When a Deal Is Not a Sale
Kindred Healthcare (NYSE: KND) and Ventas (NYSE: VTR) have agreed on a plan that allows Kindred to exit the skilled nursing business, or at least mostly. Of the 90 or so SNFs that Kindred still operates, Ventas owns 36 of them and leases them to Kindred. The two companies have agreed that Kindred can purchase the 36 properties for $700 million (current rent is $49 million), or renew the current lease on all unpurchased SNFs through 2015 at the current rent level. If they all get purchased (and then re-sold at different prices) for $700 million, that would come to $160,000 per bed, which strikes us as above market for the Kindred SNFs. Most likely, the price represents a premium that KND... Read More »
Kindred Healthcare Plunges
Exiting the SNF business, Kindred’s decision is just part of a national transformation of the sector that started a year ago. And I thought last week was a tough one. When Kindred Healthcare released its third quarter earnings on Monday night, I knew it would open significantly down, but 33% down? The company has decided to exit the skilled nursing sector – sound familiar? This was a bit surprising because even though they had already gone from 300 SNFs to around 92 today, I assumed the remaining facilities were the best ones, and in the markets close to its LTACs, rehab hospitals and home health services. That was the entire theory around being the post-acute provider of choice in... Read More »
Have We Finally Bottomed Out?
With senior care stocks plunging in recent weeks, it appears we may have finally bottomed out with a significant rally on January 14. I am sure many of you were watching in despair as senior care stocks have been plummeting since the beginning of the year. It was not rational, it had little to do with core value, it had little to do with current operating performance, and it really did feed on itself. And, seniors housing and care stocks get thrown in the “health care” bucket at mutual funds and other institutional investors, so if they decide to lower their holdings in health care, for whatever reason, the senior care baby gets thrown out with the healthcare bathwater. But hundreds of... Read More »Senior Care Prospects Dimming With Investors
Investors are selling senior care stocks, and perhaps because occupancy is in a rut with increasing construction starts. So, what are we to make of the dismal start of the New Year? Investors have hammered away at senior care stocks, and it has been ugly. On Monday, Brookdale Senior Living, Capital Senior Living, Genesis Healthcare and Kindred Healthcare all hit new lows. Who would have thought? Is it a sector problem with investors, or are they nervous about the near-term future? Last week NIC MAP released its fourth quarter occupancy numbers, and while some analysts saw the positive side of a slight sequential increase in overall seniors housing occupancy, the reality is that it is still... Read More »Schedule a demo
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