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LTC Properties (LTC)

Participants
Wendy Simpson Chairman and Chief Executive Officer
Pam Kessler Co-President and Chief Financial Officer
Clint Malin Co-President and Chief Investment Officer
Juan Sanabria BMO Capital Markets
Richard Anderson SMBC
Jordan Sadler KeyBanc Capital Markets
Omotayo Okusanya Credit Suisse
Michael Carroll RBC Capital Markets
Call transcript
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Operator

Hello, and welcome to today's LTC Properties, Inc. Fourth Quarter 2021 Analyst and Investors Call. After today's presentation, there will be an opportunity to ask 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. XX-K are and the to Exchange the most uncertainties with Properties' time, and company's Securities XXXX. the Commission recent risks detailed LTC in filings including These December dated from time undertakes reflect or presentation. to obligation forward-looking of the events reserve update circumstances or LTC these no statements date after this to the note, recorded. being Please is event to I like would Simpson. to now turn Wendy the conference over

Wendy Simpson

like Fourth I'd operator. to Quarter Call. you, to XXXX welcome Thank LTC's Conference everyone

and to Officer; Malin, Kessler, housing COVID-XX Co-President for the of and Chief continue industry Therefore, signs Joining Officer. Co-President impact intact. sustainable shows me today Investment I future Financial and our remains to are Pam and Chief care deal of Clint The that seniors believe bright recovery. but market pandemic, continues with a

that you year. am completed I As seeing are Omicron with others the for fourth put cautiously I today, variant the planned will by had process. I opportunities several is remain to speak the continue work, last on and cases excited year with saw down significant earlier recovery that highs now less allow to trending and we our this am seems operators optimistic. society, grateful to and investments our capital hospitalizations to from hope quarter in also I late trend impact my the a this the have downward we It to XXXX.

most housing population the care to to how are came seniors for effective and care pandemic. during incredibly vulnerable of proud nation's We ways find community the our together

stronger we we an out steadfastly completely were believe we come before. woods, as than the this and persevere not I are Although of will industry, out of that

care, stay President messages, industry stressed Parkinson, additional providers provided health other others. extra Medicaid and XXXX, April April that and support has rule, state state’s in care structural spent census the and the California, Since of recovers normal. CEO long-term Currently, government, the the audience an by Federal shortages to Phase and until to remaining whatever AHCA the payments term, substantial state long-term Among spoke emergency the recent with to until to level, public public extended focus end NCAL, to amount can to in to through X part with public see address lobbying successfully $XX it in identifying Miami, the health the and changes is $XX with extra road their X virtually yet by he operators to shorter effect. emergency with many ahead becomes The need only Federal I continued we billion conference as long of accommodate among recognize on of Fund. additional the the need each X-day point this deployed least elderly from about and stability at the received for months. It $X Federal issue compassionate billions when is a Until that problems constrained will continue states, outlook challenge. months the a remains currently quarter, be for some At who others, safe, Federal want needed add-ons stimulus every Medicaid tied time Federal to census mitigated. target like the Phase good for approximately middle for the We Relief In is help. XXXX, Mark be providers. of census providing labor that population was to for remain engaging create deployed not about for because state-run aid. staffing at Medicaid is it industry. the last remain Provider positive. assistance, North shifted adapt were to Federal X the a total assistance extended several have optimism eliminated, substantial the distribution efforts, somewhat Among March. steps others, belabor there the is At Medicare And with XXXX, completion some totaling are funds believes ways and made that would assist providers another among to was Medicaid of the with did the states payments began, the force. of and daily some In new ongoing we'll extended dollars pandemic time, changed, the allocated money intact recovers the state's reimbursement that and as the In for level, won't could billion. many support was to needs deal be of In a Carolina as time. our to manage sequester and for the the emergency, took Mark hope money in be government changes billion and growing fully the by will staffing state Texas, of waived, is the health X through in still at available could but until in rule states from

that investments $XXX.X to LTC future closed Speaking in the total. million funding commitments in we embedded in including transactions are QX, on specifically, closed

all of million, proceeds assets of which gain million disposed invested a we for of of $X off For XXXX, sale $XX million. and net in resulted $XXX.X

to is we care, of don't amount end needs-based transaction of continue into including pent-up until to in abatements million anticipate but more change providing close up quarter, to do see gains going deferrals first active become relief rates some demand we private and million, value an big the in We $XX for a to a expect occupancy by of and occupancy rent permanent. increasing, and which With month. the continue north expect healthy moving the pipeline $XXX have XXXX, the just of

virtually first SLC have no current portfolio and new Jersey. reason complete. former buildings in not of operators the New with of for They state X administrative Since Our like that in Lifestyle are await we their and in some licensure the properties, in address the XXXX. market we will building increases. of to at have we receive seeing the about I'd occupancy delay due health still to to the them. is progress continue as We happen made challenges adapted believe nature level, the former transition the The transfer the course. since have our portfolio quickly Anthem purely been has Senior reported to considerable questions transaction

