LTC Properties (LTC)

Wendy Simpson Chairman, President & CEO
Pamela Kessler EVP, CFO & Corporate Secretary
Clint Malin EVP & CIO
Jordan Sadler KeyBanc Capital Markets
Piljung Kim BMO Capital Markets
Richard Anderson SMBC
Daniel Bernstein Capital One Securities
Connor Siversky Berenberg
Call transcript
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Good day, and welcome to the LTC Properties, Inc. 4Q '19 Analyst and Investor Conference Call and Webcast. [Operator Instructions].

Before management begins its presentation, please note 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, 2019. 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 ahead. conference I Please turn now and President. like over would to Simpson, CEO go the

Wendy Simpson

and Welcome to operator, and Fourth LTC's morning. Call. Conference good you, XXXX Quarter Thank Year-end

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

positioned operating next change. sheet us strengthened which a starting future we LTC, with unsecured some and of made proceeds or the Those significant sale progress, the million changes our few decisions tough our out from of of special was LTC. successfully have XXXX our We using which of on during for we for We notes, growth. had $XXX of I'll addressed spend new by year a minutes partners some focus. to portfolios. acquisitions credit detailing line some the for challenged company have terming we senior with operators move forward through balance

through Thrive work of to In case, them rationalization and work are examples operational portfolios of performing their with LTC's challenges how through X Anthem's we were we per corporate expectations. head. support and to that Anthem not issues

our By rent the they and in end them the of greatly XX% XXXX, XXXX. higher than paid Anthem improved was was portfolio performance rent in approximately collected from us

X softness leased with Anthem XXXX rent us, identifying XXXX, communities the to After XX% of We is are moved collect their temporary When to granted capitalized a forward We and thrive believe suited of to from from opportunity who meet materialize, did an in regionally-based take to local rise. million expect better the portfolio three them they in give markets. transition to demands not demonstrate we that rent operators, the we path progress. $X.X to lease-up at had better quickly increase. progress separate which to different release we a

Management Group Services an partner is expanded new Veritas and operating Affinity Healthcare to Group, and Trilogy represent LTC; two, relationships. One, Living the other existing

with that as We the programming. their these initiatives care pleased are and been the own has cultures, partners and made transitions marketing implement progress

in yield is this Transitioning will just when how higher transition one of assets XXXX. robust regional to cash our we've solid rents properties Thrive operating portfolios XXXX quickly example over Former and portfolio network of needed. relationships and used

monies Additionally, lease to during we their allowed Senior legal maneuvered rent fees. we to the year, their all assume Care their time to owed due past in exit finalize as courts all Senior work expect financing. continues objectives, and emerge to bankruptcies Currently, be including Centers' through Care over some on bankruptcy. LTC get the to Care they us, March. emergence short our received After we Senior extensions to

have a to emergence. the master implement continue they the are transition should failed we with the We plan or to not ready to lease, portfolio that from bankruptcy to should emerge of and post need terms comply arise, plan

likely contingency. and carefully that LTC Cares' monitoring are prepared for We are confident progress Senior is

based selling will portfolio, later, sales worth successfully care annual be preferred our million divesting capital in to we $XX XXXX, which by additional average the historical of as we on continue discuss average In recycling million. higher executed Clint our program with this recycling on than opportunities. pursue capital XXXX line in and properties, our of annual progress $XX will

HMG a another to was year-end, Randall we and of $XX Healthcare, all Medical investments portfolio. Of English operators strong Meadows $X.X that adding Residence Resorts, to to operator. new Ignite XXXX, with transaction LTC, our are new with the in completed completed million we additions regional million Subsequent

skilled operators both living. span nursing senior new and These

and progressive should depth and skill manage the Ignite allow to side, through evolving care them our PDPM. models models HMG, of reimbursement regional talent like whose and On innovative successfully operators

is private the development capabilities operating whose operator residents regional provide and pay us value. excellent residents a with strong side, significant Randal On and their

continuing new But source it triple focus have changed benefit opportunities early to net traditional of financial shareholders. Our we that that has leases that solutions. meaningfully deep to and our our creative XXXX last growth requiring bears market best dig show kinds will the the since indications to call strategy transactions and on not repeating will find

properties Pricing remains costs. fairly cap properties replacement are priced tight. above newer unattractive rates well Older have and

have a and growth have fan criteria. our no underwriting to for been never sake of stringent We plans growing abandon

their regional who continue relationships however, growing will, have operators to the do so. in are and interested We businesses with build to resources

