Investing in Assisted Living at a Market Peak
Is now the time to invest in assisted living, build new communities, or sell your inventory? Join me tomorrow as we dissect the current market. Okay, so you have now all seen Brookdale Senior Living’s share price plunge below $9.00 a share yesterday. It was not so much no news on the sale of the company, but that operations continue to deteriorate from a financial perspective. Costs are up, discount pricing seems prevalent, and while occupancy increased a bit, it was not enough to help. These are real problems, yet in the assisted living acquisition market, average prices remain at record levels. If it is getting worse out there, why are investors continuing to plow money into the sector?... Read More »
Brookdale’s Q3 Earnings Send Shares Plunging…Again
Brookdale Senior Living just can’t get a break. After its announcement with HCP that is beginning to clear the deck, it came out with its third quarter earnings Monday night, and the results sent the shares down $8.78 during the day, for a decline of 14.7% before recovering a bit. While the market had been focusing on occupancy, that was about the only area where the company had good news. Assisted living occupancy increased 30 basis points from the second quarter, which seems to be the industry average. Its retirement center occupancy also increased by 30 basis points sequentially. But operating income is declining and its assisted living operating margin plunged by 210 basis points... Read More »
Good News from Brookdale and Capital Senior Living
Finally, we have had some good news from the two largest publicly traded senior living companies, Brookdale Senior Living and Capital Senior Living. Let’s just say, it has been a long time coming. Capital Senior Living reported a sequential increase in occupancy of 30 basis points in the third quarter, an increase that was continuing to rise in September and into October, so the fourth quarter should be upbeat as well. In fact, from June to September same-community occupancy increased by 90 basis points. These numbers exclude their two communities impacted by Hurricane Harvey. On the negative side, labor costs increased by 4% in the third quarter, which contributed to a 2.4% decline in... Read More »
REITs Having Trouble With Seniors Housing
We have heard more about REITs and their skilled nursing troubles, but LTC Properties’ announcement a month ago has been followed by a much larger seniors housing problem at Ventas. At first, everyone thought it was the skilled nursing sector that was going to give the healthcare REITs heartburn. After all, that was the sector struggling the most, right? But seniors housing has not been as resilient as previously thought. Brookdale Senior Living has had its well-documented problems, and last month LTC Properties disclosed issues it was having with underperforming memory care tenants. Then we had last week’s disclosure by Ventas that it was moving more than 70 communities leased to... Read More »
Getting Brookdale Senior Living Wrong
As recently as two years ago, there were a lot of investors and analysts who were very positive on the prospects for Brookdale Senior Living. Rarely have so many people been so wrong. And these are smart people. Perhaps the most egregious analysis came from Glenview Capital Management just two years ago. How wrong can wrong be? In August of 2015, they listed six reasonsthat would drive Brookdale’s growth. One was that new demand is exceeding supply across the industry. Whoops. A second reason was “private negotiated rates,” not being aware that what was negotiated was discounts. Whoops again. And the one that made us scratch our heads was, “Senior living facilities are considered to be... Read More »Schedule a demo
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