XXXX, rent of the of us they to XXXX. annual million, $XX.X increasing made. in In Anthem proud paid have strides are $X.X We million

Anthem is expanding XXXX. agreed Our that note rent as care occupancy returns which We to expectation we that end states, continue see of sign. also communities I last million positive X would across month, in to anticipate new now $XX.X annual to footprint, several memory Anthem setting rents as next pay a permanent more the manage including their them. levels. to XX months, performance states XX of will pre-pandemic At they in X the is depending and to on

relationships towards earlier, discussed remains have continued resources who desire enhancing pipeline with the and building robust As new operators work and our relationships to operators we've to with existing I as grow.

call. mortgage later in X we Pam quarter, on more will details loans. provide the the During closed

which shorter deals to duration, be flow cash of We with that believe types strongly profiles. continue to reduced what believe are in represent risk investments, these we strategic

we balance $XX.X shareholders Additionally, solid in the shorter we share $X.XX sheet, durations today's to million. our liquidity quickly doing inflation of are as We ample of per can is which a that. during an market. the with act act to maintained With monthly opportunities, dividend important these just and quarter investments rate on hedge, payout our have

and the Senior end Care activity will payout from Lifestyle XX% the we our FAD payout in XX% target ratio former anticipate and Senior for our and or continue of the to fourth year. on during and from quarter quarter XXXX ratio decreased by Our assumed the payments rent fourth Based that of our the the decline XXXX. FAD was quarter XX% of approach third beginning investment XXXX to portfolios,

per does upcoming results. Our guidance anticipates first deferred other increase recovery any million of investments to from FFO the discussed. excluding investments I both for guidance the additional $XX $X.XX share, $X.XX the than include approximately items or quarters' This not rent quarter to nonrecurring already

Pam. Now, call to over I'll hand the

Pam Kessler

fourth last $XXX,XXX for of Income as compensation timing decreased higher other Property increased Lifestyle quarter mezzanine This funding mortgage and the to transaction tax rent from originations. certain escalations and Interest annual from was expense to income and former the the Total portfolio related re-leasing capital to from Interest joint charges. income by of revenue interest related former a the incentive Care resulting noncash primarily abated rent. increased were $XXX,XXX partially last increased the $X.X Thanks, comparable million and the increased transition due in compensation loan. compared fundings. income offset loan the income escrow fourth year, taxes. resulting for tax and to $X.X resulting lower from million, in year's related same XXXX portfolio, and was of receipts of quarter, than XXXX the quarter, of operators’ by to $XXX,XXX loans improvement quarter Wendy. the payment XXXX rental fourth G&A related greater lower Senior rental with to Senior expense of costs. XXXX from the ventures and deferred unconsolidated property

earlier, fourth Colorado fourth the memory leased diluted recorded Fully equal for provisions reserve per loan origination, partially reserve Net quarter as to during $X.X to prior care in $X.XX a is estimate fourth loan XXXX in property NAREIT increased compared million, credit available Our last FFO related decreased by was I previously to working balance. loan the share million losses loan quarter. quarter income impairment in capital and primarily originations revenue shareholders This due the principal is we $X mentioned Lifestyle. down. year's common to paid $X.XX Senior of an the record of year-over-year XXXX due mortgage the declines to Upon with year. charge loss X% to $XXX,XXX amortized offset a the

higher the higher $X.XX by Excluding funding. resulting and Senior due nonrecurring was $X.XX offset versus Lifestyle fourth items, transition revenues portfolios, and and from was share Care to loan abated of the loan quarter. partially rent in XXXX excluding mortgage Senior and originations former items, rent decrease, nonrecurring per to G&A, deferred related mezzanine The the lower FFO