We by guidance offering continue operators. sheet growing meet advantage deploy through our structures use our changing asset capital to will expertise flexible balance our for needs management and to the regional to strong with also I'll creative and which of finish and and XXXX.

preferred Assuming portfolio, $X.XX between be for care or and no year. expected is investment issuances additional activity, and sale the equity FFO the the assuming of to $X.XX financing

Now the I'll line to Pam. turn over

Pamela Kessler

period by a the requires does Thank million increased projects, Rental the development is XXXX tax resulted you, period quarter lease not. Total property tax increase lease to accordance collect related XXXX rent revenues Anthem's and while of expense. we to the year. property recorded offset revenues escalations, includes which and tenants Wendy. the same new from $X.X in tax million related of as lease increased revenue fourth for XXXX guidance the to Therefore, our income, us with with last completed revenue remainder corresponding increase revenue property accounting $X.X from million, The record $XXX,XXX from that the transitions. $X.X acquisitions in growth

than failed protection. rent million Senior due In they In in past XXXX. rent and Additionally, we December did quarter note fourth Care paid entered XXXX XXXX, rent more of from in $X.X the Care addition received all rent. bankruptcy December XXXX, we XXXX pay this December Senior that please to quarter to

fourth Senior increase. offset the Preferred in quarter $X.X a of compared quarter XXXX million fourth However, the Care XXXX Care the from with rent of shortfall

million the the fourth $XXX,XXX projects, expansion in due quarter and to the senior XXXX increased $X.X decreased other related renovation to income of fourth XXXX write-off loan funding income additional proceeds be to Interest $XXX,XXX from of while quarter preferred reduced and longer we're decreased mezzanine our investment primarily due senior lifestyle lifestyle. payoffs earn-out income projected to paid. from with Income unconsolidated equity and joint ventures loan to that no

fourth NAREIT per the diluted $X.XX was FFO share XXXX XXXX and for quarter.

quarter, Excluding XXXX in period and the nonrecurring FFO insurance fourth earnout minute, XXXX items, proceeds compared in XXXX a in which year. quarter, with $X.XX I'll in $X.XX discuss of of the was include write-off $X.XX the $X.XX fourth the share per that last

on in to the sale from I on income XXXX talk year about period impairment rental preferred the sale a last fourth decreased in due year's to by shareholders described, other the a gain will prior a equity with the million decrease shortly, compared revenues. common to Clint available income Net offset just an loss increase which quarter, related $XX.X investment, in in and partially charge

During the XXXX from we damage the to fourth $X.X quarter, and sustained in proceeds property sold it gain a rather had we that fourth hurricane million insurance a than quarter. recognized related rebuild it,

resulted other with $X.X proceeds in the of properties fourth $X.X These in loss insurance sold netted or sales X proceeds a the million million and Texas one additional $X.X Arizona, net cumulative of in when We the in for quarter, million. also gain.

of G&A XXXX year's reimbursement of quarter $XXX from decreased last by quarter Interest the the from unsecured expense XXXX the to Senior fourth by quarter. due fourth senior sale fourth due legal to fees million in increased from notes the $XXX,XXX expense of Care. $XXX,XXX

million to expect to in $X.X we range. million the $X.X be G&A quarterly expense XXXX, For

in the in with Michigan. During discuss $XX of we to in XXXX of new of are Clint fourth associated the to further. living Subsequent transactions the end center will the acquisition acquisition quarter, The invested year, operators these million X the we senior LTC. Texas. nursing invested these skilled communities $XX.X million a X properties in

million on we XXXX dividend. the in the quarter, million. loans own and quarter million as monthly and LTC's we share as $XX.X development funded also payments $X.XX improvement capital During per fourth mortgage Dividend projects properties during fourth totaled under $X.X well $X.X

totaling million. owned development At December under remaining commitments $XX properties we XX, with X

remaining have commitments We X and on Michigan. loan $X.X expansions of to million properties in also mortgage related renovations

the credit in our bearing fourth of maturing Wendy XXXX. quarter XXXX, of million termed of X.XX%, $XXX during senior at interest notes out As unsecured line with mentioned, we

our $XX million made a borrowed $XX.X credit of our of payments of fund and we Additionally, under for senior million line scheduled under notes. acquisitions net projects principal and capital to unsecured

of year, to credit fund we the the line borrowed Subsequent for commitments. our development end and million acquisitions of under to $XX

of under us almost a under growth million maintaining on and have $XXX sheet capacity, we our LTC focus success balance our We the and long-term providing total to fund flexibility available credit approximately with liquidity $XXX million current currently gives need ATM, strong $XXX of initiatives. million. line Our and

