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LTC Properties (LTC)

Participants
Wendy Simpson Chief Executive Officer
Pam Kessler Chief Financial Officer
Clint Malin Chief Investment Officer
Chad Vanacore Stifel Nicolaus & Company
Michael Carroll RBC Capital Market
Daniel Bernstein Capital One
John Kim BMO Capital Markets
Todd Stender Wells Fargo Securities
Karin Ford MUFG Securities
Call transcript
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Operator

Good day, and welcome to the LTC Properties Fourth Quarter 2018 Analyst and Investor Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask your questions. [Operator Instructions] Before management begins its presentation, please know that today's comments, including the question-and-answer session, may include forward-looking statements, subject to risks and uncertainties that may cause actual results and events to differ materially. These risks and uncertainties are detailed in LTC Properties' filings with the Securities and Exchange Commission from time to time, including the Company's most recent 10-K dated December 31st, 2018. to or update of circumstances obligation to forward-looking this no events reflect after undertakes revise these or statements presentation. LTC the date this note, event being Please is recorded. Wendy to conference I turn now like over would to Simpson, CEO. the go Please ahead.

Wendy Simpson

year-end you, conference Thank call. investor LTC's Welcome to operator. XXXX

our portfolio, Operator deals inflated Investment The current Clint that and are least. interesting for cost and in to volumes however, point has, we who today sources Private for financing and between a see certain sellers Chief begin activity with in by disconnect then been a results, our in performance. the and will XXXX. call space The end recent to Pam us in is investment with and Pam, other in resulting turn start continuing I this massive brief discuss buyers. real mid Malin, starting answers. their interest and deal formation are see a we in beginning will start large has the the decline say our followed will their private will looking At the smaller opinion, me pricing our expectations. CFO; in to we estate influx cycle the of I we lower cycle, wrap-up Joining to the equity expect are opportunities pay to adjusting of Clint discuss before sellers with pricing, will to financial equity questions and who Kessler, private our Officer. introductory remarks over

created around are still in a remain believe shift a market. opportunities is private seeing more investing is pay. capture skilled moving slightly to in side, On a we lot opportunities investment we to there interested well-positioned of LTC favorable in by We more SNIPs, while the and capital

team we weathered very a before. leadership these long this in has have our time and transitions Fortunately, been business for

has a before, LTC being and succeeded no cycles, does repeat said mean provider estate cycle is capital real To many of different. being this patient patient by have course the Over stagnant. not being I something

be can improve pipeline creation, build we portfolio, our terms While we grow current QX where ours existing in regional are average our to with add strategic footprint. with age assets of geographic operating operators, tends to and continuing strong the new partners, our expand of slower

strengthening our maintaining and strong using our well-capitalized are managing We proactively a and balance time industry wisely, portfolio of sheet relationships. assets

structures, willingness We inside current of innovative provide operators, financing specific are are flexible operators' and and to tailored to both outside and structures our about them portfolio with that LTC's meeting educating needs. the

operate, make, to be on what them, sets will focus to overcome what Our be to us is this better the to We the allows how apart, is to they and believe ongoing what successful. focus us long-term allow drive able need decisions us opportunity and regional to challenges what us understand value. ready when growth they an they to allows and arises operators important to continue need

provide to in over operates which on Care turn Care and skilled current Senior brief Senior a Clint, three facilities XX start Anthem. will operators: for nursing and like I Centers, Thrive; I the call our Pam would of I Before us with to update Centers; Texas.

from As concern. have the they in know, ongoing ability as don't bankruptcy the you Care believe viable Senior we and a December declared process, emerge to

court It any assets with process in is new early subject potential are should to stewards, this with fiduciary is a lease very acting as operator the lease poised assumption and approval. master to still to different bankruptcy Texas with opportunity operator familiar a proactively these based good we and the ready we ensure, and negotiating act Given a are transaction new arise.

