Loading...
Docoh

LTC Properties (LTC)

Participants
Wendy Simpson Chief Executive Officer
Pam Kessler Chief Financial Officer
Clint Malin Chief Investment Officer
Rich Anderson Mizuho Securities
Chad Vanacore Stifel Nicolaus
Daniel Bernstein Capital One
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

Good day, and welcome to LTC's 2018 Third Quarter Investor Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Wendy Simpson, Chairman, CEO and President. ahead. go Please

Wendy Simpson

Welcome Operator. Thank everybody. you,

Joining me Clint our and Pam our are Chief Kessler, Malin, Investment CFO, today Officer.

of and As questions begin always, our finish will discussion with Pam some portfolio, and introductory financial I'll begin operator wrap-up the answers. follow call recent activity a with performance. commentary brief will the provide Clint with and remarks, our on results, I'll the we before

sold growth. and innovative These the operators transactions financing of for steady path, while to were after. working quarter recycling a with to sold We portfolio offer of strengthening capital executing prospective flexible investments three during and two properties, recently on a represent optimize evaluating are Most just we solutions sustainable and two existing continually and closely one our portfolio. and our which long-term made

strategically We the positively are can believe a making will identify impact few are assets risk we decisions years come. focused into LTC mitigate opportunities selectively and capital to our where clear, to we that we for To the be better continuing sale and on portfolio for within future. recycle in

and until are, one it I've to ability we As and the strategic for LTC is the that for we wait fortitude partners. is has and because true to find our who the both deal core said remains before right shareholders our

for inactivity. patience our mistake not should you However,

to to help capital new and are we off table. who proactive managing structures who regional have focusing future in building our financing source bring been to multiple a partners have relationships deals assets excited operating We attract solutions will innovative can and the existing market to offer financing provider, expanding on

two brief with a current update provide our starting of I'll Now, on operators Anthem.

rent with contact line are to showing in continue regular with pay to meeting their in progress. they expectations our XXXX are goals. They and are ensure We Anthem

Murrieta them XXXX. XX% and and are steady residents community May, Oak occupancy continue. the Glenview an occupancy Lawn, as budgets down reviewing is in seeing slightly, process Ridge admitting XX%. Anthem's began solid for Burr Park's occupied expectations XX% Tinley respectively. are activities standpoint, From setting with lease-up at is XX% and at increased occupancies around We rent are in but late gains is currently with which of holding

We continue monitor to closely will progress. Anthem's

now lease-up total Unfortunately, remained rent properties has $X.X deferred at and Thrive our would flat assumptions exhausted year call Thrive, announced second stabilization we materialized. last longer Moving to of towards the anticipated the quarter. the yet occupancy the had modest through not deferred runway has half Thrive provide last under relatively rent and million has since of that we a the

the to meet to with which We and from are with their they understand combined working portfolio obligations cash currently will extent flow contractual guarantors. Thrive corporate to be rent XXXX the able

similar demonstrated outcome our have focus our be shareholders. the situations, we on for As will generating in best possible

comments, Pam's financing to-date FFO or guidance guidance. I'd like transactions assumes Before activity but to or XXXX no investment asset our the and which related will shortly. discuss an $X.XX between Pam lease the includes per income share, be for XXXX have closed includes This sales to $X.XX expected incentive, issuances. additional that which write-off equity all related $X.XX is provide now to non-recurring Pam? liability and an earn-out of

Pam Kessler

acquisitions, from by balance funded partially call. higher offset higher from Interest income of related Wendy. administrative amounts mortgage due acquisitions two outstanding centers offset the lower quarter. sale payments income to This is rental decreased quarter. increased more third related from compared compensation. $XX.X primarily shareholders Net interest on credit balances $XXX,XXX you, last mortgage Revenues the later Anthem the in detail rent the gain $X.X provide from million due income same year from based unsecured million amounts change in $XXX,XXX partially resulting lease our increased Alabama notes. year to and by performance to common and to interest and of last General a to principal default. $X.XX The to Anthem Thank loans, to $XXX,XXX our skilled debt to Clint due quarter. in average the in third non-recurring due nursing Last will in primarily and line prior FFO increased year's primarily resulting NAREIT year. reduced properties expense scheduled increased sold, were in the $X.XX loans. income with was available prior incentive period on under and expense to the related senior

