Senior Care Leading Indicators
There has not been a lot of good news, but given some leading indicators, the next development boom may be a bit further out than we had expected four months ago. Our focus for the past 12 months has been on the coronavirus pandemic and what it has done to seniors housing and care occupancy rates. We are also on record as stating that getting back to pre-pandemic census levels may take up to four years, partly because we expect development to ramp up again when developers eye the post-2025 demographics. But something else has been happening that may keep some builders away. First, the 10-year treasury rate has more than doubled in the past seven months. Yes, 1.36% is still attractive, but... Read More »
LTC Properties Transitioning Senior Lifestyle Corp.
LTC Properties reported fourth quarter and full year earnings late last week, and while there is some uncertainty, management appears to have a good handle on how they are dealing with it. This is especially true with the 23 communities leased to Senior Lifestyle Corporation (SLC), which we will get to below. One interesting statistic that came out is that with 71% of their private pay tenants reporting, actual occupancy dropped from 79% on September 30 to 72% on December 31, one of the largest quarterly declines we have seen. The good news is that one month later occupancy stood at 71% on January 31, so the rate of decline has slowed significantly. LTC’s... Read More »
Buyers Paid Premium For Strong Operations in 2020
In 2020, there was yet again a perfect correlation between the average price per unit paid for seniors housing communities and their operating margins. Throughout 2020, as occupancy and cash flow at senior care facilities dropped and costs of financing rose, we wondered exactly how the pandemic would affect the pricing of these assets. Would it have a disparate effect on skilled nursing versus seniors housing properties, older properties versus new ones, or on stabilized facilities versus non stabilized. We are almost done compiling all these statistics in the 26th Edition of The Senior Care Acquisition Report, but we wanted to highlight a historical trend that continued even through... Read More »
Boosting Your Census Now
Occupancy levels continue to decline, yet demand seems to be increasing as customers are coming back to take a look. There is a disconnect between the seller and the buyer that needs to be fixed now. The public companies are about to start releasing their earnings and census reports, and it may not be pretty. But, it does not have to stay that way. My gut tells me that a lot of sales staff have been blaming the virus on their inability to sell and fill units. Makes sense, right? But what if how they are selling, and communicating, or not communicating with customers, is the real problem? Do you think management and salespeople have adapted to the new environment, the new mentality of... Read More »
Welltower Still Sees Opportunity
We all know that Welltower has been selling a few billion of seniors housing assets just like Healthpeak Properties has. But the difference is that Welltower is still buying. Not only that, they picked up a 790-unit portfolio operated by Harbor Retirement Associates for $132 million, or $167,000 per unit. The seller? Healthpeak (see story above). Even though the portfolio had negative lease coverage, we are sure Welltower is looking at that well-below-replacement-cost pricing. But Welltower needs to pay attention to its own operating portfolio, where occupancy continues to decline. The average census was 77.3% in November, falling to 76.3%... Read More »Schedule a demo
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