National Health Investors Beats the Odds
Sometimes the regular, tried and true sale/leaseback arrangements that used to be the mainstay of REIT financing still work. Just ask National Health Investors (NHI). After reading some of the depressing second quarter earnings releases, some more than others, it was a bit refreshing to see that NHI reported an 8% increase in lease income, an 11% increase in net income, an 8% increase in net income per share and a 7% increase in FFO per share, all year over year. And you thought the sky was falling. The REIT collected about 100% of second quarter’s contracted rents, and approximately 96.9% of rents due in July (so far). Have they granted some concessions? Sure, for the... Read More »
Private Equity And Nursing Homes
There have been a lot of stories in the media about private equity and nursing homes, often by The New York Times, which seems to have a “thing” about the nursing home industry. All that we have seen has been negative in varying degrees, mostly dealing with cuts in staffing, declining quality of care and increased leverage. But a recent study by three academics from UCLA and Duke took a very detailed look at what happened to staffing, specifically nursing, when PE firms bought nursing homes. The study also tried to pinpoint what caused PE firms to change the level of staffing, as well as which staff jobs went up or down. The study covered 77 PE acquisitions covering... Read More »
Brookdale, Genesis Report Tough Quarters
Brookdale Senior Living and Genesis HealthCare, the two largest providers, were not spared from COVID’s devastation in the second quarter. The two largest providers in their respective sectors, Brookdale Senior Living in seniors housing and Genesis HealthCare in skilled nursing, did not escape COVID’s wrath. No one expected they would. Fortunately for Brookdale, they have negotiated most of their underwater leases, so that will lessen the economic pain. But consolidated occupancy fell 440 basis points from the first quarter to the second. As of July 31, occupancy was at 76.6%, 120 basis points below the June 30 level. And COVID is spreading in two of its largest states, Florida and... Read More »
For Ventas, Welltower, Second Quarter Could Have Been Worse
Second quarter earnings reports are not done yet, but the majority of the companies and REITs have reported. We were obviously not expecting a good quarter, but given the trend lines from March through June, the results could have been worse. In fact, for many companies it appears as if the worst is behind them. Or maybe it is better said that the bad news is getting less so. Let’s just say, the fat lady has not completed her song yet. Before we get into some of the specifics of the two largest REITs, which happen to have the largest seniors housing operating portfolios, we do have some observations from the companies reporting. First, it appears that labor costs have declined for... Read More »
The Ensign Group Hits Record, Raises Guidance
We didn’t expect much positive news from the plethora of earnings announcements coming out these two weeks, but The Ensign Group defied expectations by achieving its highest adjusted earnings per share in its history of $0.78, an increase of 100% over the second quarter of 2019 and slightly above the previous record-setting Q1:20. The operator also raised its 2020 annual earnings guidance to $3.00-$3.10 per diluted share, up from the previous guidance of $2.50-$2.58. The news sent its share price soaring from $48.68 at close on August 5 to $57.99 on heavy volume on August 6 and even higher to $58.32 on August 7. Ensign also announced that it has returned all of the PPP... Read More »Schedule a demo
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