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

over call turn Clint. I'll Now to the

Clint Malin

and development, Thanks, portfolio an properties Pam. lease Lifestyle have Senior of the Care update equity provide several Brookdale's Preferred cover, I on investments, under status items including also the our pipeline. acquisitions, to preferred and numbers renewal, recent

evaluation of nursing and option shareholders. discussed that the was we skilled quarter, our best with the As LTC thorough re-leasing sale sale Care, portfolio after a of Preferred and we our decided last initiative for

was under will of expected to Net expected properties be of first Preferred remaining XXXX in quarter. completed million. and the X sold currently the properties XX quarter. On contract proceeds XXXX the $XX under the anticipate X second XX is approximately to We the currently contract close and Care, the sales are XXXX before buildings to leased be the in for end

the the call. will provide transaction on additional details next earnings quarterly We during

in X has by we of properties that completed. diligence time, on quarter, affiliate also nonaccrual of sold. been being an senior which I and Since due a process hold in said were preferred owned Last been purchase executed a investment basis, equity has lifestyle, the agreement that

approximately net close the investment the agreement, the Based on difference has in investment between represents estimated LTC April. which impairment our of the under expect sales preferred sale million, $X.X the reported its purchase proceeds. on sales We and to equity price an

provided agreement. primarily CapEx buyers' received last range their have than of operating To XXXX. higher and to related expected quarter, on forecast is the from in we income the due date, impairment through Lifestyle additional holdback indemnity requirements income provision the to a substantially based an net Senior in all the of $XXX,XXX we we $XXX,XXX The purchase

of in first in X total through is renewal lease to this the consists which at properties Brookdale only years, window expiring renewals the XX. master were which leases which Living, Renewal remains covering leases option, XXXX significant is a portfolio end XX commence Senior open states. Currently, we January have The Brookdale XX exercise are Presently, of Brookdale of year. June its renewal a on would X, for XXXX. term approximately notice through of

term, term, initial likely represent During expected variable Brookdale to on and of will year. less continue the the renewal XX is X% option. expire which our in which escalations X exercise is leases in annual and believe properties leases, averaging which the have the by is revenue. as approximately lease Besides X% per based renewal master the Coverage to we Brookdale us next that than X XXXX its months, the during rent formula, healthy, portfolio leads a

the million living and and Texas in to acquisitions. are new X total Shortly Hills that $XX Sterling X be in the LTC. to million a in of and We lease. XXX at assisted include million units Michigan first properties of a we The operators Moving located to for $X care Auburn of close with closed properties the in an capital with the announced of them Heights approximately improvement the after year memory of $XX investment end Michigan additional quarter a and XXXX. right acquired investment deployed

in X.X%. is the starting operated operates net established living X-year licensed assisted with escalations in $XX.X XXXX. in of Texas, The Michigan-based X are annual nursing cash Longview by options. property The with center XX and invested and XXX Randall master lease lease, X% a million business The closed with Michigan, in rent independent family XX-year is acquisition. of four Communities initial year in care a in being Randall memory located communities Ohio currently beginning Residence in January. renewal yield the beds skilled living, We in and Illinois. triple

XX is renewal master two X.X%. offering HMG cash a X-year triple conjunction and starting Healthcare HMG the is Kansas. options. had annual center properties X, over took with owns Care the and and of the matured. in In rent nursing established X% operations Nacogdoches, under operator in HMG XX-year in year in another skilled and/or Healthcare lease lease center initial net with Healthcare The yield a acquisition, Texas, XXXX escalations we with currently which was Texas operates Senior in Housing with

also we property is Healthcare X sale. city it, marketed assumed HMG own operation center now Concurrently, a in being of and commence of these closed nursing for same operations The consolidating Care the of Preferred closure properties.

