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CareTrust CEO: Senior Housing Makes Up ‘Huge Majority’ of 32 Outgoing Belongings

Actual property funding belief CareTrust (Nasdaq: CTRE) has outlined 32 properties it marked on the market or repurposing — and…

By Staff , in Senior Living , at May 7, 2022

Actual property funding belief CareTrust (Nasdaq: CTRE) has outlined 32 properties it marked on the market or repurposing — and the “overwhelming majority” of them are senior housing, in response to the corporate’s prime govt.

“We have now a portfolio of expert nursing amenities that we’re promoting, after which the remainder are all senior housing,” CEO David Sedgwick stated throughout Friday’s first-quarter earnings name with buyers and analysts.

Since asserting the transfer in February, CareTrust has already signed leases with a behavioral well being supplier to transform three assisted dwelling communities into substance dependancy restoration facilities. Assuming all goes in response to plan, redevelopment work ought to kick off this summer season.

One other 27 belongings are in early levels of being bought, with curiosity within the properties “in step with our expectations,” Sedgwick stated. The REIT may additionally “determine to retain and re-tenant choose amenities as a substitute of promoting them,” he added.

Sedgwick stated he believes there may be nonetheless some hire left to gather within the portfolio, although he added it’s too early to say how a lot.

Among the many firm’s 226 belongings, 160 are expert nursing amenities, whereas 41 are senior housing and one other 25 are “multi-service campuses.” Wanting forward, Sedgwick famous that the REIT “will proceed to put money into, develop with, and help senior housing operators together with expert nursing.”

“We’ve by no means had a goal combine in thoughts for the corporate between expert nursing amenities or senior housing,” he informed Senior Housing Information. “The combination could fluctuate yr to yr relying on funding alternatives.”

The REIT’s senior housing occupancy elevated 100 foundation factors to 77% occupancy within the first quarter of 2022, in comparison with pre-pandemic occupancy ranges of 84% and a low of 75% final November.

Within the first quarter, CareTrust reported a web lack of $43.3 million and a web loss per share of $0.45. Though “senior housing belongings proceed to flood the market,” Chief Funding Officer Mark Lamb famous the belongings had been non-stable and non-strategic that don’t match right into a triple web construction.

“The mergers and acquisitions market continues to be a combined bag for expert nursing and seniors housing belongings,” Lamb stated.

Frequent headwinds from labor to inflation will power extra under-capitalized operators to deliver properties to market, Lamb added.

General, rental revenue decreased $3.1 million within the first quarter. The REIT additionally recorded a $59.7 million impairment cost based mostly on the anticipated web proceeds from the gross sales of the 27 belongings.

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