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LTC Properties (LTC)

Participants
Wendy Simpson CEO
Pam Kessler CFO
Clint Malin Chief Investment Officer
Chad Vanacore Stifel Nicolaus
Michael Carroll RBC Capital Markets
Rich Anderson SMBC Nikko
Todd Stender Wells Fargo
Daniel Bernstein Capital One
Karin Ford MUFG Securities
Call transcript
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Operator

Good morning, and welcome to the LTC Properties First Quarter 2019 Analyst and Investor Conference Call. All participants will be in a 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 31, 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 Executive Officer. like over would to Simpson, Chief the ahead. go Please

Wendy Simpson

welcome Thank first quarter to XXXX you, everybody LTC's call. conference Chad, and

of results Joining discuss over few the Clint I back operators introductory follow and our come me will question-and-answer the Kessler, with our brief our to and will an Investment discussion our update will new Chief turn session. a give I will and are CFO; portfolio Pam call Pam, remarks, a on wrap will who four Officer. prepared Clint financial up I today operator the with performance, a standard, of then our before our guidance. and of Malin, After and impact with a conclude accounting remarks

meaningful with remain since been becomes dynamic change more market not industry has shift LTC's with permanent. when optimistic in there you future a ability to positive any Although opportunities in capture spoke March, last we we

as While pricing buyers we our pipeline like transactions has remains and disconnect building been slower are and we would multiple sellers. opportunities, between than evaluating actively closing a

continue. equity to long are at what unreasonable money As we private continues likely into as believe discount this valuations pour to the is marketplace and risks,

who even of grow XXXX, our did stronger an our regional we areas. making into in allow initiatives believe are future. LTC monetize several we said, can with properties. progress solid with That to current the strategically market we some I as operators And However, in this portfolio we good assessing to build will are

call will over to Now the turn Pam. I

Pam Kessler

Wendy. you, Thank

between explain of reduced the lease XXX Of results, I results that discuss the quarters. note, Xst. comparability adoption accounting became impact recent our to the I changes new accounting that that ASC guidance effective Before January specifically the impact on like of would of quarterly the

New we corresponding we tenants record the to revenue while revenue results that escrows straight-line with the lease the Accordingly, rather expense accounting not. as written expense. quarter under tax property year does our XXXX from previous guidance. off is and guidance, revenue rent contra new prior property the collect first guidance comparative than period expense requires Under as include

for the quarter, During and the operator communities the new accordance owed the new guidance. million new thresholds to straight-line wrote rent. of to for we XX% that would Thrive, leases Care, XX% it XX% and of substantially was with straight-line XX% obligations new and not reserves end through straight-line the not that respective maturity to probable, new in sets revenue living we straight-line Care or the through of an of rents. and all collectability Accordingly, collect lease from analysis accounting off all Senior off Anthem, lease $X.X wrote guidance, Preferred leases. Under transitioned lease our to us related lease by operated The on we we with to the the higher recording collectability their to senior rent Further, performed terminated a for provide determine Frontier rent due does guidance contra incentive associated balances the Frontier guidance also leases. of the these rent general

and off received rent to the amount recognized wrote from million amount transition recovery Thus, by million cash equity cumulative $XX.X Care, straight-line straight-line of guidance, contra recognized as Under of we we off statement. required Preferred the rental contra and subsequent $X.X income than are rent were straight-line the the recognized expense equals lease of Senior amounts accounting recoveries on off. the rent Care the January balances as general considered and So, rather expense the write our totaled as previously off collections These to the rent reserve. guidance. until Xst rent written are of a X% new written Anthem, of effective off Thrive, revenues written