for find to to As a and we further best new building in benefits resales market, to strong strengthen position helped and after a operator consummate result Preferred also for In of with Longview have these were opportunities Healthcare's a regional of relationships LTC our we in over LTC. which invested portfolio transactions, and them time resolution newer Texas together LTC. a able working in building the cases, HMG the Care both

case the to principles, a affiliations. prior more X company of have we back than of dating relationship with In XX-year HMG, their their

all opportunities. to hallmark of our relationships We believe strong relationship and the growth for we new excited culture with and new have team a with will new we additional of possibilities current to source the strategy, are Maintaining our management principles continue offers. very foster and reunite is to and capable operator and of their HMG

time, discuss developing I Under our to numbers, like you Before our recent unit development portfolio senior we I living, venture, real The to joint are fields would XX on welcoming estate update expected of begin community care in memory the buildings which will of first the a one our projects. partnership community is Oregon. and part residents at in in have Medford, fields. we living with X March, assisted

skilled portfolio; XX-month numbers. coverage, portfolio Preferred respectively, X.XXx trailing Remember and using living excluded our EBITDARM X.XXx, and and the for and our that have they X% EBITDAR Care assisted for was numbers. portfolio. X.XXx from these to sales portfolio, nursing respectively, our Moving X.XXx, management a the been given QX of fee

active. of with up see stabilize finish to continues a these We're sauce excited I'll to some deals of and on which from opportunities part and growth turnarounds robust continuum. financing across to pipeline, construction our in comments to are evaluating be white and the

into the operating mentioned, or but stringent remains of the meet our have we've to create criteria enhance As partnerships. underwriting opportunity growth must frothy, course, and deal or market the the

Wendy turn closing the Now I'll for to call back remarks.

Wendy Simpson

In has challenges, the last their Preferred of been new balance and our has involved portfolio going safe Care strong Anthem's former dividend our very and the to payout. in Thank the to last monthly you, capabilities the early conditions. became norm. new Causes need Care, our Thrive obvious which sheet have Pam comes assets. LTC that management, maintained XXXX, years, challenges, reposition and the market strengthened Senior success it these Through Clint. to and up active attributable bankruptcies, X portfolio. manage we In was of leasing half in overdevelopment and painfully properties challenges not other operational the to are Then be

I remain million we to can With and growth LTC. highly our geography growth, liquidity, and type. committed portfolio truly now add operator, focused is diversification that to say of property by are finding challenge value to on our biggest $XXX broadening We

by that remaining We done become as and our creative, more others to and our interesting not to progress a positive have I strive open am differently appreciate. begun much opportunities to optimistic we transition and REIT about XXXX, flexible opportunities a may

we to now again quarter. We ready next for updating questions. look forward you Operator, are


[Operator Instructions].

Markets. question first KeyBanc Capital Jordan Sadler from Our with comes

Jordan Sadler

Preferred with wanted to I start Care. just

I that total place us took are If given That in where do estimated from what's to this XQ plus XQ? would now. us? and follow happen of you proceeds I to anticipated transaction exactly last helpful. - Could wasn't bridge the for didn't quarter, we you sort could just that quarter's just be

Clint Malin

didn't We as quarter the the Clint. due the is proceeds open. diligence number this a total because far period last Jordan, contracts, give resulted as

under quarter. contract the with holdback. after $XX buildings XX first $X fourth occurred are that million approximately were close proceeds are now, The that to for net in the is sale expected million quarter the right currently So in that the

XX approximately million those with proceeds. it's So of net properties, $XX

Jordan Sadler

And an additional left are to properties sell? two there

Clint Malin

two - sure, no. There's There are additional properties.

my Arizona was Arizona. is And being that remaining we operates the were property behavioral together. had behavioral operates for one skilled in the as initially different a process, remarks one that the marketed program. that Texas. in differed in remains from closed during specialized one other property we prepared that probably It's in it's but buyer other a And So currently building marketing building sale. because I buildings there's for building Nacogdoches, discussed in with a - we But the there's found a that that of Arizona, program, nursing

that that be targeting and interested behavioral remarketing we're So specifically a program. would operators in

Jordan Sadler

the what's one? properties, the from and the remaining X total And other behavioral rent

Clint Malin

it with to what $XX,XXX we're now Right now, month. that a negotiating - we It's approximately is are should similar but which a receiving probably approximately Preferred on Care, $XX,XXX. basis, monthly right be somewhere

Wendy Simpson

Jordan, not because of proceeds. that's get get close. anything we're going net And to Nacogdoches off the We'll

there's So one Preferred building. final only

Jordan Sadler

the where I feel fell contract, are bit short proceeds the I were the in that of, I a gross we guess, curious triangulating. that are ones were fourth just like I'm And were cap the rent just moved that rate we sold - guess, under were if the what's Because or we the overly - relative rate or that essentially XX? were the the Clint, on market optimistic? cap receiving, implied you quarter, to

Clint Malin

on cap for... buy mean, usually at it's basis. hard up rate I think it I will a them look to people usually

Jordan Sadler

understand, basis. rate - to I model. in this have I but No, put I'm lease just ultimately, Yes. A my

to So I'm just trying understand.