Wendy during totaling quarter, As XXXX X $XXX.X originated million. the fourth loans, mentioned, we

communities, first units of X for The securing by loan bears X partner. million X% XX with and an at Carolina The secured capital XXX working loan provides a commitment initial assisted-living million and Carolina and by LTC improvements community interest of aggregate operated mortgage North existing an and an an investment in IRR This of $XX.X South loan with $XX.X for XX at the was X.XX% additional loan. capital in $X.X matures of an years. million the in

to funded a bears skilled This an secured date, the for of The the one was interest in to has X total, million extension mortgage loan term The construction $XX.X approximately a $X.X new Louisiana million yield XXX-bed be at various X.XX% of operator operator commitment a $X the was to generate addition in second loan care of regional by term and years loan subject million a interest a and loan loan conditions a loan mortgage by a with expected XX-month XX-unit at of for in in income In care with X to center LTC. approximately nursing X.X%. new satisfaction of is investments to option $XX LTC. a The with The includes memory a regional property. assisted-living later XXXX. are last and community additional loan secured a memory years. Florida to X million

XXXX. HMG, quarter, whom million to we committed end Care the secured properties. Clint remaining million our an investment and $X.X former additional of Subsequent transitioned up $X.X million. we with the September million for Senior on of quarter, capital balance the loan the to will X% shortly. $XX.X $X.X detail yield discuss million maturing of XX a our a of the availability funded During in greater XX, activity The previously we of current funded to working loan also operator $XX has

portfolios, Regarding expected I'd some our details additional going and forward. on former care senior provide to senior like rents lifestyle

third $XX,XXX quarter. Lifestyle X-year fourth receiving of X the $XXX,XXX X the second rent former we market-based For under anticipate buildings the Senior $XXX,XXX portfolio, and in and leases, the separate in in quarters, first in each remaining quarter the

expectation set in rents that Our we is more will permanent sometime XXXX.

quarter receiving the Care but this anticipate each and $X approximately any the the $X Senior of year former not transition the portfolio, XX For third million to from in do properties. we million expect the second fourth rent receive first quarter, in quarters and in

be the lease, the As amending permanent more rents. we year, of remainder would we move will HMG toward and include through our which extending working

debt Moving activity. our to

During ability unsecured $XXX the to option million. reduced extend XXXX credit $XXX facility million to a and aggregate the fourth the quarter, November we up million XX, of comprised loan a maturity million $XXX The $X its XXXX, million to The the $XXX $XXX and increase unchanged. aggregate revolving amended commitment is to extension X-year billion loans. agreement of remains to commitment credit and aggregate our from commitment term total

loans for X.XX% first annum respective fourth entered effectively revolving interest XXXX in matures and at quarter the our line credit. in rate term matures with their the term X.XX% swap term borrowed loan We to fix under XXXX. loan, in the agreements of million we second terms. per The the and $XX.X connection unsecured the interest X In on into rate XXXX

we $XXX.X under borrowing. to of December available million line. December $XX outstanding Subsequent our $XXX.X additional As XX, borrowed XXXX, had an million million XXXX, with we for XX,

the unsecured scheduled principal paydowns the in of on repaid our senior subsequent to $X paid in scheduled quarter, During an notes paydown $XX additional the we million and million principal end year.

million. us of Wendy ATM, cash Presently, million available million liquidity million dividends. on paid the have $XXX quarter, of common approximately ample we million $XXX.X of our million on credit and $X.X under As $XX.X line $XXX.X with mentioned, outstanding our hand, during $XXX available providing in with we

XX.X%. debt quarter, Xx, adjusted We enterprise long-term fourth charge of the to fixed have with and maturities solid annualized to EBITDA ratio significant of next coverage for a an At end the our the credit of over X metrics a XXXX debt remained real annualized of years. value adjusted estate no X.Xx debt

unsecured XXXX for of quarter estate will lower Although our rent long-term trend metric our debt we EBITDA than this leased to adjusted real previously Xx, during higher annualized metric to increased is from close properties the this below target anticipate with downs principal Care deferrals and sales potential and credit notes comments and Clint our shortly. will rent on scheduled discuss out Lifestyle, Senior senior with of my from Senior paydowns on our line asset abatements. pay I'll

that from of in provided we During $X.X and and in been the to provided deferrals In same receiving have January in the $XXX,XXX deferrals in of rent we fourth quarter, assistance abatements abatements. million rent subset us. $XXX,XXX operators total XXX,XXX February, small and a

have of rent and We to up agreed March of for deferrals provide XXXX. $XXX,XXX to abatements up to XXX,XXX

I'll to turn Now, the over Clint. call

Clint Malin

I'd update Pam. like by start portfolio. an you, former providing Thank the to on occupancy Lifestyle Senior

As with XXth transitioned former XX shortly. the of SLC XX mentioned quarter, the last we expected communities, I

