Beware The Flu Season?
Fears of the flu season compounding the effects of the “second wave” of the coronavirus are overblown, and this is why. Almost every conversation surrounding the coronavirus and outbreaks in nursing homes or assisted living communities eventually gets around to the double whammy of a “second wave” combined with the upcoming flu season. Yes, providers will have to be vigilant, but they have never been as well prepared for the flu season as they are today. Think about it. Less than a year ago, do you remember ever walking into any senior care facility where the staff were all wearing masks, where hand sanitizers were everywhere, where your temperature was taken at the entrance,... Read More »
Are SNFs About To Go Out Of Business?
A recent survey by the American Health Care Association reveals some disheartening news. If you believe the results of a survey of 463 nursing home providers by the American Health Care Association, well, we are in bigger trouble than I thought. Apparently, 40% of the respondents said they would not be able to sustain operations for another six months at the current “pace,” which we assume to mean the current census and cost levels. A whopping 72% said they would not be able to sustain operations for another year. The problem is that they, unlike the private pay seniors housing industry, have already received several billion dollars of financial aid to help during the pandemic. If they... Read More »
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 »Schedule a demo
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