Brookdale and Ventas, a Win-Win
Just weeks after Brookdale Senior Living walked away from its lease renewal with Ventas covering some 120 communities, the two companies came to an agreement that appears to be a win-win for both. Brookdale will continue to lease 65 communities which average about 62 units each and represent 40% of the units in the original master lease. The initial cash rent on these will increase by 38% and will now be $64 million with 3% annual escalators. But for 2025, Brookdale will pay the contractual rent of $48 million on these. For the remainder, 44 communities will go into the Ventas SHOP portfolio with new operators, to be determined later. Annualized NOI for these after a 5% management... Read More »
Who Wins in Class Action Staffing Litigation
The American Seniors Housing Association and Hanson Bridgett just came out with an “Industry Brief” on the settlement of a class action lawsuit called Heredia v. Sunrise Senior Living. The settlement was approved on December 3, but the lawsuit had been winding its way through the courts since 2017. Apparently, for these kinds of staffing lawsuits this is the longest time period recorded. The basis of the class action lawsuit was allegations of understaffing, with staffing levels unrelated to the care needs of residents, as well as allegations that representations by owners/operators to residents and prospective residents that sufficient staffing was in place were misleading. While we have... Read More »
60 Seconds with Swett: Cap Rates Coming Down?
Cap rate data has been difficult to measure in the last couple of years, due to a fast-changing capital costs environment, a relatively fast-changing operating environment and, frankly, a relative absence of true “cap rate deals” where the buyer was valuing the trailing set of financials, without any funny business. Now, we are seeing more “cap rate deals” and look forward to providing our industry averages, broken out by property type, quality, age and performance in our next Senior Care Acquisition Report. Anecdotally, what we are hearing is that cap rates are compressing slightly, but in the grand scheme of things, are staying relatively high relative to the record (and some may say... Read More »
Brookdale Senior Living Occupancy Sends Mixed Signals
Perhaps when Brookdale Senior Living can better focus on a smaller number of properties when its lease for 120 communities with Ventas ends at the end of next year, they will be able to push occupancy on the remaining portfolio. The company’s size will shrink by nearly 20% if the full lease termination goes through as disclosed last week, and we have to imagine that the Ventas properties require a lot of management time. Meanwhile, the company reported November’s occupancy, and while there was some good news, census levels still disappointed us at this point in the recovery from the pandemic. Investors, however, differed from our assessment, sending the share price up by 7.5% before ending... Read More »
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 »Schedule a demo
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