portfolio, Thrive which I care Next, our will assisted units communities. includes update across six and memory XXX an living provide on

million portfolio. which to their were As second discussed, deferred we provided believe in exhausted rent well in of quarter it in pay is rent the contractual before stabilize rent on the accrued did Thrive and so the they $X.X of paid projections and based able short of $XXX,XXX in December. of the we Thrive XXXX, November not we collectible, their properties XXXX. previously in lease-up was rent recorded We

deferred payment received of not we February the have We and rent or January rent provided. of

of we XXXX. rights and rent rent properties letter was no As $XX.X million. the Thrive book cash million these should I in in million other this sheet receivable in are million result, million lease our non-payment Thrive. a $X.X place. issued master XX. with be have to rents to starting we have on of assets under approving that inclusive certain straight-line Annual note a as net $X.X in the is GAAP in $X.X the would the pursue end the related the approximately December at guarantees deferred do our and options to rent we of anticipate $X.X and rent assets year, remain value longer approximately reservation quarter, Thrive, million balance the contractual We had of at We $X

properties negotiations some the all several the solution or or some to which are options new with the a We of properties, selling them combination through evaluating Thrive or could related these transitioning to ongoing finding of operators, portfolio, all of include some options.

have XXXX. We in addressed recently find the finish a where from where the turned done is we I approximately past, recently XXXX, resolution now rent for which we will similar successful believe Anthem Anthem our especially in shareholders. Anthem interest rent XX% the that in As to most with has recently challenges than in corner, they paid higher agreed us is of million the $X.X all best will Anthem. with parties, we I

We continue monitor actively improvements. ongoing to expected

and at these was Burr Oak down the Occupancy XXXX revisit nicely. flat stabilized. Ridge standpoint, will Lawn associated Tinley of fourth with levels Park property an rent quarter. occupancy in slightly. and grew We is appropriate properties Glenview was myriad the From

that ability new their We met XXXX are higher closely progress we XXXX But their commitment. will meet rent to commitment. continue to Anthem and watch their pleased their

I turn provide will Before XXXX. guidance our over to for Pam, I things

investment financing which expected Assuming a share Pam? basis. activity, be $X no full-year, Care to $X.XX asset FFO for between the the sales, issuances, reduction per for is cash or $X.XX and reflects on additional equity remaining Senior

Pam Kessler

This decrease of is GAAP Senior to Thank due of of non-payment to $X.X result one-time you, that filing. in rent lease as claims. earn-out lifestyle, $X.X the of a Wendy. of petition increased was on administrative bankruptcy December by the I XXXX contingent million our to resulting and result with related rent post the million call. partially a from last million $X subject Revenue $X.X over liability fourth which rent senior quarter unsecured claims discussed offset primarily of for the pertaining million, write-off lease income incentive have by master priority as million general cash the Care, $X.X prepetition their quarter's

Senior quarter. $X.XX Care, Excluding year's these increases decreases Senior as in offset Lifestyle of quarter-over-quarter, from compared by with sold. were was fourth flat last effects resulting $X.XX, to investments revenue NAREIT properties and FFO from

and to due lease lower related quarterly notes and year to sale from prior $XXX,XXX incentive and available higher associated the due earn-out million scheduled to from administrative $XXX,XXX debt expense compensation. fourth G&A quarter the decreased prior non-payment were last with described, the XXXX resulting to eliminated. year FFO on Excluding for the the bankruptcy per G&A liability December the earn-out one-time quarter. common of from the expenses, balances to Lifestyle. year, was the year's increased resulting of and Senior the Senior performance lease income of Lifestyle $X.XX related Care the based on rent principal change Senior that write-off $XX.X senior was Anthem payments The income related fourth General amounts with quarter, revenue shareholders offset reduced share Interest liability Last by interest Net primarily expense. interest to expense incentive the a from gain related increased elimination default. in our the the from to one-time XXXX expense the in and and just partially reduction $XXX,XXX contingent unsecured increased

through to than quarter We G&A resulting million based incentive compensation XXXX, be approximately $X.X million expect due performance per lower quarter projected per Thrive. or to lower XXXX, from about $X.X

capital value XXXX for an we million, was properties to for volume year sales a And investors nursing active a than gain recognizing, in in gross these recognizing XX XXXX. transactions, The $XX.X During typical, was sold separate related We although, a quarter Florida skilled three estate added recycling. of of communities million. a in one million centers book and million we invest million. net sale combined two The properties $X two in one and $XX.X skilled of centers, total four $X parcel annualized value assets used two $XX.X centers to and the a on sold real and nursing proceeds rent higher skilled were Georgia worth in our approximately a gross were of housing revenue housing of net GAAP nursing the gain $XX.X sold $XX.X combined book to that value related in in and million million had GAAP We million existing loan. net to of The senior book $XX.X million. million. $XX.X mortgage an million acquiring $XX.X properties development these land reduction and was and $X.X for senior was properties of combined had $XXX,XXX. one six two combined

