Brookdale Occupancy Declined As Expected
Brookdale Senior Living was no different from the rest of the market, posting sharp drops in first quarter occupancy. When we wrote the May issue of The SeniorCare Investor, we had to make some assumptions before Brookdale Senior Living announced its first quarter earnings. One assumption was that its occupancy rates had dropped given everything else we had heard in the market. Our assumptions were right. The legacy Emeritus properties posted a 110 basis point decline from the fourth quarter of 2014, and a whopping 200 basis point decline from a year ago. The legacy Brookdale properties dropped 80 basis points sequentially and 110 basis points from a year ago. This was not good news, but... Read More »High prices for struggling AL communities
You know we are in a strong seller’s market when even the non-stabilized properties are worth on average 68% more in 2014 than in 2013. After hovering around $85,000 per unit in 2012 and 2013, the average price paid for non-stabilized assisted living communities (which we define as having an occupancy lower than 85%) in 2014 was about $139,000 per unit, showing that buyers are worrying less about the potential of filling empty rooms. Maybe all this talk about demographics has convinced many buyers that seniors will be knocking on their door in just a matter of time. Read More »REIT Shares Under Pressure Again
Rising interest rates are sending health care REIT shares down, but will it last? The timing could not be worse. What am I talking about? The recent rise in interest rates and its impact on REIT share values, not to mention looming acquisitions. The 10-year Treasury rate hit a low of 1.65% in February, which most people did not think was sustainable. It has now risen by a third, or 55 basis points, to 2.20%. That is a huge percentage change in rates, even though still quite low from an historical perspective and much lower than the jump in the spring of 2013 that sent REIT share prices plunging by 25%, which was a big overreaction. Easy for me to say. But with the recent rise in rates,... Read More »Valuations soar for “A” quality IL properties
The higher valuations in 2014 (according to the 2015 Senior Care Acquisition Report) should surprise no one. The average price paid per unit for “A” quality independent living communities rose 21.8% from $228,200 in 2013 to $277,900. But, the lesser quality deals didn’t hold back either. In fact, the average price paid per unit for “B” properties rose 55.8% from $99,600 in 2013 to $155,200. This goes to show that in today’s market, just about any piece of property will garner interest from a buyer, as long as it can show potential for profits. Read More »Brookdale May Be One Step Closer
With two new board members and some corporate governance changes, Brookdale Senior Living seems to be heading on the path of a major real estate event. What can I say, management at Brookdale Senior Living seems to be going down a path that I recommended they not take. Imagine that. Rather than have a public shareholder fight, they have added two new board members with some serious real estate experience, which is what activist investor Sandell Management wanted. The share price, however, closed early this week at its lowest level since March 6. Hmmm. We know that management and the board are supposed to make decisions to enhance shareholder value. I get it. But here is the problem. What... Read More »Schedule a demo
Gain access to the best healthcare and long-term care investment intelligence, data, and analysis.
