Being Public in Senior Care
In the first of his Fireside Chat series, our Editor Steve Monroe takes a deeper look at one of the pressing questions facing the senior care industry these days, is it worth it to be publicly traded in this space? Be sure to stay tuned for more Fireside Chats in the coming months, when Steve will give his thoughts on topics like the future of REIT financing, risk-taking in the market, and the role that CEOs and other C-Suite members should be playing in their companies... Read More »
Senior Housing Properties Trust Still Falling
It has been more than a week since Senior Housing Properties Trust (SNH) and Five Star Senior Living made their announcement about a complete restructuring of the relationship. Five Star’s shares have not recovered, nor were they expected to. But for Senior Housing Properties Trust it has been down, down and down. SNH’s shares have dropped for eight days in a row since the announcement, for a cumulative loss of 29%, so far. And the share price is down 40% from its 2019 high of $14.25. At the low end of the estimated range for the new dividend rate (55 cents to 65 cents annually), the yield would now be 6.3%. That is down from the current 18%. But actually, a 6.3% yield may be too high for... Read More »
Doom and Gloom for SNFs?
Skilled nursing facilities are closing at an alarming rate, so should we be worried about a shortage of beds in 10 years? There have been a lot of reports in the media recently about skilled nursing facilities closing down, just shutting their doors, and this is not just in rural areas. Low Medicaid rates have been blamed for this, and in many states, reimbursement levels have not even come close to keeping up with wage inflation, not to mention other costs. And this is 10 years into our economic recovery. Imagine what will happen during the next recession when state tax receipts decline. But there is something else going on as well. Skilled nursing occupancy rates have been trending down... Read More »
Five Star Finally Restructures With Landlord
Five Star Senior Living and Seniors Housing Properties Trust announce a dramatic restructuring of their relationship, and all shareholders seem to lose, at least for now. Five months after Five Star Senior Living issued its “going concern” announcement, the financially troubled company finally came to an agreement with its landlord, Senior Housing Properties Trust, to restructure its leases. Looking at the terms, it appears that both companies had a gun to their heads, as there really do not appear to be any winners here. Five Star will have the leases convert to a management contract by the end of this year, with reduced rents in the meantime, which obviously gives them a cash flow break,... Read More »
Strong M&A Activity Continues
As we head to the end of the first quarter, seniors housing and care M&A activity may reach 100 transactions for the fourth consecutive quarter. I should no longer be amazed by how strong the seniors housing and care M&A market remains, given all the headwinds we hear about all the time. From the public companies, Capital Senior Living’s stock took another tumble last week and Five Star Senior Living continues to struggle, but may soon get some rent relief. Nevertheless, buyers keep on snapping up senior living and skilled nursing properties. We are approaching the end of the first quarter, and that often means a fair amount of deal announcements the last week. Before we get those,... Read More »Schedule a demo
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