Revenues a million acquisition, our of this Now, million and rent year expense $X quarter to quarterly $X.X to off I'll A the pay million capital from rent of from due million quarter Senior Care, offset Senior compared in revenue. $X.X $X.X million Preferred to property to revenue recognized written due partially decreased as results. ago $XXX,XXX $X.X received rent rent. Preferred to Anthem, Thrive, straight-line XXXX developments and from due than XXXX, deferred in lease million from decreases Anthem, $X.X tax to Thrive's Frontier in Care projects, by rather rent million reduction a get Thrive. in termination, improvement million were contra into revenue, These first Care, $X.X Care, received increased $X.X due completed sold property and failure in in and

of $XXX,XXX was During rent December XXXX. Thrive first that $X.X the as of outstanding in past deferred million quarter, accrued rent XX, due and paid

diluted $X.XX property Additionally, that the was to the impounds NAREIT last paid date tax year. $X.XX they paid in FFO XXXX rent share per XXXX. quarter first first in for quarter compared with

expense, lowering well Fort from item, expense expense. cash in loan per on represents diluted Written previously lower written The income guidance. share guidance a recovery venture by of expense vesting, contra Care to increase representing and million senior expense the expense. to as higher available Anthem, expense required shareholders tax recoveries unsecured in property we partially rent Florida, in revenues. titled $XXX,XXX related expense unconsolidated the related from property revenues lease joint property interest recognized Preferred Interest tax mentioned incentive and straight year, was in interest $X.XX debt from this I the decreased The the income of received due offset $XXX,XXX payroll of accordance and as additional expense new $XXX,XXX and accounting quarter, of and offset transition be G&A the year. FFO in quarter XXXX. was first Myers primarily prior Recoveries resulting by common in considered in item that contra as by to due growth was $X.X with income $X.XX the due XXXX $X.X offset flat line XXXX to a an a discussed, lower prior-year rent joint line the expense interest not January last recognized legal In notes. In of Previously our stock repayment as Senior million compensation written Care the to under in previously performance Net off Thrive, compared compensation year unconsolidated to as mainly onetime accordance guidance. new partially quarter accounting was off of and Amounts is income were payoff that under the changes with X, of venture prior higher first Off lower lease based decreased property a compared Excluding with increase contra amounts increase to accrued mezzanine tax to taxes

We year. range in the million the are to be G&A this million estimating currently $X.X per of through to remainder quarter $X.X

an details of originated community shortly. provide and mezzanine Abington, XXXX, acquired we for first community in development care in memory an independent Atlanta assisted quarter of living, year fourth that was and Virginia. loan last Clint living additional a assisted memory of in will the living the quarter the and funded care During

We capital million projects and own properties also under million loans. development improvement and mortgage in on funded we $X.X $X.X

commitments unconsolidated prepayment first ventures. acquisitions an fund accounted our $X.X credit million We XX, as related principal in development the mezzanine we LTC's discussed monthly per with the for owned million paid and downs of March commitments under earlier $X.X to totaling with million. joint received $XX.X scheduled capital renovations and During was unsecured fund loan dividend. $X.XX in two At two investment properties we quarter, our continue on to remaining pay $XX.X totaling of I share under notes borrowed commitments, million properties $X.X million senior to and the which line under remaining

commitments and preferred renovations seven to remaining under equity loans of expansions million in under remaining a related have million mortgage also Michigan commitment. $X.X $XX.X and on properties We

strong us flexibility fund sheet the to and initiatives. long-term balance and growth with provides Our our current and remains substantial capacity

$XX under $XXX under of providing approximately shelf million our over $XXX credit, liquidity We total have million. under with just of line program LTC $XXX with and our Prudential million APM our agreement available million

expect us served We has to well. which remain strategy true conservative our capital allocation to

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

turn the back I'll Wendy. Now call to

Wendy Simpson

Thank quickly for senior to extension I'd the and which we the also been is get with properties July flat you, transition back, and work care of portfolio and for bankruptcy transfer I'll during we basis. on Thrive, to our do provide updated to by growth a a approve preparing a progress make Senior ongoing improvements are also process, Preferred care of an is us the was property different with of X owned court. to some transfer, quarter-over-quarter their discuss Coverage like Pam. is transition preparing being bankruptcy senior prepared out Care Should other care EPS a Care then lot them to and PDPM the trailing their able We've centers, XX-month made. we landlords the guidance. current to Anthem are had to update the operator. our senior and for care The senior recently properties approved court XXXX the model. affirm rent on portfolio. also on has centers and the its leases of through an working way number begin through in