million additional funded gross million completion $XX.X capital million of projects. $X.X $XXX.X commitments an $XX.X This XXXX. million, annualized annualized approximately projects improvement translates million development during revenue total $X.X investment also XXXX upon development of and $X.X the We in throughout of into and in million

range. LTC, more XXXX higher asset XXXX in than were typical historical expect sales for divestitures currently to be we normal a While

asset provided some have XX supplemental, on will our We you asset color of sales graph by a year. on of give historical which Page prior sales

fourth end be opportunities a shortly. credit repaid to line seller, the productive identifying We quarter recycle end discuss outstanding investment $X of strategic to the million. will the our subsequent will subsequent the $XXX.X activity quarter bringing million of assets. the line of and more borrowed fourth the million, quarter, continue total to into We on Clint capital to the our to on during $XX.X

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

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

under have million preferred we eight commitment. $XX.X equity a remaining related in commitments Michigan under remaining Additionally, mortgage on renovations to properties million expansions and of and loans $X

with growth initiatives. flexibility future fund and to substantial continued sheet balance and provide current Our us to capacity the

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

will strategy. always, capital employ to conservative continue As we a allocation

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

the call turn Clint. will I over Now, to

Clint Malin

by joint nearing acquisition the a previously I lease venture progress disclosed transition. Pam. Thanks, on a with will completion. I transition, start will lease start developments and sharing

relationship Fields Vacaville, master May a Senior lease on new and California, may of us Bakersfield at on under months by includes Fields State you Brookdale a is properties Until transition X. were by expire of Senior properties. commencement the a agreement purchase by anticipated the XXXX. for XXXX licensure to on which occur be issuance Fields new four offered We from XX option has communities leases an affiliate funds. Brookdale lease XX, The lease these is our recall, licensure complete, to rent Living is with Fields As from upon our effective both lease be master yield. signed California expected include provides a continue will with $X.X of for in the Living November leases due to The buildings $X GAAP to to operate to million. a and under is amendment. million the X% Once capital from obtained these commitment utilize will annualized

properties process life, see While of to to relationships, have if relationships and an lease in transition fact transition we opportunity the we are gaps maturities operator expire. the leverage them Fields. Bakersfield expand lease as a We as the doing can as meaningful Vacaville to built fill and necessary are quickly of we

one assisted closed acquisition closing. XX% X.X%. of The English a joint LTC opened Virginia Communities. with The unit completed an memory was real Meadows XXXX venture Living XX real that ago Meadows, we partner care interest disclosed, Meadows English operates Campus, has transaction subsequent by million Abingdon XX% Meadows across initial is quarter. of the We community years previously to XX the was is As operating founded the time and Senior for rate affiliate occupied of and estate venture. the estate a end living Community in is Abington $XX in in which joint at English new Virginia. operated a eight communities LTC. lease a English

under you progress of Now I development. the update would communities like on to

bed a by Kentucky and First, opened its County, project lease. Boonespring first care four nursing and property center development is operated of XXX of Boonespring, two accepted Boone is master a in part Carespring in a residents February. transitional early skilled

a Hamilton and to community care opening Senior living, anticipates in mid-April. independent memory Next The operated living assisted unit developed be project, Wisconsin is in our by project XXX Tealwood Living. that will House early

bill basis QX management living was fee portfolio Moving prepared Coverage of EBITDARM quarter into assisted longer X.XX respectively the and times over numbers previous has and we skilled increased Thrive for now nursing our trailing to portfolio been to skilled month because our in portfolio from driven to portfolio Thrive closely PDPM, patient not only mentioned, session bring provider Current industry in expected our times X.XX LTC has in would that impact one May session would as quarter. and Texas, payment positive a X.XX transition continues with EBITDAR change are a in Texas concludes in We in and the cover XX no our to by excluded relying to we respectively portfolio bill contractual tax positively the model the benefits the from times, have needed a and times on skilled operators using our passage we are expected the associated and long supported. as the of nursing Passage assisted coverage X proposed this reimbursement. relief for X.XX Wendy portfolio. such of be to pertaining current points Along living with in X% not while and rents Texas in portfolio. October. the positives Community in starting skilled is rolled monitoring skilled The legislative this XXXX. accruing are and remained numbers, Medicare optimistic. for-profit biennium Sentiment a guaranteed operators legislative it. many coverage bill cautiously

