Should Diversicare Health Be Worth Double Its Current Price?
Although Diversicare Health and a few others may disagree, it is not always a bad thing to have an activist shareholder or two as investors in your company. They can keep you on your toes, force you to look at options to enhance value that you may not be considering, and their actions often result in publicity for an “undervalued” stock that may bring other shareholders in, which should help in driving the price up. Diversicare Health is a small company, with a stock market capitalization of around $70 million. It has been growing, but mostly with new leases which did not need much capital to acquire. That is good news, at least on the capital side. Currently, about 19% of the skilled... Read More »Seniors Housing Occupancy Weakens
NIC announced their second quarter occupancy and development trends, and unfortunately it was not pretty. After a first quarter which suffered from the ubiquitous flu season census declines, we had expected, at worst, a small sequential decline in the second quarter, but perhaps a small 10 to 20 basis point uptick, maybe even better. For majority assisted living in the top 31 MSAs, for those properties open for two years (stabilized properties) average occupancy dropped 50 basis points from the first quarter to 88.9%, but down 80 basis points from the year-ago quarter. Historically, the average second quarter sequential decline is 10 basis points, and the current 50 basis point drop was... Read More »Time To Move Forward
Activist shareholders can distract management from focusing on growth and cash flow, and maybe Brookdale and Capital Senior Living can move forward in peace. Don’t you just hate distractions. Andy Smith at Brookdale has had to deal with a bunch of activist shareholders for the past year while trying to right his ship. Larry Cohen of Capital Senior Living had his activist several years ago, who then went on his board and became aligned with management’s goals. In round two this year, he has come to agreement with another one, Lucas Advisors, known by some as the trust fund baby hedge fund. Capital has agreed to appoint a new independent Board member, consulting with Lucas on the... Read More »
Pensacola purchase
Following up on its $1.45 billion in total closings for 2015, HFF recently closed another sale. Representing the seller, a private San Diego-based owner/operator, Ryan Maconachy and Chad Lavender of HFF sold a 95-unit assisted living community (built in 1988) and an 84-unit memory care community (built in 1997 and 2006), both located in Pensacola, Florida. The two communities combined for 94% occupancy, but the AL was dragging slightly. The owner completed almost $1.3 million of capex since the beginning of 2014 at the MC community, and was in the middle of renovating the AL community. Capital Senior Living was the buyer and purchased the properties for $48 million, or $268,156 per unit,... Read More »Schedule a demo
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