Brookdale vs. Ventas
They took it to the wire, but Brookdale Senior Living decided not to renew its leases with Ventas covering 120 communities in a Master Lease that expires December 31, 2025. The deadline was November 30, and they let it pass. Ventas will still collect $113.6 million in lease payments next year, and all parties have previously stated that the properties have been covering the lease payments in full. Even though it was an all or nothing renewal option, we were hoping that the two sides would come to an agreement to perhaps split up the portfolio. The problem is that both sides would have wanted to keep the better performing properties. Now, Brookdale no longer has the right to extend the... Read More »
Change Coming To Life Care Centers of America
What is happening at Life Care Centers of America is a great example of how not to establish a succession plan, especially when it involves one of the largest privately owned senior care companies in the country. The company was founded by Forest Preston nearly 75 years ago, and he remains the CEO and sole shareholder of a company that is purported to be worth close to $1.2 billion. But he really has not run it for years. I sat down with Forest about 15 years ago, when he agreed to do a long interview with me about his entire life and career. I could tell something was off, and he had a “minder” constantly by his side. But he was agreeable to do this with me, and seemed to look forward to... Read More »
Sonida Senior Living Keeps Pushing Census
We have been impressed by Sonida Senior Living management’s ability to get out of its census, cash flow and balance sheet difficulties over the past year. After some acquisitions this year, the company now operates 93 senior living communities, most of them owned. In the third quarter, same-community occupancy for 61 communities increased by 210 basis points year over year to 87.0%. That is well ahead of many other operators, as well as higher than the NIC MAP census averages. They are well on their way to hitting the elusive goal of 90% occupancy. Speaking of 90% occupancy, management believes that when they reach it for their same-community portfolio, the NOI margin for these... Read More »
60 Seconds with Steve Monroe: The Election And Senior Care
So, the 2024 election results are in, and many people were surprised, many shocked, some cried and some cheered, and many who did not vote wished they had. But wherever you are on the political spectrum, if you invest in seniors housing and care, the outlook for you may be better with the election outcome. I say that because Mr. Trump is more pro-business and pro-real estate than Ms. Harris, and the Biden/Harris administration was set to make some changes in staffing and PE investing which our sector was not too happy about. The proposed nursing home staffing mandate will most likely go out the window, and pressure on private equity investing in seniors housing may be put on the backburner... Read More »
Brookdale Q3 Results Disappoint
Historically, and we are going back more than 12 years, the third quarter has been the best quarter of the year for occupancy increases, and usually cash flow increases based on those census jumps. This was certainly the case for Welltower and Ventas this year, the two largest owners of seniors housing communities. Unfortunately, Brookdale Senior Living, which continues to underperform the market and lags these two REITs, leaves investors disappointed and wondering what is wrong. And dare we say disillusioned with management’s forecasts, which have not panned out at all this year. Don’t get us wrong. Occupancy has increased, but not in the way investors expected, and “little” things like... Read More »Schedule a demo
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