G&A to million We for million range fourth $X.X expect to be $X.X in the quarter. the

to closed of equity. JV on our second addition quarter contributed estate independent million partner we $X.X Oregon our in properties cash an of acquisition joint for two living discussed Alabama, a in the $XX.X to LTC that in detail of of community million sale $XX.X the Clint million and In contributed real venture call.

liability quarter on million. the quarter, a loan. for end committed improvements center origination in which to nursing will net income in the in memory off from million remove the lease an another community certain X.X%. of In the sold Colorado. contingent pay-off one-time talk agreed of $X incentive asset, mezzanine of provision yield and lease received and of this $X result in will center million earn-out Michigan under added quarter, to bringing $X.XX a line During another later. nursing more the related $X.X earn-out write million the skilled and included and the XX, will Subsequent one mezzanine In $X funding we Clint existing as an the to loan of we a sell master incremental skilled We Accordingly the recognition total Subsequent a fund borrowed we or amended at credit. to about under the gave Florida million outstanding per fourth we million. transaction pay-down $XX.X $X.X our loan security conditions we is Again also earlier. million quarter, in to share, in in to guidance third the which $XXX $XX upon an mortgage we Wendy to the line million capital repaid quarter, for September care on

third downs funded principal we the million in our share scheduled senior unsecured LTC's on pay $XX dividend quarter, per paid $X.XX during monthly and Additionally, notes.

with We development $X.X $XX.X. loans. under projects development we also commitments funded million two owned under commitments September million three under existing and improvement mortgage capital XX, totaling for under $X.X properties and renovation remaining and At

million located million under remaining also for commitment. loans remaining mortgage on expansions renovations preferred commitments equity Michigan and have We in properties $X.X $XX.X under eight in and a

ability future growth strong remains current provides and with the to Our fund us and sheet initiatives. balance

our million $XX our program. and our shelf that million have agreement provides of line liquidity. We $XXX under available Prudential million million of under with $XXX In total ATM $XXX credit, under

Our to strategic plan maintain and and conservative capital philosophy we philosophy going forward. allocation served us this has well

profile value debt XX%. our X.X we long-term credit of about annualized of maturities projected adjusted long-term the with remains remained over charge industry to the next ratio refinancing helping debt cash At risk, flow, annualized enterprise times, quarter, matched average years. healthcare of a and times EBITDA no X.X to REIT to our five to the of and fixed well debt maturity free Our well and have adjusted debt coverage significant to metrics to matched moderate the third future end

over hand to things Now, to Clint. I'd like

Clint Malin

Thanks, Pam.

quarter under health new million not subsequent deals and they third Although and asset changes completed long-term portfolio. we in completed for investments. the I'll just we deals to separate $XX were two ability demonstrate have of stability willingness make this closed quarter in our large, were including positive discussing completed our the three the and which transactions. the we start by the sales, Year-to-date

not and the not Consistent commenced grown are in with since Our capital that strategy, in these choosing XXXXs circumstances opportunity. to we relationships operators with have where early growth see two these or our involved potential recycle we transactions in do time.

transaction The lease sale for comprising two the whose was of sold older back included skilled in a the year. to XXX which operator Alabama this expiration nursing of later centers we beds total scheduled first

growth combined center Jacksonville, for located that transactions in respectively. these properties Total included approximately of These older The from GAAP second subsequent $X.X was sales combined Florida million. values net is against The rents sold book were are $X.X skilled annualized were to million guidance. end million $XX.X transaction the and to quarter. proceeds an $XX.X XX-bed leasee the the million of in the FFO nursing and Wendy's

the million total the gross Jacksonville we quarter is quarter of sale. Our transactions approximately selling with we anticipate the the is care million and on which and on two properties resulting which contract sold sale our will million. are million is third being gain Year-to-date, mentioned, $XX of We by these $XX.X gain in recognize book three Pam million $XX.X we from to net in nearly of broker. sale $X.X recognized the have a a third additional related value memory of under $XX.X and fourth marketed million, $XX.X portfolio, of in which a combined in properties proceeds community

as additional in expirations. with we they assisted quarter, Last upcoming emerge. details California will two provide communities We discussed lease living

agreement expect an We have agreement signed to by communities a another the of operator are our portfolio within end nearing year. lease this to and to these two

our times our EBITDAR the and was skilled portfolio. nursing numbers. X% flat quarter. times, assisted assisted and with X.XX Coverage relatively QX compared X.XX our discuss trailing respectively, management a I'll portfolio times X.XX using and skilled portfolio fee living was for for and portfolios respectively, nursing Next X.XX EBITDARM XX-month coverage on times, last and living