XX, XX, occupancy growing X XX% at Occupancy increasing at XX% rent market-based to at these communities, For December XX, was XX to X-year XX, December the X at XX%, January was communities XXXX, XXXX. January for separate under XXXX, XXXX. leases XX%,

HMG, occupancy detailed XXXX. Senior has was which is XX Pam Care flat quarter December our to XX%, that activity. for compared investment from . of January been XXXX the to already the property transitioned For fourth portfolio month

for by LTC. and total their communities in will of well with will Montana, of purchase assisted an XXX the is units totaling completed term buildings. I'll and bear XX-month independent California other million fourth the Subsequent units interest investment to for the have X and discussing X-year the with So the $XX a market with quarter, of a that in we The Wendy of exercised XX%. on as million mezzanine extension option as loan IRR X% by upcoming a new investment recently care, own two end living assisted-living $XX Oregon memory secured transactions. a options XXX X The loan communities living, providing start mentioned at operator

We the expect quarter. $XX a of of net to value value sell second $XX.X end book have by them and million properties the million. for $XX.X a gross million The book of

second on XXXX in rent quarter approximately We sale million. million expect gain $XX $X.X approximate recognize the XXXX. Contractual of to is an for

current proposed It anticipate operator the $XX.X assisted in net to X close and in located termination agreed current $XX.X of community gross Virginia which million value expect book quarter. an which In a to of second sale a also million. million, sell approximate $X.X book we the worth XX-unit operator fee, to $XX.X $X.X the will of rent. sale, We recognizing million pay a living has for gain on value lease is connection year's closing. a with We million its upon

including month. XX in from an per with for term the new to will The $X million first of X to memory Texas X-year end rent previous to months. the Lastly, communities, care existing transition rent year. this master by operator we operator a lease The units the was have expect X

rent based mutually cash Thereafter, rent. on fair be will agreed market

$XXX,XXX expect in rent XXXX approximately of permanent set receive rent with more properties these from We cash to during XXXX.

our Before I To we until positive and a available to lease $X current option. XX underlying report under recently made We They exercise XX, expires commitment have Brookdale. whose date, had the to April properties their the portfolio funded on XXXX. move a numbers, December capital lease. earnings have for on discuss very improvements I'll million we renewal

which million granted available is in additional to capital have We commitment $X XXXX. an Brookdale,

discuss this currently don't indicator environment we usual the believe is it time caveat pandemic with I'll and performance that a our portfolio coverage Now at the given of good creates. challenging numbers the future

for quarter, portfolio last Care qualify our As portfolios I given and former mentioned the Lifestyle Senior same-store transition. Senior the no longer

was as XX-month using management these excluded portfolio. are X.XXx, for EBITDARM fee and coverage, from respectively, a assisted trailing our living they X% QX numbers. So and reported, X.XXx EBITDAR

X.Xx, and respectively. operators, Excluding by coverage stimulus X.Xx received was funds our

reported, and respectively. EBITDAR For X.XXx, was nursing skilled X.XXx our and EBITDARM coverage portfolio, as

and respectively. X.XXx, stimulus Excluding X.XXx coverage funds, was

and recent XX, our are for same-store to trends, of portfolio. as XXXX, occupancy which on January are Moving

us expedited data given to Our this a partners voluntary on basis. have and

So approximately and at the pay was are XX% pay providing private occupancy total XX% information XX% XX% XX skilled same-store beds. nursing we approximately of XX. XX% our September June includes Private at units XX, our of January same-store at and

XX% September XX% portfolio, monthly occupancy was skilled in our and in average January, For XX% in June.

joint As I more vehicles, well number geographically pleased value, strengthening mortgage new to LTC also as skilled and span private are nursing acquisitions, with including and development opportunities than diverse and our operating pay earlier, said loans. million partners. at $XXX are of The pipeline. we we mezzanine existing which span rate include opportunities Current loans in total are the partners as building a and ventures,

Our deals get ability regardless vehicle partners partner a the for operating to have a of done, makes LTC who of and strategic wants myriad needs.

strategy successful investment current way finance focuses strategy. and on a as during but to began structured a become void pandemic, fill creative the the products, which has Our

where Over the learned we financing development meets operates team have enhanced they built exactly a internal set years, our skill last around want great deal, X to a providing and business robust be. that

executed us and well will have We deals we've the the that identify continue and to gained. we to against close strategy utilize allow expertise

otherwise extremely new for provide ways be provide in lower and us stack investment to in participate believe but new type communities the and sheet these We premier balance generate such same with to fashion we interest in comfortable and At access operators solid the whom deploy allow which wouldn't our participating Corso built, income with Atlanta shareholders. in traditional the investments of opportunities capital we the capital lease to risk. ability this being provide able to meaningful as deals, business. are identify, continue We still as triple-net deals more us time, with to these in