Clint Malin

We readily. number for it to that you. can have can don't you. calculate We get can We I calculate. that

Jordan Sadler

an of Clint, the be characterization. pipeline. of, where that and also tight. in interesting like market pretty is Okay. continue context I about sort of to And your guess, I the active, still remarks, said guys and you on which Wendy's opening guess robust seems you will then maybe underwriting stringent kind

be to creative. got You've

can the little So what maybe you a robust there of is? bit on sort in dig

Clint Malin

seeing - absolutely. broker lot through Sure, flow, see there's a We're that transactions we - through a relationships. community, of of mean, still the there's I lot lot deal a

in the were we very qualify to high. deals. reviewing think active, engaged we is for us. deal sense That Obviously, pretty So and went that through makes we volume ones evaluating

We are selective. very

able lot a be at look to are the think to have for you ones we of us. appropriate transactions to So that find

tens there's a activity strong. market of the still there's lot still - But and fairly is

So we're looking there's said, turnaround deals. about private I skilled, We're talking at investments to and relationships like pay, deals with operating mezzanine development build companies.

actively very we're at acquisition engaged in looking are a we the opportunities. lot of process, and So

Jordan Sadler

on kind off of And I excited recent because of and Or you the side, operators. of guess, very read the your sort flow performance we do the sort a of seeing XQ skilled by curious Are implementation underwriting through? how post lot people that? these of about PDPM are

Clint Malin

No, much skilled we us Care portfolio, on. seen side - focused the deducting seen that's in with we've of haven't Preferred market the properties. not what because are the that we've as as a - us And nursing opportunity older lot on been really not

finding field opportunities. seen look opportunities as They continue to fit continue to nursing. opportunities. haven't invest It's we're to of supportive of the the criteria, we but that industry So our very lot skilled just right in a at want many and skilled

see flow from deal market now, right was the that to implemented. PDPM just think in I

in skilled to we'll to of XXXX, course So position are that the a come during in deals interested see on I side we market. of better the think volume nursing whether be the


Vanacore Chad from comes Stifel. with question next Our

Unidentified Analyst

of early centers is This catch-up cash senior Congrats for payment on this Chad. quarter. on from [indiscernible] to receipt the

you for have potential was remind possibly think other if or for positive that us pending I see the guys any as release, XXXX? you could payment Could you that surprise.

Clint Malin

Care? to Senior Pertaining

Unidentified Analyst

just Care, guys you to, broadly restructurings that recently. Not the other operator no Senior prior did? but Or transitioned you know, you any that

Wendy Simpson

[indiscernible] your disclosed model. nothing unless already and probably Nothing No, it is that but would hasn't in doesn't that happen. been

all a we press gave the I receive. of track. X-year on that currently, is think were the in release, we Thrive And expecting rent transition detailed to projection

to no, that believe So won't that. collect that there's us we nothing leads

Unidentified Analyst

you Thrive. Yes, mentioned since

looks release second cash the guys see anniversaries over. that with quantify Could impact took you're life it in like for the So structural some half? the going various you to from on the operators

Wendy Simpson


over For prior this it's the year, increase $XXX,XXX year. about

yes. So,

Unidentified Analyst

I buy. through other Okay, that's helpful. is walk my I the Could XX-year-old end question XX, think What you busy buying like the and you're this $XX think it about capital us how year current in Michigan looks of additional on And And assets? working you million It through rationale the which about in level in are And occupancy believe is - yes, you million were when the million $X the should for the year. CapEx? asset return improvement bought you you're guys the X? for committing we coverage transaction? $X these,