owed the Regarding grows mentioned. reps while thus the not their paid any has rent they portfolio us, XXXX XXXX Thrive as well their product in differed to XXXX. us, paid have Thrive Pam on far as with Thrive

million issued through and which notice to demand April. guarantors on rent approximately its infinite to $X.X we payments of such, As X, cash of Thrive, default and payments requires of for April

our Jacksonville, options to are building. recently continuing portfolio We Florida to related and broker market to engaged evaluate a the all Thrive

have in five paid progress. We regional has to with LOIs date other monthly strong of apprised two properties. operating candidates for escrow rent you partner We'll and into keep XXXX. entered Anthem our the

go We calculated For cannot until have our revisit XXXX XXXX. approximately period stabilized revision late all the be be higher the greater continue appropriate XX% preferred projected in rent portfolio visibility Anthem. to carriers' Any forward be before to XXXX, been associated we Preferred as realistically likely will than in interest accommodate plan we for reducing in for their with LTC, properties to have rent a of properties operations. number them with levels in Anthem's forward. forecasting, of we we operates to rent contractual it rents time, work going so LTC care properties cooperatively owned under of on XX stabilized have for the

we to affiliate be operated market As by majority are LTC of sale a combination released marketed operator, operated sale pursuing care properties a preferred. these initiative The by currently or an options. the preferred to continue a properties of remaining to result, another for of could

over on guidance. an to provide update call like Clint, the turn I to I'd XXXX our Before

full-year, $X.X investment per standard Clint. SFO XXX. is our due new to the higher expected equity the at is midpoint our issuances, Assuming to share no which guidance to asset sales, AS than Over and prior implementation of the between activity, be financing, now for accounting additional $X.X or leased $X.XX

Clint Malin

disclosed by transition Wendy. Thank begin leased previously Bakersfield formerly and buildings, operated you, our Senior to Vacaville, my with Living. I'll related California the remarks Brookdale

California, is lease agreement the with one became includes with $X at annualized expected commitment a from from utilize new commitment and provides for at has purchase lease million. upon may gap Bakersfield X% a XXXX of them affiliate funds. Senior of with these license fields fields lease a for and master Our master to effective months option issuance The be Living an Vacaville state million to $X.X capital the rent XX us communities yield. Field

field Our includes relationship four now properties. with

generations in are for assisted annual Living, rent California is We operating Portland, two four The a include master a care from XXXX. can rent $X.X a collecting The XX-year years and XXX The five to western option Living in and Oregon Based in with agreement frontier units have credit communities exercised for states. Clovis also same lease, the Senior frontier. senior beginning the to master communities. certain memory initial, cash lease were fixed as an new generations. be company also term enhancements. regionally Independent generations, transitioned rents which housing purchase in the initial million Its total from five includes management we living focused

million LTC on initial contributed cash During the Abingdon for acquisition Also, English affiliate funded X.X% previously lease closed the fourth was and English in XXXX. venture consolidated announced, XX a quarter Meadows mezzanine we was Meadows loans interest new in a as unit, of we communities, is an for joint memory with us. quarter, this rate Living real-estate the XXXX Senior quarter, books. $XX The million our of assisted $X.X community in originated living JV a XX% in the that opened care as $XX.X a venture. in Campus Virginia. million a in of relationship real-estate joint

XXXX, nine-acre Atlanta Buckhead a months for to and will mezzanine current X% includes care during us. XX XX For of loan, cottages. Atlanta, be current first living the the the units, Village XX% pending Five-year open XX XX% the living course, in that of operated living operating expected memory of with in which Senior Park XX bears units at balance by units, of independent The campus pending campus, winter XX Living, of interest construction, area with loan partner a is independent of Atlanta-based assisted the thereafter. pay note, new

