completely different sort of ad, and something I had only seen in Florida over the years. It was for a law firm, and it was asking whether you or a loved one had experienced any number of problems at a skilled nursing facility. An unexplained fall, bruising or weight loss? The worst of it was the phone number they wanted you to call. It was 1-800-bed-sore. Really? Bed sore? I know... Read More »The price of empty beds
Not surprisingly, buyers generally pay more for an already stabilized facility, but did the rise in high-acuity sub-acute/transitional care, which can often still be profitable despite an occupancy in the low-80s, lead to a price increase in what we call “non-stabilized” facilities (defined as having an occupancy under 85%)? Well, not in the skilled nursing market. Stabilized facilities saw a slight increase year-over-year, from $94,100 per bed in 2014 to $96,500 per bed in 2015. However, we saw a decrease in the average per-bed price for non-stabilized facilities, from $63,900 in 2014 to $54,300 in 2015. So, the spread between stabilized and non-stabilized grew from $30,200 in 2014 to... Read More »Schedule a demo
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