Clint Malin

a Well, prepared for to our is we've we opportunity marketplace presence. a built organization. on found for interest and really this is, in - in this I that Residence project years remarks opportunities a Randall a relationship that number looking we has my an mentioned a Randall been with of as work Sure. And in that with building been Residence - now

sense this. So to of made a that partner with them lot on

buildings We've a on the a the about were Although in and basis opportunity good of regard for got so condition. - mean, The a the on X.XXx, I on we Residence. think in buildings buildings. XX original construction growth underwriting older felt committed the lot date, bit trailing it these capital we to point with into fairly is little this the coverage we've entry Randall very is investment, comfortable for additional

lot of move us sense made this to it forward, transaction. for So a

Unidentified Analyst

Okay, ask more. I great. one If may just

I wanted follow-up Texas, but Jordan the in I think to - so specifically. pipeline, about asked on general,

another regarding has and particularly that positive the HMG more discussion reading in which standard changed was in anything mean, recent Texas, the opportunities, SNF Healthcare. underwriting MPAR in given PDPM, Are seeing on I initial made state? acquisition your You you Texas? on

Clint Malin

a Residence. I - back selective relationship Randall to We've mean, to this again, goes similar we've Texas. seen in been

opportunity. Randall we've we've we mentioned with relationship As of years, we, number of principles a Residence, And a evolved finding just them, sense in discussed us. comments, on portfolio over our to in right had that lot I the in transactions why long-standing of of conversation it a the for like made lease and HMG. the the working in we HMG This tie-in HMG, and found with with my been my I building comment, a and

Nacogdoches Geographically, hour, X apart. probably are Longview and X.X about hour

So point a an it's - it market for transaction. entry to as really this developed great just and off HMG us And was partner together.


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

Unidentified Analyst

on This newer portfolio. mentioned a the is Jason relationships for the know XXXX Mike. in to of that lot you I forged relationships were

So another you underwrite underwriting existing just on turn new you question. versus you touch relationships to Could growth? as how

Clint Malin

new the operate of Sure. time organizations, models, and develop business spending those in various markets. with understanding is organization, lot buildings touring their relationship A their with they underwriting that of relationships

HMG, So models, over really it's their case of I've said of Randall corporate been getting an these period understanding other philosophy. evolution long it's time previously, exposed and in staff of their office, their how a the companies. just to they of buildings, And as

So these over working it's process of with time. an really organizations engaged

Unidentified Analyst

And Preferred quick then asset. it. on a just Got that Care one

So the valuation behavioral prospects? what as do for does data asset a remarketing

Clint Malin

from a transitional different necessarily just behavioral population. not think the cash just valuation flow asset. I for is model it of looking and more a straight profile a changes basis. They're flow, a takes don't of more the know carrying the than I on I cash it if mean, operator skilled the

that base, we the think focus on have this assets opposed different to building that operator you a So sold. we I as other just


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

Piljung Kim

use On year, your for from assuming proceeds far the you guidance dispositions? Care are the what of as Preferred as

Wendy Simpson

the down paying assume We line.

Piljung Kim

are assets cap older mentioned trading you an rate. Wendy, Okay. unattractive

could means that's you that as of far or if and cap wondering CapEx? as not what whether was after rates ranges or I So elaborate before

Wendy Simpson

it we're rates of Ranges the to we on that depending XXs and at of and type in we're the or than X.X% rates cap that be XXs. are, are assets, in the much looking down cap at would that, X.X%, assets buy the higher the could looking if

So even can't we're that money just - just rate. spend at we

Piljung Kim

SNFs? And that's for or - is this AL

Wendy Simpson

that SNFs. For are SNFs we ones the finding older are ones. the are

done probably sector, doing For Michigan in that And as - lot there's that a development an to just product properties get. can you not new unless the that if Pay lot you because around we underwrite in of trying or have recent And X%. the money can't really get was have the marketplace, a improve the ALs, they're you Private just X% we're that the older the in or couldn't at at property to of we put price and seller looking successfully. to in the broker asset

level. Private we So lot were in older there's Pay, properties looking they XXXX. But been I that a - lot in of yet. at X or older or a older saw at of and were Private Pay haven't Pay Private X XXXX that being sold

Unidentified Analyst

or lease that all But Brookdale have have you changing you? as at year far And was escalators the with be expiration Or as in annual been you requirements? as they as CapEx it would this outcome negotiating likely them terms renew. the the would with Clint I Okay. believe that of wondering, of mentioned any far been contact

Clint Malin

the it with - the to own right regard in had wouldn't fund active their with buildings. improvements capital discussion with a We've had into that But spending been and open evaluating them buildings. we our and typically let something their they in finance would but negotiating capital they're and - reinvesting interest we've proactive very them Brookdale, then in as really them. whether that on we and in own want Brookdale. with been they them. appreciate engaged have very Brookdale's or know And been we've Brookdale and - in at any own. that, available to looking their I and into we've communication making the to operators it's buildings necessarily active with them, capital financing we say the actively relationship improvements look I at us mean, their with and looking about But conversations at have approached us