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

in of Kentucky early is nursing Hamilton XXX Spring Tealwood opened with this Living. as and as first on living, County, assisted XX%, XX% of ahead confident forma, and its is at living community of residents operated during house is our which Boone center Occupancy independent our call, care being ago occupancy project Senior discussed two The week. few development pro unit in was week memory weeks a As February. last a accepted of skilled this opened is

The care to project development remaining part in community schedule by community unit is real year. XXXX. this assisted of campus. XX invested venture in larger Oregon Our August operated a living a report fields expected through at currently a as XX units which on The living operated be earlier estate memory includes campus of joint we independent already will in open building with by a field

Moving times our accruing X% portfolio times Thrive for assisted skilled X.XX Thrive QX portfolio living times now numbers management times converge XX EBITDARM using respectively a starting trailing to X.XX excluded fee was in month X.XX nursing our X.XX we the and numbers, and structure for has portfolio. and stop EBITDA from for win living respectively portfolio been our assisted as XXXX.

the in a is increase stabilized for issues. provided approval the while tax no go provider buildings the drive nursing and and could PDPM there industry a substantial effect governor similar skilled tax forward be by it help that for CMS including recently effect are bill through X and includes anticipated positive LTC. there coverage October are takes industry that X July signed takes The fairly which going was and could events Mexico bill several to in full proposed Our profit the Texas coverage

year the later Given expected process XXXX. approval to will early actual not current X. until or be are payments retroactive That July this

I'd like on comment briefly pipeline. Lastly, to our

oriented operating As quality on through newer rationalize partners Wendy we on waiting focus building strategically patiently are ongoing assets. mentioned growth to while pricing pipeline an we our identifying are working in for

that partners strategy smaller prices nursing We that down should are stabilized attracting new some pursue skilled to some underwriting and opportunities have also in or new our pilot see to standards bit come invest of operating decide opportunities we continuing interesting for we to them. pay meet and found centers assets

back things turn to Wendy. Now I'll

Wendy Simpson

in Came you. quick. Thank

and more When years. am strategic I We maintaining quickly portfolio purchase that to on future on a for plan well we current be based or resolving base. solid will identifying characteristics cycle are diversified sale, into portfolio growth asset terms challenges and successfully ready building a our will very asset embedded and continuing foundation current move the a with LTC with serve confident operator

about slow While take for very investors we are the Chad, future Again, you and our ability we at on sustained today. partners is pace for ready your participation to build to ground. long-term. questions. and thank LTC, am optimistic of change solid over fairly our now remain our I value moment, the the our

Operator

Chad first with Thank comes you. [Operator Instructions] Stifel. from The Vanacore question go ahead. Please

Chad Vanacore

Thanks.

past in right you underwriting So Clint, LTC maybe you the I pricing seen on kind over the zone And few -- of you that mentioned skilled months? think pricing the maybe not you right is nursing shift currently. are then in and for now? what standards do What pricing, mean have

Clint Malin

to we looked skilled your nursing respect nursing, X% coverage skilled have management point underwrite with with at last Well, to X.X on times still fee.

us. to requirement be continues that So for

looking it are have older seen newer We also our the and properties the over last skilled. has have the we year focus, we been on to are been invest a in in lot that so properties, and market not

Now the pricing Wendy things seen longer And remarks, of buildings have come we pricing. little market around mentioned the in on general because stay second time. prepared third in a or seen some disconnect have back her in as bit we to the

those regional was the stabilized. that been who opportunities unique given some where pricing in to based we found patient Virginia of like selective Campus the operator, and leading We drop. opportunity newer some Abingdon to has a with So a property very found opportunities that

Chad Vanacore

about overall been? versus coverage shift right. then your over portfolio, thinking have next they All to where the we XX coverage should months how And on just expect

Clint Malin

maintain that have stable Well is we on the assisted living what portfolio, think I seen. fairly would would

We have on lot that. changes seen

some PDPM, in to they trend that we the XXXX but over performance, XXXX. the [indiscernible] year as decline in the we into had forward have upward last and so, start hope and go change we Mexico skilled, increased with On will or

Chad Vanacore

it. right. All That's

Clint Malin

you. Thank

Pam Kessler

you, Thank Chad.

