Welltower’s Seniors Housing Portfolio Improves
Welltower’s seniors housing operating portfolio (SHOP) continued on its road to recovery in the first quarter of 2023, a quarter that historically has always had a difficult time. Same-community SHOP net operating income surged an impressive 23.4% year over year, as well as by 6% sequentially. This was helped by COVID going into remission and a mild flu season. Same-community SHOP occupancy (746 communities) increased by 240 basis points year over year, and by 10 basis points sequentially, to 79.4%. The year-over-year increase was less than what we expected, and we have to believe that Welltower management is still concerned about the overall level of occupancy at this point in the... Read More »
The Volatile Insurance Market
As the M&A market declined in activity from the heights of early-2022, we kept hearing that every deal was much harder to close and experienced more delays than in recent memory. The capital markets had a major impact on that, understandably, but another wrench thrown in many buyers’ M&A plans was the volatile (and pricey) insurance market for both the property’s real estate and operating business. There are plenty of reasons to explain the increase in insurance costs in the last year. First, rates had been dropping for about 15 years until around 2018/19 due to providers wanting to build scale, even if it meant taking losses to get there. Then, as Chip Stuart of HUB... Read More »
Omega Healthcare Investors’ Shares Surge
The good news seems to keep on coming. Omega Healthcare Investors released its first quarter 2023 results, and while the past was still problematic, the future is looking brighter. The REIT is the largest owner of skilled nursing facilities in the country, and its customers were particularly hard hit in the pandemic. It appears, however, that most of the restructurings and asset sales are behind them, even though there are a few significant ones ongoing. The positive attitude and look to the future sent the share price surging by nearly 10%. The recently announced rent and interest deferrals, and changes, include LaVie, Maplewood Senior Living, Agemo (which has resumed its $6.4 million... Read More »
Carnegie Capital Secures Bank Refinance
A regional owner/operator borrower engaged JD Stettin of Carnegie Capital to source a loan to pay off its maturing bridge acquisition debt on a portfolio of four skilled nursing facilities with 309 beds in southern Oklahoma. The current owner had been operating the assets for a number of years before exercising on a purchase option to buy them over two years ago. A HUD takeout was part of the plan, but the portfolio needed more time to stabilize. Portfolio-wide EBITDAR was near break-even prior to debt service, and state approval of the new Medicaid reimbursement rates wasn’t issued prior to closing the new loan. Carnegie sourced multiple term sheets from banks, credit unions,... Read More »
Upscale Seniors Housing in the News
As the recovery from the pandemic seems to be slowing (or stabilizing), we have always said that the more upscale communities would have a better go of it than the more middle market ones. Location seems to be more important than age, as well. We toured a large community in Stamford, Connecticut that opened last year, and another smaller one in Darien, Connecticut that opened more than 25 years ago. The former is operated by Epoch Senior Living and the latter by Atria Senior Living. We actually went to the Atria property for the open house 25 years ago when CareMatrix (Abe Gosman) built it. Both communities were very nice and doing very well but could not have been more different,... Read More »
Meridian Capital Group Releases Latest Activity
Meridian Capital Group’s Senior Housing and Healthcare Team has closed more than $515 million in transaction volume since mid-March for a combination of 33 facilities in seven states. That is a healthy chunk of all the lending that is getting done these days. The transactions were negotiated by Meridian’s Senior Housing and Healthcare Platform, led by Ari Adlerstein and Josh Simpson. Most notably, the team arranged $185 million in financing from a commercial bank and finance company to facilitate the acquisition of 13 skilled nursing facilities totaling 1,002 beds in West Virginia. Omega Healthcare Investors purchased four of the facilities and co-invested with a private family office on... Read More »
SLIB Announces Deals in Washington and West Virginia
Two teams at Senior Living Investment Brokerage announced deals this week, including one in Washington state and another in West Virginia. First, in Washington, Jason Punzel, Brad Goodsell, Vince Viverito and Jake Anderson sold a 54-unit assisted living community in the town of Shelton (on the Olympic peninsula). Built in 2000, it was previously owned by an investment group that was looking to divest its out-of-state assets. Occupancy was decent at 80%, but that could be improved. In the end, a Pacific Northwest owner/operator paid $4.9 million, or $90,700 per unit, for the community and plans to spend more on capital improvements and to increase the number of licensed beds. Next,... Read More »
Ohio AL Community Sells to Owner/Operator
An Ohio assisted living community that was formerly an elementary school sold to an in-state owner/operator thanks to Connor Doherty and Ryan Kelly of Blueprint Healthcare Real Estate Advisors. The duo represented the community’s original developer, which had taken over operational control of the community in 2018 after the previous operator declined their lease renewal. What an eventful several years of operating they signed up for. Built in 1920, the school was redeveloped into a 52-unit seniors housing community in 2007 and still features a gymnasium, plus the only sit-down restaurant in the town of Antwerp. Outsiders were allowed to dine there, except during the pandemic, of course.... Read More »
LTC Properties Reports First Quarter Results
We are still in the beginning stage of the first quarter earnings season with just a few companies in our sector reporting so far. LTC Properties reported first quarter results on April 27, with earnings slightly below expectations, but revenues above. LTC is one of the smallest REITs in our sector, but the only one that pays its dividends monthly, which we always considered a plus for investors. Like all of the REITs, some of their operators have had challenges during the pandemic keeping up with lease or mortgage payments, but there appears to be a flicker of light at the end of the tunnel. The good news for LTC is that they really have no significant debt maturities looming for the next... Read More »
CCRC in the Works in Los Angeles Area
Spieker Senior Development Partners broke ground on a major CCRC project in Woodland Hills, California, about 25 miles northwest of Los Angeles. Wisteria at Warner Center will feature six stories on 17 acres, with a total of 695 units, the vast majority of which would be reserved for independent living residents. In addition to the independent living, assisted living, memory care and skilled nursing services, the community will include over 1.1 million square feet of medical office space. Entrance fees will start in the $500,000s and surpass $1 million for the larger penthouses, which can reach nearly 3,000 square feet. KTGY designed the project, and W.E. O’Neil Construction is the... Read More »Schedule a demo
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