Piljung Kim

EBITDA And what of the portfolio? was coverage that

Clint Malin

on us believe specific properties. are that my very they prepared leads probably coverage lease, to We by mentioned portfolio, haven't as it's healthy master remarks, which that coverage in renew the to a the given I likely


Anderson Our question comes with next SMBC. from Rich

Richard Anderson

here. a just questions of So couple

from you perspective, due mentioned Care, past rents. got a First, modeling all with you've Senior your

recreate there is run $X starting I Is as it? the adjustment, handle - an Do way the first a take fresh? of in quarter? out and assume, right to million that rate sort So the to start I

Wendy Simpson

revenue $X.X of don't rate, take take rent. XXXX. of that because costs million I reimbursement was get the off, revenue, your because was rest XX of in Of months think going that legal million, some run $X.X and The rent off we're to But G&A.

Richard Anderson

Okay. Fair enough.

one the for, going and way something operator. obviously, their you another, sort process, a Care run about miss your things or is one outcome Now LTC good them should of with a of and through for hopeful with Senior talked is prepared you're another

to Just game if you if curious place do about that you do if extrapolating all? thought I'm choose them you're they don't? but at with I renew, those what in So they equally which plan prepared? Have Brookdale, contingency assets not you you said what plan might to expect have mean, a you to?

Clint Malin

financial think through thought if a portfolio, would that, not Or us. renew be definitely is that they to enough. and strong for likely I the Absolutely. elected most the We've coverage pickup

Richard Anderson

assets mind, net a senior A Okay. high me. It's housing Good about talk enough. And then pretty in for thin coverage of last lot lease the peers investors. space. of on in your their lot

lower guys that in approaching you tell aggregate have a where and gave you story But situations coverage there. good might one I have am generally of much you've You where Curious need meaningfully or - if clear to been sized wondering reset? any are are pretty is you that that Or you be - of you of now these situations, of where sort your through that numbers, you much are pretty now? some operator stand that all on sort issue.

Clint Malin

it guess, I I such as which Sure. would this. characterize

side, side, we don't EBITDARM side. anything the side. slightly probably Xx at And total on buildings. So which X% we maybe at coverage Xx the on on look have two the revenue our on are those on right it's of only for skilled have revenue, then skilled total when And coverage. under Pay That's just the properties, you X EBITDARM below Private skilled

So top, found I your question. guess, I on


with next Bernstein Our Daniel Capital question from One. comes

Daniel Bernstein

with So you, out are housing assets that - there's acquisition both the deferred there, understand a buying marketplace. on senior in CapEx side, of this just trying that the I'm has and finding kind of of significant the preponderance maybe are some what to and assets? you hindrance that actually to these for like so is but

Clint Malin

capital at got They be how capital the and to are challenging to assets. deploy able viable. the definitely needs them the properties to deployed be all Sure, asking that to for price able the to is we're need the absolutely. capital, There where right what's - in much looking to seeing the price point and be them but have and part buy we at competitive make situations

that can But investment So affects underwriting we are way our seeing can where need. going-in our for successfully situations this in operator coverage where be have make what to capital and we operate is to - we property. there price a profitable what the a our that is what

Daniel Bernstein

sellers that many to correct their CapEx And it'd say - not pricing in deferred are price? this that and be asking

Clint Malin


Daniel Bernstein

amount a the exceed in development, growth. I development out coming Okay. supply like down to Looks absorption then Thrive. we you look landscape in pretty senior Would there, significant starting stocks of development, you mean, ramping When housing? again, terms significantly. is up Anthem, did consider obviously And are at of

Clint Malin

mean, think down brought so. that don't I I we've Dan. development,

Wendy Simpson

up. ramping call it We didn't

Clint Malin

collectively... built we've But

Daniel Bernstein

a couple projects a year. year, Couple of properties X X projects Yes. - of or

Wendy Simpson

Right. Right.