Operator

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

Michael Carroll

Yes, Clint, a the coverage thank that said coverage ratio guess, is? you can Wendy we that see ratio you. to I period. And centers? believe I I bit wanted what about to prior us or Wendy tell talk compared care senior flat if was Can

Clint Malin

about We call. It's talked X.XX our on last only about it range.

Michael Carroll

And that's EBITDAR?

Clint Malin

after EBITDAR fee. X% management

Michael Carroll

how past mix there And guess performing trending where us labor you with issues if Okay. the give any I is been can in in some And skilled is portfolio idea and few quarters? occupancy over trend? that

Clint Malin

It's been fairly stable.

the occupancy, so really last stable. noticeable has the year no So, on difference been from quarter, mix

Michael Carroll

working can them proceeds then to know and/or And mass some potential those of those going a release? the kind how have decided of Okay. that? you the are is I selling I assets through that potentially releasing sales? you you working bit with preferred, little about talk assets. work are guess for Do like credit rank How already within you

Clint Malin

rent that's with we properties Care where I the will negotiate assets Preferred to be remaining, for in With work a have of we mean portfolio that if through. it had ongoing Preferred majority and what sold the have Care. remain if few we to that would those remains

Michael Carroll

Okay.

Clint Malin

So that will to be negotiated. be

Michael Carroll

guess the XXXX. for the XXXX any I they rents pretty have at you rent looking issues haven't as guess back Thrive, finally paid then I they current reasons are for you they XXXX, with the paid And given it's that good yet? the why Okay. expectations what's

Clint Malin

I at driver now function of a and that's It's communities. rents the they paid to cash the in the XXXX. right us main haven't why flow mean

Michael Carroll

is in of million that's still you XXXX, Thrive the expectation? rent $X GAAP from Are recording still Okay.

Pam Kessler

No, currently recording from for we are not Thrive XXXX. rent any

the more the million back half $X of guidance towards year our that in portfolio. for have We

Michael Carroll

Okay.

XQ of So the you being dollars million XQ a rents maybe in and have in XXXX? second no half recorded and

Pam Kessler

Correct.

Michael Carroll

you. Thank great. Okay,

Clint Malin

you. Thank

Operator

ahead. comes Rich Please question go SMBC next from Anderson with Nikko. The

Rich Anderson

Thanks, good morning.

if million million sort you about Thrive, that $X explain But, are a rent your guidance a taking that $X.X at, making upside close on then also that off? April you in due So were change. is able just past mentioned which -- this of through just XXXX loop you to talked to pull shot is no you can you

Pam Kessler

part seek is expense it contra guidance, we increase including new year of And that because this that is item, $X.XX off. [indiscernible] the accounting past amounts in million that the $X.X that recoveries of of is the line as revenue. guidance written in showing So,

Rich the is and we I asking back I welcome Rich that is think think Rich, default note got asking now.

Clint Malin

that. -- on lease and four we we're part in Yes, obviously on and so we're with have $X.X we of live regard we through to months, public this million is this transition the the the for something the working negotiate working first how admit this and one guarantees negotiation this resolve that through that Rich, with associated would

Rich Anderson

right, but right upside there then not will SFO to All you're that's guidance now? in successful, be if

Wendy Simpson

That is correct.

Clint Malin

is correct. That

Rich Anderson

a a payoff. Pam, there couple you items here. Okay, said of loan was just

think the said in $X.X Where's you I statement? income that million.

Pam Kessler

On consolidating joint ventures.

Rich Anderson

Okay.

So it's me? not excuse explicitly,

Pam Kessler

to to will sorry item $XXX,XXX be about that I'm with a pay-off. $XXX,XXX last line going forward,

Rich Anderson

Okay.

but right, don't on and origination first in mentioned Okay, table good. it five? your investment listed mezz All then, a page I you on Clint, see loan quarter, the

Clint Malin

it's in originated XXXX. the Well,

Pam Kessler

Yes, it is last year.

