Welltower Provides Update Amid COVID Spread
Once again, we are not picking on Welltower, but as the largest healthcare REIT, and the one with the largest seniors housing owned portfolio (or SHOP/RIDEA), we believe they represent a pretty decent proxy as to what is happening. Occupancy in its SHOP portfolio has been steadily declining since February, but the rate of decline seemed to be abating. Gone are the days of 100+ basis point monthly drops, but October was the first month where the rate of decline (-40 basis points) actually increased since April. Month to date in November, it has already dropped by another 30 basis points (to 77.7%), so if that trend continues, we could see November at a 50-basis point... Read More »
The Pennant Group Swinging For The Pennant
We don’t know what is in the water out west (well, yes, we do) that makes The Pennant Group and its former parent, The Ensign Group, so successful. As readers know, Ensign returned the federal CARES Act funds they had received and posted another good quarter. Taking in COVID patients at its nursing facilities, and the higher rates that come with that, certainly helped. But the spin-off Pennant Group also had a solid quarter, when its seniors housing friends did not fare as well. But Pennant’s home health and hospice business performed quite well, as did most of that sector, benefitting from the desire to be treated at home when institutional care seemed a... Read More »
Valuing SNFs During The Pandemic
With occupancy at historic lows, and expenses in flux, it has been difficult to value nursing homes in today’s market. But it is happening every day despite the uncertainty. With occupancy still in turmoil and many nursing homes reliant on federal aid to pay the bills, it must be quite difficult to underwrite and value individual nursing facilities, let alone a portfolio of them. But it is happening every day. What assumptions do you make for occupancy, and census mix? What is a normalized level of PPE expenses, and will this be indefinite? And then you have labor costs and supply. With a Biden/Harris administration, is a $15 national minimum wage around the corner, and will... Read More »
Senior Care Soars
What happened on November 9 was a bit of a shock, but in a good way. Senior care and REIT stocks soared after a year of forgettable foibles. The reason? Pfizer’s announcement that its COVID-19 vaccine was more than 90% effective, and that it could be available very soon, combined with the apparent end of the presidential election with Joe Biden the victor. We believe it was the end of the uncertainty on both accounts that pushed the market up. For those not paying attention, the Dow Jones Industrial Average at one point during the day hit a record high of 29,933, up 5.68% from the previous close. It ended the day up 2.95%. But it was the senior care market and its related REITs... Read More »
Capital Senior Living Continues to Shrink
As many of you know, for several years we have been pressing Brookdale Senior Living to reduce its size further than what it has already accomplished. In the meantime, Capital Senior Living is getting smaller by the day, and while we understand why, we certainly hope Brookdale does not go down this somewhat extreme path in size (very doubtful). Cap Senior is now forecasting to be one-half the size it was two years ago, with 60 owned communities and eight managed. The leases will be gone. During the course of the third quarter, like other operators, Capital Senior Living has been improving its capital structure, shedding unprofitable leases, handing properties over... Read More »Schedule a demo
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