operating of October the gain SNF are scheduled to the our We their into engage and model coverage partners for PDPM preparation monitor implementation of continuing XXXX. reimbursement to insight in

for hand Wendy to the call I'll back wrap-up. Now, a

Wendy Simpson

and Pam you, Clint. Thank

stringent variety perspective. from up have both underwriting and not property While potential to our we they seeing are a been standards, deals, a pricing of

is are we estate demographic occurs. when in a capitalized, structures upturn variety meet financing and starts LTC cycles point to to of supply. not when ready real advantage turning this is poised offering it However, for for current well best of take the demand but believe significant only

years believe true executing company nurturing remain As and long-term sensible are and the growth. that for LTC its a to to We is cultivating a sustainable we've positions philosophy and and our supportive relationships the we today, operators on strategy partner a business shareholders. discussed staying to will to you a The culture we We're our drive best steward we Thank us ready of balance continue as for capital transparency sheet a strong long for come value we shared joining housing questions. allow to supportive seniors to for and again term us your provider trust have in success. to today. built remain

Operator

answer from We question Rich Instructions] [Operator Anderson now first ahead. the Mizuho go and Securities. of The session. begin Please question will comes

Rich Anderson

heavily to what ask mind with on I skilled you fun feel and REIT of you hours senior over Three three for you the so in guys at for Sabra, REIT Thanks. weighing Good of analyst question morning. exposure more. today, The about nursing is of how a back light people's calls think housing care to about say that's Can back in situation you talk as that what operator happened coverage senior can it? your terms

Clint Malin

morning. of aware No, by Rich. I'm the operators They provided is fall Clint. haven't sort mid-pack coverage in us. Obviously situation. for specifically. Good the This we of

taxes obviously been something information Wendy we last So to obviously actively do in they're and security engaged they where Orange yesterday better new the corporate we're in maintenance week deposits. the as with level far and met as challenges they're limited and it's we group lease announced we're to probably well. enhancement credit ownership but understanding a what have so try get We can they have with provide a lot leadership monitoring. and them, at hold have But a we with County actively you distraction to company, that in fortunate, parent I were have of with repair for us. of definitely have engaged as reserve deposits coverage, where

Wendy Simpson

properties talked also out -- they Texas interest our to any. operators some to them in reached become other since public have of should information, this these has in to We've we've their about

not in are in to anything our relative they today, speak we lease. default As

the long-term of probably significant they top default we'll be a assets. because situation solution would I So should right think may with we at on on them with little and a quicker cooperating they don't we problems the it these have take are anything answer is a than this point, if Sabra for that action totally

Rich Anderson

Right.

you little qualifier metrics So you said, you of did is -- it coverage - what in I your specific but operator don't I give kind or averages that what if a Is repeat? Clint, are, what range of I that you miss, could you did maybe gave said missed you there. the

Clint Malin

fair. fair. That's That's No.

Wendy Simpson

they're… that Yes. It's not

Rich Anderson

you. Got

Wendy Simpson

only not They're one. Yes.

Rich Anderson

Got evolved? Care that Preferred you. give any then Okay. And could you has how update maybe on situation and

Clint Malin

Sure.

a the progress. Preferred that lot re-leasing I they a yesterday buildings making more of They've Omega's in on buildings or call of is nine completed Care transfer. November few I saw think sale X. to

So in the expect communication the this had at my this I sometime Care, I would would at on they're we've mean, point? be based to guess looking probably with first point, Preferred emerge, quarter

Rich Anderson

Okay. perhaps structure RIDEA in Wendy, of have housing for that now managed amount disproportionate the their or Last movement had senior REITs in question seems whole a least structure at lately. direction to least activity at the the is most going of

whistle But little the on on you're be to you're trying structure that it is know structuring your about line a held full operating there with I to a have JV RIDEA. guys You bit? creative. that around whet and starting is anything

Wendy Simpson

don't structure. operators RIDEA like We've who the to No. several talked significant

the So still of groups business, a healthcare that REITs large the RIDEA. fragmented our though there a do of even there's operators REITs, to want lot are target have that market done don't this is in out lot

Rich Anderson

Okay. Fair enough. for That's you. Thank all Good call. me.