Clint Malin

year, on was loan the funded the last it but the year, in Atlanta So, last this originated list location. Georgia on origination

Rich Anderson

you. Got

Okay, the can just And basically right rest for think of this so, last then in sort expense into forward carved no the but have Obviously, item I numbers of word revenue thank is rest you have your off kind up call of of for we'll setting or $X.X of best collect are mentioned, that, terms of goofy, you you me. for it's you we taking the year, own, going with out whatever repeatable and fault it. rent? as there repeating now year? million but How that accounting our this or up $XX And that one the contra line much. come million biting about you as very the is lease a

Pam Kessler

$X.X the Yes, the in is drives that million. exactly There is correct. -- one-time item there is payments

Rich Anderson

Okay.

Pam Kessler

now, But not to are go a are expect wouldn't that all paying forward. on operators those they basis. since I And right cash

rent the contract we Why will that collect be not? So their reflected expense. as in cash,

Rich Anderson

does the at that quickly $XX over get $X.X and even of right, get once to a sort pace million again say full of But because you million? All less start that's you'll leases end of all the you $XX million, kind right. sit the does the that

Pam Kessler

actually we is And correct. is the that straight-line only that there. portion Yes, it it's in wrote-off that

quarter, $XX.X currently, they paying we And million. year. end there the this like get by that's So paid of if the is everybody

let's Thrive the Thrive is the have paying we happy is properties, anymore. talk So back in dance, us not new rent and which operations

go So up the into line. will rent the new operators rent

Wendy Simpson

revenue back goes correct. to is up that That Exactly.

Pam Kessler

makes that more everybody, clear it So even for yes.

Wendy Simpson

So as yes, clear much.

Pam Kessler

the same new… is if you And we with the senior, the get back -- also that properties and know,

Wendy Simpson

They only relate these operators. to

Pam Kessler

Right.

Wendy Simpson

So, that rental to the these new a operators is lease, income. under revenue to go new extent that properties reflected in back up

Rich Anderson

you're And close or another then very to Okay. converting I that the would is Wendy, transition? operator speaking assets other describe as or something Thrive you operators mean, likely that. to if like how

Wendy Simpson

and have do have the thing licensure well intensive. that and but all agreements how getting you transfer so are we don't things of and go LOIs going sort and is things know very Yes, labor the we

Rich Anderson

And all on correct? is current if the so, those is four the rent, Thrive that's only that not one

Wendy Simpson

Yes.

Rich Anderson

much. Thanks right. all so Okay,

Wendy Simpson

Rich. Thanks,

Operator

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

Todd Stender

Thanks. have facilities -- they they The villages, the two I are two… if in them those Clovis, -- Carmel

Clint Malin

That's correct, Todd.

Todd Stender

They they last describe stabilized, were are look performing? what like what transition and prompted of -- how kind year, transition you can just maybe those the

Clint Malin

Frontier those our amount of stabilize help operating I were successful work us had be in another a we think different occupancy to to last, some community, growth definition in challenges. and drive they found communities there so in I lag still mean, in were a of rolling Clovis at were to they occupancy. our on to opportunity able stabilized to in transitioning overall come And they We and this, we time by operator. on an think see the company we'll focuses elsewhere. have with

Todd Stender

it it of rates, to just in was there, rental operator in So, the was new get a sweetener no same just kind a change rate? purchase rate, same that the option, rent at

Clint Malin

is -- a It had but first some the as for was that. was increased is short-term same got we years, the currently sweetener, rent but on credit we the enhancements the for Frontier, five initial with the option fixed rent

to generations more a think we our Frontier hopefully, generations. gives moving for been opportunity growth win-win of opportunities with to it years LTC and number a was it the and for generations. - see and talking to I We've us work forward So you

Todd Stender

can then see to you. recently months, Carespring, the about of talk with Kentucky and the was long stabilized achieve maybe for describe kind or lease-up the how reference that - SNF And to so the you I to maybe one? thank that had SNF period Okay, to took only developed this about it to in lease-up takes occupancy XX latest

Clint Malin

We're at are budget as as period and that I lease-up. my center. comments, looking of XX occupancy week, to our XX% on this XX right of month at ahead But mentioned now actually they in nursing

hospitals We forma are able operator excited with ahead managed up regional of Carespring property, care in in currently. strong lot of get, and and about pro I leasing done the a traction are to they job relationships that have marketplace. providers, been that that have they've a great

Todd Stender

-- of X.X, what's that expectation the Probably have front or me. I should say, that yield, lease-up in is right? that was don't there And should, is

Clint Malin

Yes, that's correct.