wrap I on to briefly our comment like would up, I pipeline. Before

year of this growth. mentioned terms generally Wendy in time pipeline slow As of is

add some remained a for However, private have our been stabilized, we are though that where smaller seeing pay down have come opportunities assets, recently, portfolio. opportunities prices bit. Even optimize on we select reported partners large and new some deals operating focused

growth quality, assets. newer and strategically maintaining operating identifying are on methodically focus oriented We our and partners

obviously transaction strong can't the creating year. pipeline we converting extended confident the cycles. transactions become probability pleased realistic that While still and assets, a are is buyers close, remains caution will predict that pricing to pricing now pay feel fully between we We when are a sellers their are to this willing starting but more on that do see have our to of gap what how gap we

I Now, to will back turn Wendy. things

Wendy Simpson

will several Pam you, believe and Thank year We provide Clint. this opportunities. growth

two benefit with Clint are and abate Our reimbursement SNIP portfolio and could interesting might cost picked opportunity XXXX slightly We will addressed construction changes into Thrive controlled. opportunities. increase. are Care up, that Senior has mentioned slow our and marketplace will properties at new with some starting challenges challenges significantly believe being equity Investment and and of to existing in headwinds future private down Broken result the of deals occupancy years. end new the

optimistic Thank remain us opportunistic again runs course. will its cycle joining We the and as you for today.

questions. are ready We for your now

Operator

[Operator session. go Chad comes and with the question Please begin We will Stifel. ahead. Our now first question answer Vanacore Instructions] from

Chad Vanacore

Good morning all.

of you and some about here. the primary range share pretty thinking timing there? of $X $X.XX, changes pieces assumptions just that the all So tight Can moving that guidance collections considering is and especially at

Wendy Simpson

is change rent. reducing primary the The Thrive Yes.

contractual year. that the So assumed we through of the $X Senior rent straight million have line. Care lower pays

Pam Kessler

to had reduce straight-line. we Yes,

reduced and increased We Anthem, -. have for for Thrive

Wendy Simpson

reduced And G&A.

Pam Kessler

And G&A. reduced

Wendy Simpson

Discussed on the call.

Chad Vanacore

just Okay. part, wrong? Senior present on mentioned Senior didn't I Care Care And the the you then that or guidance associated did with that in drag hear

Pam Kessler

No.

Wendy Simpson

they That for record XXXX Bankruptcy pay not December not because because it. did is is in did claim. correct, in we that XXXX rent

Chad Vanacore

Okay. about XXXX. that the first expect income in Got rents we there? flow should developments online new you of have then you. statement incremental And half coming got How just through thinking

Wendy Simpson

the Repeat sorry. question. I’m

Pam Kessler

coming developments the XXXX. guided supplemental. you [Indiscernible] in online have in The

Wendy Simpson

According Yes. of that give - modeling the we is Page to we rent. the that start supplemental. when X supplemental, [indiscernible]

Pam Kessler

date? as a rent the have rent We Yes. made conception

Chad Vanacore

In Alright. January and Xst? mid-quarter quarter rent a full getting Xst that get you starting April

Wendy Simpson

For you GAAP certificate purposes, accounting GAAP The to occupancy. yes. start of recording rent a at basis require on rules

So laid dates those the out. are we

and or property second Kentucky will Carespring for the year the property property far and be first quarter of fourth will the in Oregon Wisconsin be this So quarter. quarter in the

Clint Malin

And as on Chad as right the everything timelines. now far track, is development

Chad Vanacore

pushed things they these back. And Okay. Alright. get typically

counterintuitive. looking your XX trailing coverage sequentially despite supplemental. and month looks coverage me change? just declines what quarter is your It one that improved So, Can third impairment occupancy like behind you in that SNF is tell more, at

Clint Malin

that I did Michigan Part previously our in through. Sure. mix talked about that of payments about expecting that some was one quality Chad, this of and of operator indicator come actually

for end at of fiscal fiscal year the year. the entire applied that that prior for the amount So funded was the

have couple I about which that pop talked did last we large quarters. the operator, of So see a in one in

occupancy slightly you the go bit a why is So the and little up. saw one go seeing coverage down you reason that are why

Chad Vanacore

going go actually, last just Alright. one to And guidance back ahead. one -

Clint Malin

[indiscernible] QMI the going going well forward so going forward. to forward payment on paid monthly a as future is while going that basis into be this continue

Chad Vanacore

Okay.

not consistently an end payment. month-by-month? of it's So the of year [indiscernible] quality

Clint Malin

That is correct.