Clint Malin

great development But investment. as grow and side, new on future conjunction development I partner opportunity the mean, develop. the a them opportunity look but Dan, Medical that they Skilled necessarily the can looking relationship Resorts with property Absolutely. us with where partner product that, Yes. a at Ignite to mean, on side coming had - is on buy building with out gives platform, this, we to to opportunities fleet at that, their able we Nursing not with on Ignite at new be in to being developments. private of And of though look and in and hope example on them the skilled a I we with a and able

online the it's organizations Ignite side, side on I you like Private going see Senior developed but skilled Pay that's So with coming development adjacent the be on independent development the project bought select Living mentioned - we may conjunction and living Oregon. that and with did this fields and Medford, in we We in project. with community to have and that opportunistic. to

development. look very give at can you opportunistic selective I and how in we So

Daniel Bernstein

flavor of in And Senior Housing. to question. be seems day, apartments, one It the that's last the the senior then

others. something well News doing obviously, towers, it's and rags, there

maybe, thoughts So initial kind product And would have interested you any of apartments? be at type, senior in? that on you looked maybe,

Clint Malin

one construction with spent of partner - Senior at in Kansas project have financed haven't time operating we or of We living. Wichita, that a on Oxford, that ours an actually looking do lot we

market. the but And a would long do we them with we as an look opportunity it's we to the on-campus that with assisted spent for look community But so and that a that at. memory basis, as far in have is care us space. underwriting, in on broad living same we time, maybe financed there haven't And something


[Operator Instructions].

question Connor next from Berenberg. Our with comes Siversky

Connor Siversky

any a Just divergence any on any that your I Are rhyme you seeing Or in happening? roster. in is earlier or rent to asked among coverage any - of more your there there? question tenants is on that's where tenant reason coverage? terms color a rent markets just little specific And

Clint Malin

plus a tax. some state, increases operators with increase Mexico. couple we We're X% change provider of coverage in have We've with in haven't a some seen rate implementation certain that in seen operator. markets lot that an I say of of of within New in any the with the Medicaid divergence specific state seeing the would we properties

So on... large phased They're still we've seen being some in changes.

Wendy Simpson

Right, in... not reflected

Clint Malin

coverage reflected yet Not metrics. our into fully

So that's one example where we're state. seeing improvements a specific to given

Connor Siversky

And of is really before, operator couple decades acquired the the it more it occupancy Or think mean, mentioned are in old. trends? about these you assets you was a I these assets recently affects then age of do of some that sense?

Clint Malin

as did due on in of through times come the and looked little operator. process, look a we originally our diligence the being in to it of in cash Example through acquisition and right I It's we And we're of appropriate The more acquisition the properties. Michigan I and the flow about price and started decline you're the going price price and needs, capital there the investing at where that process. competitive. buildings down buying make did that as point that discussion then at mean, the coming underwriting, the number price was at bit a

that we in and capital provides think the were achieve stabilized that feel through operation additional a the our reductions we deployed. coverage diligence, we attractive that were price So able operator that transaction us to for the and operator for really afforded that

to buildings operator. competitive make I for continue think we'll those

Connor Siversky


So I mean one last just - me. one for and

think in you acquisitions, forward years? terms older in looking So may of assets opportunities of mean, these some attractive newer? I do Okay. couple might partner rather still would next make of Or you the for be

Clint Malin

into capital No, back can put no, market, we entry of to on absolutely. building. It point operator what the the the the and pricing goes

and right that but to much goes from the - at be buildings older CapEx look back the absolutely overburden with additional got would we property to through investment it's need It the makes too rent. overall initial to the investment sustainable doesn't So capital, that assets basics.


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

Wendy Simpson

some from that your proceeds, Care. in conference note, say call you the getting Thank give understand We'll we you, you Operator. totally net have. focus on be we or But we proceeds, give proceeds more we to I'd we're includes next just giving like you when which will Preferred holdback. have to detail gotten

the - must that you without Preferred this any them buyers got buying You've indemnification. are understand giving

which fully of of escrow, that us. But instances, them holdback up. to returned be expect, are amount our period bit implemented, we proceeds certain quite that a in will back talk holdback So or have that it - about a we we net stays hold in

So of net possible to just that. million be dollars about additional there's clear a couple wanted proceeds. of I And

Pamela Kessler

net proceeds investment. venture And joint there's also the from the

Wendy Simpson

net Their Yes. proceeds Correct. that... from

Pamela Kessler

Those added need to together. be

Wendy Simpson

first holdbacks. I again appreciate after the quarter. and you, in you've We look all case, your all Yes, great the us appreciate certainly you any to have the and with spent But weekend. forward Thank a to time talking questions.


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