QCP vs. HCRMC Heats Up
Other than its increased share price, the news does not seem to be getting better with regard to the negotiations between Quality Care Properties (NYSE: QCP), HCR ManorCare and the various stakeholders. After making only a partial rent payment for June because of liquidity concerns, it looks like HCRMC has skipped the July payment in its entirety. The two sides have been trying to negotiate a deal, which seems to be the acquisition or merger of HCRMC into QCP, which would wipe out the burdensome lease payments. Our guess is that they just can’t over a few of the major sticking points, which include the Department of Justice investigation and the unfunded deferred compensation totaling more... Read More »
Brookdale and HCR ManorCare May Deal
Brookdale Senior Living is rumored to be in exclusive talks with a Chinese investor, and Carlyle Group may finally get out of its HCR ManorCare position. A new rumor was out yesterday that China-based Zhonghong Zhuoye Group was in exclusive negotiations with Brookdale Senior Living after making an offer to buy the company for $3.0 billion, apparently higher than other offers. The problem is that the current market cap is just $2.8 billion, so not much of a premium being offered. Apparently, Brookdale wants to be convinced that the U.S. Committee on Foreign Investment in the U.S. would approve the deal as non-threatening to national security. Really? State secrets on maintaining census and... Read More »
What Do The REITs Know?
When the Big Three healthcare REITs (Ventas, HCP and Welltower) largely divested their skilled nursing portfolios in the past few years, it prompted questions about the industry’s health. The exodus was kicked off in August 2015 by Ventas, which spun out most its skilled nursing/post-acute care portfolio into a separate REIT, Care Capital Properties (which just this month agreed to merge with Sabra Health Care REIT). Then, effective November 1, 2016, HCP followed suit, in a spin-off of its troubled HCR ManorCare assets (over 320 properties) into Quality Care Properties. Finally, after over a year of denying any such move, Welltower sold a 75% stake in 28 Genesis Healthcare-operated... Read More »
Quality Care Properties Getting Ready To Deal
Timing is everything. In the April issue of The SeniorCare Investor, we wrote about what the decline in financial performance at HCR ManorCare (HCRMC) from the 12-month period ending September 30, 2016 to the 12-month period ending December 31, 2016. Annualized EBITDAR dropped by $5.5 million which, although not a big number, was enough to cause fixed coverage to drop a little to 1.10x for the December 31 full-year period. At the property level, however, the coverage increased to 0.84x, a ratio that is still unacceptable and not sustainable. The company’s skilled nursing facilities are at 82.6% occupancy, which is also low for a company of its quality, and the 60 assisted living/memory... Read More »Schedule a demo
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