Chad Vanacore

Okay.

going dispositions? So new acquisitions to back that guidance, include or investments any did

Wendy Simpson

does No, not. it

Chad Vanacore

leave Okay. I Thanks. will Alright. it that.

Wendy Simpson

Thanks, Chad.

Operator

from with next RBC ahead. Please question Michael Carroll comes Our Capital Markets. go

Michael Carroll

Yes. Thanks.

Pam, Just rent, where correct? from $X assumed plus real you that $X they rent quick to on scheduled million the Thrive, you guess of million I is pay guidance numbers. of said

Pam Kessler

In to scheduled $X.X pay in XXXX million they - yes, XXXX. were

Michael Carroll

from to it So then like but then seems of Thrive, if all $X million that rate, $X.XX recovered. current are seems does the the you how lower so run math assuming off work it's only be

new So in for does G&A up that the investments reduction making and $X.XX shortfall?

Pam Kessler

GAAP So because the there particular so is actually the rent cash variable, this lease rate. was in and The on are cash than and this free are lease escalators not incentives, of straight higher the beginning they GAAP rate lease. lined

rate the that is in $X.X GAAP is million, So is so what guidance.

Michael Carroll

rent much XXXX? for was How recorded Thrive in

Pam Kessler

million. $X.X

Michael Carroll

is which $X.X million. from $X $X.X it rate, million so then to reduction and But that then are million, $X.XX, to investments G&A? is what roughly in get back you new is you the down uptick run to dropping just $X

Pam Kessler

Yes. Anthem Yes, Anthem. increase Yes. in and and

Michael Carroll

Okay.

Wendy Simpson

if talked we that about reduction then and in components. are online and Anthem, the your is So coming property primary those G&A,

Clint Malin

increase That is in was it what over in XX% just Anthem XXXX.

So contribution. a it positive has

Michael Carroll

the that the you thought missed What is is I a to little Great. talk your lease. then they know And highlighted bit process about there? either in firm Okay. preferred? date can a their XX-K reject or it that

Clint Malin

through it's elongated Care going Preferred right of now been sort period. think has a I an

of with be point, think they accomplished. bankruptcy have at would this I transfers like through out and the landlords, I working which have they think been other they they felt

that State remaining a Kentucky their out the the New New buildings they only in I have case in lawsuits have little Mexico, the General they but of sort and Attorney of bit. drawn Mexico think with matter two

through they I so are to looks And so are after evaluate have pay rent they like trying continued process, what think to organization they that their post-petition us. they to emerge,

looking markets, are master some I and markets think buildings our lease. in they at certain includes exiting in those

and Preferred and value it working right bankruptcy. sixth is the a reduce have want if gives us for working stay of removing with an viable master coming our largest They our in is, mean, this among and I see thing possibility operator diversification we good from accommodate, some because we them to Care lease. to now, that the are Preferred to in right view opportunity of we with now our having us entity So operator on the out buildings of operators. can do Care concentration

Michael Carroll

Okay.

So going selling I is XXXX? you about to going that to this the higher are a asset on that tap think few assets plan forward. a and guess going still to good want that Is in to in be you stay sales just way they lease master

Clint Malin

we I retenant some, see No, to might others look look sell sales, don't well. higher might we asset as to

Michael Carroll

that And be done to rate? would this similar rental

Clint Malin

We from ago of right part buildings. that rate. looking wants are is through that on when That and through Actually working walking Preferred the as want weeks look And they to our be, Dallas bankruptcy. preference would two We what from like same with what and now. the in now. is about negotiation retain I that would at that of right standpoint what them think some organizational Care are working they the were are emerge they Wendy meeting to an and we

Michael Carroll

troubles seems I that this then Frontier leasing has one up And Great. developments know guess quarter. and had like two for last Okay. were stabilized those I me, those

have and the I a what So seen is occupancy guess in uptick trends? pretty rate those good you

Clint Malin

been Clovis, some progress actually In have we proactive making on Clovis.

monitoring and talking the it We as evidence, some quarters. the occupancy number in been last that have over seen of have we about lumpiness

has done So the we we actually solution a for in that operator long-term value - we new that Clovis a found and asset. identified properties seen actually have proactively

with another Right hope guarantee community. the take company subject have operations so day and new And operating have now approval, Clovis which to right it's any now, over a lease state we just now. we of negotiated to a to

Frontier, lease on terms as be the effectively payment. So similar far current as terms cash will as the

community we buy for lease option company. the are a from But year purchase sixth enhancement with a new getting actually exchange operating this between that, XXth giving the commencement. lease credit to We in stronger working and are them in

Michael Carroll

Okay.

option Now what release is rate that purchase at?

