Senior Care Market Peak and Bottom

by | Nov 18, 2015 8:33 am | 60 Seconds, Opinion

The private market valuation may have peaked, but the public market may have seen its low. As you know, I have been vocal about the acquisition market being at a peak for most of this year, at least when it comes to pricing. It just seems hard to imagine cap rates declining further with a rate hike looking like a reality….at least, according to consensus thinking. But the public markets are a different story. It has been a real roller coaster, but mostly down. But, and this is a big but, the downward spiral was so bad we just may have hit bottom. And November 13 is looking like the bottom, at least for now. On the provider side, both Kindred Healthcare and Genesis Health hit new lows on... Read More »

The Senior Care Pricing Disconnect

by | Nov 11, 2015 8:32 am | 60 Seconds, Opinion

The public equity market for senior care operating companies and REITs is getting slammed, but the private investment market remains strong. The pricing disconnect continues. Public equity investors continue to slam the senior care operating companies and health care REITs. All one has to do is look at what has happened to Kindred Healthcare and Genesis Health this past week or two, when both companies dropped to new lows and have not yet recovered. Fears of reimbursement pressure, fears of OIG investigations, fears of staffing costs. All have some degree of merit, but it seems like an overreaction to me. Just look at the private market, where both acquisition pricing and demand remain... Read More »

Welltower builds up

by | Nov 4, 2015 8:49 am | Acquisitions

When Welltower announced its Q3:15 earnings, they revealed a host of seniors housing transactions closed in that period, totaling $361 million in investments. The largest purchase was for three seniors housing properties in Colorado (2) and Utah (1), with a combined 461 units. Welltower paid $155 million, or $336,200 per unit, for the properties, which are all managed by the company’s new operating partner, Leasure Care. There is a new master lease with a corporate guarantee, 6.0% initial yield and 3.0% annual escalators. The properties are expected to have a 1.1x stabilized lease coverage ratio after management fee. For the other third quarter acquisitions, prices ranged from $15 million... Read More »

Senior Care Market In Confused State

by | Aug 12, 2015 8:34 am | 60 Seconds, Opinion

Stocks are gyrating wildly, sometimes for good reason and other times not so much. Okay, I have to admit that I am confused now. When Brookdale came out with poor second quarter results, its stock tanked, as it should have. But then Capital Senior Living came out with a very upbeat quarter, and its stock jumped 10%, as it should have, but then dropped by 15% over the next several days, for little reason, other than perhaps in sympathy with Brookdale shareholders. Genesis Health announced a good quarter, and its stock jumped by 10%, as it should have, and kept on rising to a 26% gain in a week when the market as a whole tanked. Hell, it didn’t even budge when China devalued its currency. ... Read More »

The largest just got larger

by | Jun 17, 2015 8:49 am | Acquisitions

The largest provider of skilled nursing in the country, Genesis HealthCare, increased its facility ownership to 23% of its inpatient sites with the acquisition of 24 skilled nursing facilities with 3,056 total beds for $240 million, or $78,500 per bed. The facilities, owned by Revera, Inc. and generating approximately $280 million in 2014 revenue, are located in New Jersey (8), Vermont (5), Washington (3), Connecticut (2), Massachusetts (2) and one each in Maryland, Virginia, New Hampshire and Rhode Island. Under the agreement, Genesis will acquire the real estate of 20 of the 24 facilities, and will enter into long-term lease agreements with Health Care REIT for the remaining four. In the... Read More »