Wendy Simpson

from Thanks, Stifel. Chris. Operator: Please comes Chad next The of go Vanacore ahead. question

Chad Vanacore

Thanks.

you that gain out relatively one-time So back at that flat about guidance, right? a is your implies XQ; just looking could that

Wendy Simpson

correct. That's

Chad Vanacore

Okay. further just had of outside have Thrive any And the restructuring with potentially comments, about tenants then you leases. discussions

landlords they've Anything going with and we and got Brookdale, other bankruptcy Genesis there? think preferred about gone is restructuring care major through should through You the process. then

Clint Malin

where the of those think significant other really of is that. mean their been and outside coverage portfolio had on for this specific I a that Clint. Chad, our necessity lot based - not operators We've discussions conversations, I facilitated those

circumstances done the or So, discussed have Anthem so Thrive we extent to as such our we've on calls.

- the right those points now for right focal us are that's two So, now.

Wendy Simpson

offered But - we and the the that the restructure selling at Colorado taking to they out. gave we look did lease up We property. earn-out we're

restructured have leases, but… So, we

Clint Malin

rents. much, not modeling Chad; not but a of not restructure based But from standpoint, on modification

Wendy Simpson

Right.

Clint Malin

in of Other assets. selling case the than

Chad Vanacore

I'd we that about in anything of coverage terms -- your there Is would that or either skew way say care another? SNIP right. All AL/memory your should one or would think coverage coverage that

Clint Malin

It occupancy continues to from There's labor pressure standpoint. and evolve quarter-by-quarter.

that are dealing So, through. our with a that's course normal and working operators we're

some for lumpiness. some Skilled see in could could uptick having seen on increase have We side. changes, so, quarter occupancy New be in the some we coverage talked increase we've large October in about lumpiness this there AL Obviously, side, Medicaid a rate last any year Medicare, in or don't the but see occupancy. Mexico. I

Chad Vanacore

right. All I appreciate that. Thanks.

Clint Malin

Thank you.

Wendy Simpson

Thanks.

Operator

ahead. comes [Operator Daniel Please Instructions] from Bernstein The go of next question One. Capital

Daniel Bernstein

Good Hi. morning.

Wendy Simpson

Good morning.

Daniel Bernstein

it's more Clint \ those a if great there you that. them really just at doing maybe - have it's maybe questions. properties question, us I problem Malin something to something trying with That's the or if want I Dan. some it or to fixable just drive to market Thank some understand care? assets A a One, issues I go trying for is to back understand there Is environment. am themselves or only that two intensive Thrive.

assessing at working operator year is we're look Since they markets. occupancy. at XX%. we say There not XX%. of it the of were Right been October flat. on January traction the actively has they or relatively They've of been this And lot now a on occupancy. Let's as were

have but operator make new market So, the competition we've trying more to some is or them building it been others. these with engaged assessment very relatively all the that of and than are areas

operator. to what that's trying right So market now we're assess or

Daniel Bernstein

want whether those incremental really Have has - just that getting haven't asset fit been opportunities of I as last it there your put Okay. money Wendy - off comment you quality you that closer your from or change to coverage rate investment would your comments guess to Fair criteria. comments you what any to opening to made a then, enough. you go has opportunities back towards better not seen want that into And that's you view? from I - changed your or much point is close or the

Wendy Simpson

at even relative see but we're our us, prices moment. down. has getting to changed right small I looking are a spreads see return spending - the much coming to that to some provide that don't level decent We Not deals the at million, $XX some or that the

Daniel Bernstein

Coming little have better from out lease seen people we that, or coverage getting nursing for of Nick, heard you or hearing was that a some skilled that - just deals, bit I is random items? am

Clint Malin

Dennis, it's Clint.

of on think general are coverage think I because to kind comment in that it I PDPM kind looking looking the that perspective my in from people future. positive either and of viewpoint in of seems forward that

on sort So going point, the forward was of model. predicated new Nick, from that more my vantage from under reimbursement

Daniel Bernstein

All Thank you. color. the right. appreciate I Okay.

Operator

concludes conference to back would session. like our over for I management any question This to and answer turn remarks. closing the

Wendy Simpson

know see Thank day in today. a day. Mavericks. San I everybody very taking you. some appreciate Have and time you you, for the busy great I a we'll it's maybe Francisco at of

Operator

conference now presentation. attending you today's The concluded. has Thank for

now disconnect. may You