Clint Malin

rate, don't gross have include would we be make upside the would - XX% effectively would the And the appraised value. we the basically into any price on then, property. our of I based investments retain upside it XX% purchase but book plus

Michael Carroll

Okay. Great. Thanks a lot.

Clint Malin

a operating this work So actually win-win company. Frontier, community for been new strong the in And great us who been we really with. it's has have managing think to they

think cooperative. this process right the I been But this very wasn't them. have with and for opportunity they engaged

we their So efforts. appreciate

Operator

Our from next Daniel question Bernstein comes with Capital ahead. One. Please go

Daniel Bernstein

I to in morning. direction go in a wanted could guess the and Good we'll there? the up hoisting about Did there something you the change Hi. I to start of bit back were right thought little Thrive they I but talk slowly, and going? still performance moving direction. which they properties maybe are

Pam Kessler

an of doing couple is properties, had properties. of like, have had newer Thrive are a challenges Anthem are doing lease Colorado They well have of had very up cost. some agencies. are They in very, of They opportunity. with the who challenges well. all properties with their using challenges the a They couple properties, that having

good lot extreme would bit money controlling there a But of think we Texas. I are in would Thrive retenanting portfolio. those same attention in the the probably asset split Florida, of is we in to terms They asset to The might invested we be that we not a in and is just out that in one Jacksonville the that about could challenges their it. Thrive sale in be other them easily who be the a terms that in And turned operator of the They portfolio within areas come have expense Florida. taking than up Texas area but same more of little expenses. a that be asset interested net entire have an likely They have Jacksonville, We of of as got variations to one things the seems in assets. just longer. Anthem the had It's One Thrive. amount it's viable. in the

our Thrive Another portfolio good outside assets of from thing the that about guarantees have amounts have is they Thrive. and certain support we due LTC

only Anthem So Anthem our assets. that. have didn't had

our more right But of while able a to we the for is Thrive us in Thrive, opportunity every out for challenge Thrive much be have more facilities put projections So at now have we there to to get our haven't that is projections in we and getting I a in rent. really than going good Thrive our promise can't opportunity point, this from what of we that, got shareholders are do but think XXXX. we

Daniel Bernstein

So a little that managing at skis the a the expense characterization from right under over would number properties be the way they got characterize perspective least their with assets they that grew. development an maybe and they are fast Is bit to of it? how

Wendy Simpson

management Thrive we as a team, is have challenges. them but listening, If had Yes. they love

So they have done...

Daniel Bernstein

No, before. I have met them

So…

Wendy Simpson

and know thing. all a entire hasn't a Okay. as participating assets. portfolio. in of operating the with and windfall adding our sort been of They It's real of what their or day-to-day have done for to new them very adding that over don't well in their development the properties and assets turning that owner just success the I

Daniel Bernstein

you'd question in indicated coverage? had a gets rents lease your to BMO EBITDARM operator, has maybe X.X anything press on rents about are previously and been another transfer in Okay. and or coverage. SEC, when in any you the new negotiating maybe properties December, deterioration a on is thoughts go rent, that your the there operator similar And other times release, here have possibility changed master Has lease to you those I master with that, the then different of I would similar lease back

Clint Malin

obviously monitoring have have don't to to the backup and closely. the to don't Yes, have think think position as as been to take operator, the new in would Care Senior opportunities We Right unilateral but operations that, something that today, to in now, happen. Dan, do there we we the bankruptcy. proactive approval it's the I organization we an survive advantage a trying of going structured company and which should has court coverage, not in lease been transferring to a deterioration be subject right are it's

So to the want alternatives. we prepared be for

rent transfer and on would the probably of low-hanging And think buildings is way the what some there possibly performance driving could level. performance been of some corporate on down not That is really would be think comes that the and potentially, at on focus. buildings about rents, the just treat I where more when at bankruptcy on Senior has we I potentially to because facility the there But these that. as deferred think Care much and events depending fruits and point. the to negotiation is how possibly some are