Todd Stender

got a there you I the investment in Great. you JV? and about the one, bulk know triple you've talk Can Virginia, that XX%. And last about structure joint thanks. talked ownership you just the the facility then And there, acquired, what of venture; net is prompted a the lease. about

Clint Malin

Sure, no real problem. It joint is a estate and the lease, net between venture. operating company triple the

was the lease joint with this at start let's some Our partner a the say, another in common interest, so was situation operating funded is ownership a provider where real building. they and losses capital venture estate operator

side. --on that on had real able funding operating to operating credit we've the up on the of been basically, we the the losses start So to estate value actual

Todd Stender

Clint. great, All right, thanks

Clint Malin

appreciate it. I you. Thank

Operator

go line go ahead, end. will Please Please Bernstein question next be from ahead. is Capital The your perhaps, muted Daniel One. on with your Daniel,

Daniel Bernstein

muted. Yes, was I

would what you So I'll give when are maybe better there say operators Thrive specific and ask and now. something those operators to concentration gives doing to assets now, or or have confidence going just morning to are with don't about that they able are what can more again. much, regional in be terms you else I what transition those than flow that the operators, to want good than do rent generate properties orders other that you are I doing the of is something confidence cash

Clint Malin

a thank That's you. on into drive basis portfolio. the great cousin buildings portfolio the geographic diversified Atlanta of is included The Thrive and this question, point Sure. spread and right out now pretty

on operating the found we a will think regionally-based geographically in development this, and we projects focused and existing be that companies obviously still seasoned operations. the They've start portfolio the better So, that phase. some of operators more done with lot working drivers on we're the

we think for it more they from. platform So have portfolio, good to work their and will be just stabilized

Daniel Bernstein

Okay.

there. the In out and know well? points as actual any investment any I the I more like maybe whole opportunities you still types assets finding to it's cap leaning I Are of sound want you're terms have probably value of but seeing moved add meet maybe equity bit higher price your color out on the little there just pipeline a plenty It guess rates private or skilled, more whether all you are towards that seniors seeing, didn't question is still there? of you're that's hurdles.

Clint Malin

pay private of than I the on skilled. side opportunities the we're would more say seeing

we're based on to pricing anywhere There a is on be identified would of are from that add as is add, pay value what value my looking side newer remarks, we that portfolios. on very to stabilized majority I As skilled a the one-off in interesting, which value combination have private but is but people mentioned some we find adds. properties prepared for opportunity seeing the assets opposed

still seeing, rates we're why with mentioned that's as comments Wendy the private cap is very term isn't equity still strong. So

rates the our focused opposed make sevens, to in where with basis are to that on six are rates on compressed structure In coverage terms house. work we need RIDEA the investing the hard triple is the net to it cap we as lease at

Daniel Bernstein

Okay, that's all I have. Thank you.

Clint Malin

you. Thank

Operator

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

Karin Ford

cap expect potential cap no I morning. portfolio. there. there just collecting not we rent ask about preferred on potential What Good so you're range Hi, wanted currently a I rate cap Jacksonville should sales asset on guess on on the to rates? disposition rates, from but

Clint Malin

what next for waiting can an on seeing to hard we XX that in come have that on But call. days in give XX now, packages cap a we that exact to and right so we offers process that now out end the the to It's running up. rate update out. We're right so on next provide probably will packages have we're where portfolio,

