60 Seconds with Monroe: Are We Getting Too Big Again?
One of the consequences of the pandemic, one of many, is that the differentiation between the best operators and the not so good has been increasingly exposed. And of course, investors will seek out the best to manage their properties. But as this happens, the operators who are doing a good or even great job today will start to be spread too thin. Managing 20 communities is a lot different than 50, 100 or more. You can have the procedures and policies in place for 100 properties, but you do start to lose that personal touch, especially if the CEO is very hands on. With REITs and other investors doubling down on either their best operators, or finding others that they perceive to be top... Read More »
Are Cap Rates Set To Rise in 2024?
In a recent survey conducted by Cushman & Wakefield, 68% of respondents anticipate a sustained increase in capitalization rates over the next year, expressing concern over debt market liquidity, which is the primary worry for 51% of participants. The majority of respondents, 49%, are pursuing core-plus investment strategies, while 34% focus on opportunistic or distressed investments, expecting around $18 billion in sector-specific loan maturities within the next 24 months. Notably, 33% of participants are targeting need-driven segments, particularly assisted living. There’s a notable compression in basis point spreads between the going-in capitalization rate and terminal capitalization... Read More »
Sonida Senior Living Still Making Progress
As Col. Hannibal Smith of the A-Team was fond of saying, “I love it when a plan comes together.” For Sonida Senior Living, it has been a long struggle, and while it may be taking longer than management wanted, the plan is slowly coming together. Everything is moving in the right direction, with occupancy up 150 basis points year over year to 84.9% in the third quarter, higher than industry averages, resident revenue increased 12.6% year over year, adjusted EBITDA more than doubled in the third quarter compared with the year-ago quarter, and RevPOR increased by 11.7% year over year. October’s census increased by 40 basis points from September to over 86%. The third quarter also saw... Read More »
Massachusetts SNF Changes Hands and Purpose
Blueprint facilitated the sale of a skilled nursing facility in the Boston, Massachusetts area. The facility was constructed in 1960 and was well maintained. It comprises 53 beds across over 18,000 square feet. Kyle Hallion and Michael Segal of Blueprint handled this transaction, which closed within 60 days of the marketing launch. The ultimate buyer was a family owner/operator that intends to repurpose the property to multifamily. Read More »
Chartwell Retirement Residences Sees Census Soar
Canada-based Chartwell Retirement Residences has been seeing a resurgence of occupancy growth that seems to be above and beyond the normal third quarter increases that we have come to expect. The third quarter saw census increase by 210 basis points from the June average of 80.1%, but it grew by another 100 basis points in October to 83.2%. They expect to add another 100 basis points over the next two months. Not too shabby. If they keep it up, they may reach the 95% occupancy levels of Ventas’s Canadian operators. Leasing activity in 2023 to date is 18% higher than the company’s pre-pandemic levels. Occupancy is now 600 basis points above its recent low of 77.2% in April 2022. With... Read More »
Financing Secured for a Not-For-Profit Affordable Seniors Housing Community
Rockabill, a leading development partner and consultant to not-for-profit owners of affordable, support, and transitional housing, and the national commercial and multifamily mortgage banking company BWE, announced a refinancing of an affordable seniors housing community in Yonkers, New York. Monastery Manor comprises 147 one-bedroom units that are reserved for persons 62 years and older who earn no more than 50% of area median income. Residents contribute no more than 30% of their adjusted annual income toward rent. Financing for the project included a $16.9 million Fannie Mae loan and an extension of the property’s existing PILOT agreement with the Yonkers Industrial Development... Read More »
Is This The Time To Start A REIT?
As we know, healthcare REITs suffered during the pandemic, with share prices hitting lows in March 2020. It was a long battle to regain previous values and even longer to sort out the various tenant problems. Balance sheets have been cleaned up, tenants and properties have been replaced, but there are still many legacy problems. Is now a good time to start a REIT with a clean slate? Well, 1031 Crowdfunding thinks so. It has just launched Covenant Senior Housing REIT, which out of the gate has three assisted living/memory care properties with a value of $51.25 million. The communities are located in Oregon and California with an average 89.0% occupancy. They plan to buy cash-flowing... Read More »
Welltower And Chartwell Retirement Residences Swap Out Properties
Welltower and Chartwell Retirement Residences have agreed to wind-down their existing joint venture covering 39 communities in Canada. The joint venture, with equal ownership in the properties, began in 2012 with the interests of both parties strongly aligned. As part of the agreement, Chartwell will transfer its interest in 23 assets to Welltower while Welltower will transfer its interest in 16 properties plus C$97.2 million in cash. One additional community will continue to be co-owned by Chartwell and Welltower. The entire 40-community portfolio has 8,476 units, so these are relatively large communities with an average of 212 units each. When the transaction closes in the second... Read More »
CareTrust REIT Steadies For The Future
While it may not have been CareTrust REIT’s best quarter, there do not seem to be many problems with its tenants. The REIT collected 97.5% of contractual rent, up from 96.7% in the previous quarter. It helps when The Ensign Group is your major tenant. Lease coverage ratios are important when most of your business is triple net leases. For CareTrust, it is the envy of the industry. For the 12 months ended June 30, 2023 (REITs and their leases are always three months behind in reporting), CareTrust’s top 10 tenants had a combined EBITDARM coverage ratio of 2.87x, up from 2.71x for the previous 12-month period. And this excludes any use of HHS Relief Funds. Within this group, Ensign was tops... Read More »
Sabra: The Manager Really Does Matter
There were a lot of moving parts during 2023 at Sabra Health Care REIT with regard to its former Enlivant portfolio, owned in a joint venture with private equity firm TPG. After defaulting on its Fannie Mae debt and basically handing the keys over to Fannie for a majority of its Enlivant assets, Sabra still owned 11 Enlivant-managed communities outside of its TPG joint venture. These properties were transitioned to Inspirit Senior Living on July 6. In just three months, census in the portfolio increased by more than 230 basis points. We can’t wait to see where it will be this time next year. This has been a common theme of sorts: a new manager is brought in for underperforming... Read More »Schedule a demo
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