So we if there come new properties. and think to get long-term operate those we a is opportunity operator in

rent So what in currently dynamic there those is but a cash flow buildings. on regard would positive be, little to

Daniel Bernstein

their understand coming wealth Okay. comments question, or pipeline bit hunting, more kind terms been into Wendy's stock in equity the sovereign of do the in money the little equity market? where cautious you has do really what China just deals? elephant the you more are caused originally private And one is bid-ask a widening from for out, that has It's from? those drop on Just stocks spread back think the on kind to think and private money trying smaller mid-sized there the of to and going December be space, was some pullback in it to

Clint Malin

larger is are lot there think I a opportunity. There transactions. of

lot seeing are deal the a We right front. now on of activity

also underwriting sticking to but We we a and are judicious standards. being of lot are confidentiality signing our agreements,

lot a deals seeing there. we of out So are

look amount lot standpoint, multiple from And with think I doing facility things you is of equity can private as a so a to a property. do the I same transaction. It's at. work And there think one of

But just work are where been see we are that and in that find the seeing that the little there we have the a we price Virginia deal closed still opportunities fall looking. can areas we off that we where on. bit So interest like metrics just

as So or bit disruption miss, view bid-ask it's of hit that are and we that opportunity. little on seeing an but a we price

Daniel Bernstein

Okay. Thanks. That hop will I is have. all off. I

Clint Malin

you. Thank

Wendy Simpson

Dan. Thanks,

Operator

comes ahead. Markets. question from John next go Capital Our BMO Please Kim with

John Kim

basis? EBITDAR now is coverage operations Good get in that rents just us what a their to the morning. remind you recovery and also On increase Anthem, can what in drove on

Wendy Simpson

give by development years but operations. basis and they have We five up, that coverage starting have ago properties recovery on they is leased have don't what been as stabilized lease, they is about EBITDAR the

six was Anthem of we they originally Indeed underwritten lease did little up overhead five up or than it at of our cuts year lease assets. them ago, combination years leasing up urging. So had this are now they some and but later a a took

overhead in more line much fact operating properties. are XX is that So they with the their

less it's properties their So up, Anthem on combination filling leasing overhead of spending assets. new a up and

the by higher higher are in that we the expect even it expect have end year, ratio we from lease-up rents and to Anthem. be we four their So significantly coverage January, for will in of we have think than and that XXXX, rent still February is

John Kim

on were release Okay. saying, were on also you in I'm which lease was back and in a think discussions Senior operator you you But we And mentioned press that Care this in still mentioned case. I December wondering, then your that another with if December, prepared terms your Senior you the in remarks Care, similar were in as back property, for today.

Clint Malin

case. the is It Yes.

are the lease. have on negotiated. terms backup, would working as have lease properties, deferred not. move other The We are on far open that don't any ability rent one the without court there the is a to I just as there unilateral mentioned those questions But or we of as one of is about flow as currently, rent on the items We cash assets. be level approval very the similar, still but

be So do with they arises, building prepared LTC these a the transfer opportunity new experience but where have which organization, have this position we backup determined, and can to to specifically. that the operations to is trying be to if are just we

that So advantage a strong us. be for to we view

John Kim

and pipeline stabilized as else On mix on your acquisition to be anything far as assets, what more focus you rates could and geography? share the expect AL/IL private pay cap you there is

Clint Malin

what [indiscernible] probably we at most is pay of are private looking assets.

in which did assets, to X.X% private to evidenced is we just Virginia are we is Our focus Right the targeting what Virginia. is now, X.XX% on got which by on around the we deal deal, similar pay yields are for stabilized. assets on very with present focused relationships in have operators opportunistic And we certain on the in that regard is, markets, depends locations. are themselves geography to we regionally been so building based because companies, based that opportunities with stabilized really

John Kim

up assets? you to a put have stablized think buyer CapEx there cap to for And gone on upon… Is why potential or rates you do in

Clint Malin

an we joint the estate on it had us was that transaction - the sales ventures. opportunity where This leaseback was effectively a effectively with operator real co-invested

get come on of coverage led that yield basis. in that a price stabilized unique at we and to So off it and could it where opportunity

see we they And where net fit a that on more So can joint stabilized the been opportunities are operator, to cost rent flexibility. are venture assets very we getting the lease cost leases. estate these more the - and structures the lowering starting the themselves are utilizing return real triple helps to effectively lower where newer giving to the in have you

John Kim

is Thank Okay. helpful. That you.