Now, now assets. we're strong has seeing pricing general, the in pretty been right on yield

strategically that approached Preferred So Care the assets. we're looking hopeful We these we'll at to bankruptcy assets. them and looked least doing across recycling this work nothing and Care, number. ago to a on back No, with and bankruptcy course filing we're at We've the of number assets capital of them them. new Preferred selling to actually years prior there's even come selling strong

we've for it's So Care to been at years. portfolio, something looking number when the comes it Preferred a of

Karin Ford

this be the And could year? volume disposition big later how

Clint Malin

community also which just Preferred give would have the now will market. so that It majority on market. Jacksonville mentioned that of portfolio have And can't be, I do number the you but we Wendy Care then we right equity mentioned the be

Karin Ford

Wisconsin And that great. on opened. the question Okay, last just development

You just was XXXX. the XXXX inception it XX% XQ occupied, about rent to you talk from like Can it looks XQ that? you deferred said

Pam Kessler

collect We lease that did, standard it's a related you'll probability the new that of XX% an accounting XX%. XX% to assessment XX% to to requires

Karin Ford

that To mathematically out. speak

Pam Kessler

Of of maturity make line into date prepared lease property all the end the would rent is imagine we the on until lease, I probably that that we the and property certainty visibility that we have be decided not exact of we report don't that and that straight which of lease cash collectability up to stabilization, assessment. could will stabilization more a have that through through given have we that the flows in

line will that. on recent straight the recording be during period, rental we not So

Wendy Simpson

all excuse Can clarification Karin, way me, on the getting we I XXX tell were -- up.

we So, if pick up all of so till what a all doing we decide straight start prior we line we this straight, yes. XXXX, the get rent in can sudden

Karin Ford

written. currently was that Yes,

Wendy Simpson

and that I'm that not that straight rent. through you rise collectible. as sure you how thought well is that line back determined point would common future it revenue of go recapture rule But from because was would the written, all you sense straight line say

That So that a would be makes no sense. enormous pickup.

Karin Ford

wanted just clarify… I to

Wendy Simpson

clear, think consequences. in certain of fact was difficulties of of the issuing this law I clarifications because not I things we unintended of new given have so yes, suspect accounting up, and the have the standard it's new right this which cropped that clear parts that of implementing because Yes, I lease things kind the lot the suspect on ramifications a rule. implementing will be all had

Karin Ford

line And that be were to booking that paying until rent you just or? straight not to start or just that deal going cash clarify, it was always intended stabilization in would

Wendy Simpson

certain They I rent of deferred have that. credits, got amount

Karin Ford

Okay.

Wendy Simpson

almost old we free steps. amount start a the old I don't rent one, level. we lease so That's in rent that and you what mean did line of deferred paying all guidance that's under straight prescribed. is under always would the and certain have as was recording what day been rent have guidance, They

Karin Ford

it. Got

agreement And had so there's front? you no that to change Tealwood the on with

Wendy Simpson

No.

Karin Ford

Thanks. great. Okay,

Operator

Nikko. from Please The follow-up Anderson go next question with ahead. a is Rich SMBC

Rich Anderson

Thanks.

Sorry.

million. one in I mentioned of there's a XX% think now? tax $X.X just number you property of the chance, that I'm the type follow-up, one-time-ish XX% carve I a question some tonight. you to there have one-time-ish in amount Is having cocktail out any Pam

Pam Kessler

this not. there's not that a No, actually the contra we've that in on it's it line deferred anticipating Thrive $X.X called million that recovery we item is is quarter that item that reconciliation. our again, getting expense I'm receive the non-recurring that And FFO

should should every to being quarter similar equal be absent all that. there's things So else be this

Rich Anderson

right. Right,

of just will would? kind tax property they is that as So grow normally

Pam Kessler

don't that property see I on one. be changing recurring will mind tax be perhaps Yes, item, the

Rich Anderson

thanks very much. right, All

Operator

Ladies over closing for to and any to concludes back the gentlemen, our remarks. Simpson this Wendy I'd turn session. question-and-answer like conference

Wendy Simpson

Chad, weekend. we listened forward who second great and a you great as we thank a our and look updating end you approach has everyone the to comments, quarter. day Thank to of the you, Have and

Operator

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

may You now disconnect.