Avoiding The MAC Clause?
Last week, we were surprised to hear that a few companies quickly drew down on their revolving lines of credit. In the case of Ventas, the amount was $2.75 billion and they withdrew 2020 earnings guidance as well. For Brookdale Senior Living, they did a full drawdown of an unspecified amount, and also withdrew their 2020 earnings guidance. Omega Healthcare Investors drew down $300 million. Mostly, these were stated to be for precautionary and future liquidity reasons. We were a little surprised that a few more companies did not withdraw 2020 guidance, but perhaps they are not at risk as much as Brookdale and Ventas with the seniors housing uncertainty and... Read More »
Stock Buybacks vs. Dry Powder
Should REITs be using excess cash to buy back their shares at cheap prices, or wait and go bargain hunting for cheap properties? Good morning. I am in day nine of my 14-day self-quarantine, and have yet to go stir crazy. Apparently, in Connecticut, liquor stores are exempt from the shut-down. Hmmm. While we hear anecdotally that occupancy levels in seniors housing remain relatively unchanged, I do not see how that will remain so in the coming weeks and months. Companies and owners, such as REITs, are just beginning to report confirmed cases of COVID-19, along with the unfortunate deaths. While expected, we still continue to hope they can keep it to a minimum. One thing I am a little... Read More »Irrational Valuations for REIT Shares
What a week it has been. At the market’s close on Wednesday, Ventas was yielding 18.7%, Omega Healthcare Investors 18.0% and Sabra Health Care REIT 30.4%. This assumes they all maintain their current dividend rates. Ventas just announced the payment date for its dividend at the same rate as last year. Of course, Ventas plunged by 19% on Wednesday, Omega by 17% and Sabra by 20%. These drops, on top of the previous weeks’ plunge, caused yields to skyrocket. Obviously, this is irrational, even in these days of the coronavirus/Covid-19 pandemic (CV-19). All of the other healthcare REITs fared poorly as well. But does this represent a buying opportunity?... Read More »
Genesis HealthCare Sees Share Value Rebound
It’s no surprise that Genesis HealthCare has seen a significant drop in its share value as a result of Covid-19. The company owns and operates facilities that care for a medically-complex population that is most vulnerable to the virus, which is a huge risk in itself. The horrifying situation at a Life Care Centers facility in Kirkland, Washington, where 129 cases of Covid-19 have been confirmed (81 residents, 34 staff members and 14 visitors) and 35 people have died (more than half of the state’s total), has also colored the image of SNFs in this situation, probably contributing to the flight of capital from the sector’s stocks. During the massive... Read More »
People on the Move, March 2020
Right before Covid-19 brought everything to a stand-still, there were some hiring announcements in the senior care industry worth mentioning. We hope virtual onboarding can be just as effective. JLL Capital Markets announced that Alanna Ellis has joined the firm as a Director in its Seattle office and will be responsible for sourcing debt and equity placement business for healthcare, seniors housing and hospitality transactions. Ms. Ellis has 22 years of real estate experience, with the last 12 years focused exclusively on the commercial real estate finance and development sector. Most recently, she was a Senior Partner/Vice President of Commercial Lending at IPG, where she worked for 13... Read More »Schedule a demo
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