Clint Malin

you. Thank

Operator

with Stender comes Please go Our next Wells question ahead. from Todd Fargo.

Todd Stender

asset, with Hi. that. it catch to just venture? is the I Clint, didn't within Thanks. on a net And lease theme stay Virginia triple that joint a

Clint Malin

is That correct.

on and triple principals net JV We is partner common. to the have well there operating lease the co-invested are the opco on the a propco and as our company as then

Todd Stender

do estate XXX%? Okay. the real And you own

Clint Malin

our in is estate. economic real the XX% interest

Todd Stender

you. Thank Okay. it. Got Alright.

to And then funded the interest Okay. but There that. yet? P&L the is piece is bulk it been how commitment? booked has deferred on loan get guess a go on mezz cash, of that I the and does

Clint Malin

to development is the expect yet. commitment a X% in of the We a been this XX right fund by not first equity with and March. XX%, in mezz equity position and XXXX strong the us XX% is everything funded has investment pay. it's now, on It line It in front current months, made we project. of There middle is during about of but

build XXX%. think portfolio. as we unique - new probably it's a a a transaction adjusted in view we And the of our come yield and this with relationships risk we to look we So way operating be companies would at wouldn't probably for of size a that is But opportunity XX% in us and for ultimate LTC. come to to piece with that great the return own pay current and

Pam Kessler

answer X% booking be question. we'll But your the to

Todd Stender

And goal owning table, of so ultimate or Okay. you. the own? the Thank at That a having were is loan seat helpful. to

Clint Malin

larger coming at a project, of our in bit was a a type it to are idea little a so portfolio. that risk bite the of on basis, is size this a build investment look companies new adjusted with and This relationships investment of to for us get

Todd Stender

you. That Okay. Thank helpful. is

Clint Malin

you. Thank

Operator

comes ahead. Securities. next Ford Karin [Operator question MUFG Our go Instructions] Please with from

Karin Ford

Good Hi. morning.

downtime more think one Senior Just leases we Care, rejects the that Is know some XXXX? much be on in downtime could process, a transition? but early could there it's I bankruptcy question process, court risk there your the in how you said you do in if the any in have

Clint Malin

risk in is always very but State investing good downtime, of about process in the There frame. licensure of the Texas is time thing is state short the a the

Waterville, being Living. able is the different much advantageous. I experiencing are we two Bakersfield So field California transition landlord and Senior to on transfer like it's buildings which mean, in of

if I any but think So, be possibility, there would that is would a limited. it be -

Wendy Simpson

reject our And rent? still they lease, even don't if have they to do pay

Clint Malin

us. pay to have Don't

Wendy Simpson

could rent. they to well, need and we economic out, pay only Taken say,

Clint Malin

Use and occupancy.

Wendy Simpson

fees. Yes. times before It X.X covers management

our a I rate argument think lease have we an So amount rent. in is that court of would reasonable

disruptive don't and awhile, gap the it's I the may rent. think We I we think gap. but we think don't delay lose I cash will in yes, lose transaction. don't lose we'll So will

Karin Ford

helpful. question No. That just second then Thrive. is And on is

you Thrive's transitions from of failed sell underwriting attempts six and of leasing from other now two an XXXX do especially operators. those, three do were three away standpoint With those what on think you want this from take properties I to developments?

Clint Malin

community The the Clarity the Thrive. ago. a frame correct Louisville a in and of longer sale transitions in building the for development three market, are talked the probably in Jacksonville it for going to were Jacksonville take on And time to one that. - timing. period lot few on you two Pointe was which is minutes it's up. been of from and of actually It the Wendy lease seems Well, a of us Jacksonville, about And there a just is two

lease-up of a been specific that and So the have to longer is that case just lease-up having what at target through should we elongated runway period. of looked was, you get period in a that span time

So that a probably most to going is sale, likely. be

that takeout certificate themselves a and building XXXX Thrive they came occupancy. actually other that that was opened of The opened we building in in at

Karin Ford

it. Got

Okay. Thank you.

Clint Malin

You you. are Thank welcome.

Operator

back the any turn I Wendy to remarks. This concludes the Simpson conference question-and-answer session. over would like now to for closing

Wendy Simpson

first for great you all us thank and weeks to quarter. the for again several to joining year you our weekend. a just look end. forward you, We about talking in Have Thank

Operator

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