• Seniors Housing M&A Market Comes to Life

    Welltower’s recent announcement of two portfolio sales at low cap rates during the pandemic bodes well for the market. It has been a quiet past few weeks in the seniors housing M&A market. Last week was the first time we can remember when we have gone an entire week without one announced acquisition. That leaves us worried as to the... Read More »
  • Newmark Knight Frank Handles Welltower’s $1.3 Billion Sale

    There were rumors circulating last month of a major portfolio sale by one of the healthcare REITs, and given the dearth of deals in May, we clung on to the promise of it. Well, on June 1, Welltower announced not one, but two large seniors housing portfolio dispositions, along with a major medical office building sale, all combined for a roughly... Read More »
  • Two REITs Provide COVID and Census Updates

    Welltower recently disclosed what has been happening at its large seniors housing operating portfolio (SHOP), and we again give them credit for being transparent with investors as to the operating performance of its customers. In the second quarter through May 29, its SHOP portfolio has seen occupancy decline by 420 basis points. That’s the... Read More »
  • May’s M&A Meltdown

    The M&A statistics are in for May, and it was a doozy. Only 19 seniors housing and skilled nursing deals were publicly announced during the month, nearly half of which coming from the first quarter earnings reports of several public companies. Without those, we would have barely made it to double digits. You have to go back to July 2017 for... Read More »
  • Blueprint Closes Another LTC Properties Sale

    After representing LTC Properties in its five-phase sale of a 2,500-bed skilled nursing portfolio, Blueprint Healthcare Real Estate Advisors went back to the well, handling LTC Properties and Senior Lifestyle Corp.’s sale of two large seniors housing campuses in Arizona. The deal closed on April 21, with Humair Sabir, Amy Sitzman and Jacob Gehl... Read More »
Five Star Not Shining

Five Star Not Shining

Hindsight is usually 20-20, and in the case of Five Star Senior Living, looking back two years, the company should have accepted the offer from Gemini Properties and the Thomas brothers of Senior Star, who offered to pay $325 million for 33 owned Five Star communities. They had already accumulated more than 6% of the company’s stock, an investment they most likely regret. But management, and really the then-controlling shareholder, the late Barry Portnoy, wanted nothing of it. In fact, Mr. Portnoy announced a tender offer to buy 10 million shares of Five Star at $3.00 per share to enhance his controlling position. That’s an investment where his estate would like a re-do. The Gemini/Senior... Read More »
Five Star and Senior Star… Again

Five Star and Senior Star… Again

Oh boy, here we go again. Bill and Bob Thomas have sent another letter to shareholders of Five Star Quality Care, of which they own about 3.4 million shares, or 6.8% of the company. As shareholders, they are glad that management realized that they had some valuable assets, the full value of which is not reflected in the share value. It rarely is. But, as we pointed out a few months ago when Five Star sold a few assets for a big price, and a big gain, with seven properties worth more than the market cap of the entire company, they are also subjecting themselves to a big lease payment liability, which will cut into cash flow. As shareholders, this is not making the Thomas brothers happy.... Read More »

Senior Star’s Five Star move

The Thomas Twins of Senior Star certainly had the right idea. Remember, they proposed buying all the owned properties of Five Star Senior Living for about $325 million, which we always assumed was an opening offer. Five Star has now agreed to sell just seven of its assisted living communities with 545 units to its REIT big brother, Senior Housing Properties Trust, in a sale/leaseback transaction. The price of $112.4 million comes to $206,200 per unit, and using that value (which we believe is high for the entire owned portfolio) on the remaining 26 owned properties with 2,666 units results in an additional $549 million in value. Five Star’s market cap, even after the nearly 40% jump in its... Read More »

Five Star Says No Deal

As expected, Five Star Quality Care has rejected the offer by an affiliate of Senior Star to purchase the 33 owned senior living communities for $325 million. Basically, the board said the assets are not for sale, and that the company could improve the value of the shares by improving earnings. Unfortunately, just improving earnings does not result in a higher stock value in this market. Just ask management at Capital Senior Living. So if someone will offer more for the owned real estate than what the entire company is worth, based on its current stock price, what would someone pay for the owned real estate and the operating company? That may be a question that Bill and Bob Thomas may try... Read More »

Seniors Housing Companies on the Defensive

Oh, what an end of the year. With just three publicly traded seniors housing companies, all three are under some sort of pressure to do something to increase shareholder value. First it was Brookdale Senior Living, then Capital Senior Living and now Five Star Quality Care. The owners of Senior Star have made an unsolicited offer to buy Five Star’s 33 owned communities with more than 3,100 units, with assisted living and memory care representing just over 75% of the total units and independent living the remainder. At a price of $325 million, or just over $100,000 per unit, the value to shareholders comes to more than $5.00 per share net of some mortgage debt. Five Star currently trades... Read More »