The Gold Standard A Bit Tarnished
A scathing article from The Washington Post discloses quality problems at HCR ManorCare before its sale to Welltower and ProMedica Health System. For those of you who missed the Thanksgiving weekend article from the Washington Post about poor care at HCR ManorCare’s nursing facilities in Pennsylvania, well, why ruin a great weekend? All kidding aside, it did not portray HCR ManorCare in a very good light, citing numerous cases of poor care and lack of staffing. But I am not sure if they were attacking HCR ManorCare itself, or The Carlyle Group, which owned the company at the time and did the $6 billion sale/leaseback which financially strangled them. Granted, most of the events cited in... Read More »What Happened To Assisted Living Prices?
The results are in for our rolling four-quarter averages for assisted living, independent living and skilled nursing sales, and they may surprise you. Assisted living prices, on average, dropped 15% to just $177,600 per unit for the four quarters ended September 30, 2018. That follows six straight quarters with an average price above $208,000 per unit for the sector and represents the lowest level since the second quarter of 2014, when we recorded an average of $162,000 per unit. What happened to the assisted living sector, which has so far seen record levels of M&A activity? In the last 12 months, there not only have been a lower number of very high-priced deals (above $300,000 per... Read More »
Five Star Not Shining
Hindsight is usually 20-20, and in the case of Five Star Senior Living, looking back two years, the company should have accepted the offer from Gemini Properties and the Thomas brothers of Senior Star, who offered to pay $325 million for 33 owned Five Star communities. They had already accumulated more than 6% of the company’s stock, an investment they most likely regret. But management, and really the then-controlling shareholder, the late Barry Portnoy, wanted nothing of it. In fact, Mr. Portnoy announced a tender offer to buy 10 million shares of Five Star at $3.00 per share to enhance his controlling position. That’s an investment where his estate would like a re-do. The Gemini/Senior... Read More »
Are Assisted Living Prices Sustainable?
On November 15th, we hosted a webinar entitled “Are Assisted Living Prices Sustainable? Premium Prices for a Premium Product.” In it, our editor Steve Monroe and a panel of experts including Brad Clousing of Senior Living Investment Brokerage, Jacob Gehl of Blueprint Healthcare Real Estate Advisors, Adam Kaplan of Solera Senior Living and Jesse Marinko of Phoenix Senior Living, had a wide-ranging discussion on the state of the assisted living market today. Are current values sustainable as high as they are? How do you finance those high-cost transactions and get your desired returns? Is it actually cheaper to build rather than buy an existing community, especially when there’s the risk of... Read More »
Brookdale Senior Living and Transparency
How transparent are the activist shareholders about what would happen to Brookdale Senior Living if it followed through on their recommendations? Not very. After spending four years being critical of practically everything Brookdale did since the acquisition of Emeritus, the one thing I did not criticize the company for doing was not selling off its owned real estate. Brookdale investor Land & Buildings has been all over management to sell some assets or the entire company. Now, with a 3.7% stake in Brookdale, Macquarie Group has sent a letter to shareholders urging the same thing, claiming the stock is trading at 50% of its asset value. What these “activist” shareholders don’t... Read More »Schedule a demo
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