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

Wendy Simpson

fourth the a to and and you, been a It's Clint. new Thank year. start Pam busy busy quarter

operators shareholders. we've we trying sales relationships solidified relationships reductions, working. strong our pandemic, asset LTC can currently have proud who and We've we deployed no are years with withstood we've new generated whom strategically capital of and for our only able have regional operators continued . enhanced with with but to with We strengthened put not and extremely X our what been have portfolio an accomplish. developed the to and dividend work operators our pay are to additional capital very of have that through Through

year we're right that our can by We the to do we who by sheet who forward to to as and providing serving recovery are right nation's we those to have is operators continue vulnerable for last, most Operator, grow. portfolio proven population balance providing questions. built ready we and want to take LTC We continues, making and to the look operators do financing committed the right the managed best, sure this financing have what with to protecting strong our by the properties. flexible solutions

Operator

[Operator Instructions].

first comes Capital Juan BMO question from Our Markets. from Sanabria

Juan Sanabria

no Just hoping, confidence or Pam the degradation cash in you guys flows. further or Wendy Clint, about material talk of level could

care annual had, You provider operator The out. tenants. particularly memory few $X it the care that A new a seems talked of around the like rents risk, peers skilled your the about in unit. nursing million of come tail kind was memory have of in some

So here level coverage forward. and that your here confidence we've just stay on going troughed should and improve curious rental stable

Wendy Simpson

trough. the call to as running feel I

to I numbers hope not think Senior expect to able SLC very be what contribute. during we're former assets. we've mean expect, what uncertainty Care we we XXXX, What they'll our And underestimating given because have we pay I it's is you given of they us. what and conservative the

properties So -- operator year sustain there just that the security we X to out market. were that rent. for And we The million transitioning, we're using of that deposit wants some $X are upsides. that had to last a be

period, lease-up this were time transitioned assets pandemic we hit. and those So during that the have at the in

of to the talked all operators. to highest basically, skilled of we've or concentration more talked the -- and important So our operators

pretty been they've for far, so XXXX. confident And

So had revenue I be surprised would really we a material hit. if

Juan Sanabria

Great.

tenants any there discussed represent that haven't a we the potential as using that to security other quick that Are after follow-up risk deposit you're Just that. previously?

Clint Malin

No.

Wendy Simpson

them we've all. after that's so] [And No. No. used

Juan Sanabria

Okay.

question is pipeline, the Clint. second The acquisition

kind your deals to And us are are that the give transacting point to a are curious, you predominantly, for of of skilled market. what where at, continuing deals structured if any confidence are talked sense are that more adjust at level and/or you about coverage or like some stay that not underwritten going here trading the but are or talking about forward? could that think not pricing there it yields on confidence for to we about out being metrics finance nursing your just range trading of assets come I But will that options.

Clint Malin

Sure. Well, think markets. I X you're seeing different

You're is seeing a lot come been the been market, of has older broker to for which of have deals. and assets what those appetite a predominantly that large type community, in there's

And so those they don't always get announced, but my guess is you're looking at cap rates.

to run So because buy a give you use it's hard cap what that. rate to do

buying do they So a people are on in forma pro their it what belief can . from perspective.

on interest assets is worked differ. portfolio those have assets Our in we as The new and our developing bringing older skilled properties. investing we've on and yields and sold in new on

X% we in skilled would range bring the low we're yield assets, newer portfolio. which So into for probably our nursing

Operator

comes Our next from question Rich Anderson SMBC. of

Richard Anderson

hear you me, Can everybody?

Wendy Simpson

We can.

Richard Anderson

All right.

Sorry about that.

sort point but you Do from of that guess back line fighting that the where of you're -- time? business, talk And getting that? a and sense to is fine wave and saying, life when the force state and always that able constant people on, aren't I getting you you about you world back business in was getting COVID of the was do support get around declining And same Federal feeling is -- but this is that that have kind guess at we the fighting guys don't just tape I? I about to luxury. to sort there's I so sources. better as kind So you're of your continued and and perhaps

Wendy Simpson

are. Well, at we're fighting but operators office, not corporate it the definitely our

the about... theme I think Rich, important

Richard Anderson

funds, them difficult get the to point? more is my making it hands saying, on I'm What environment for their is

Wendy Simpson

get Well, Yes. They're like in check. our government their to that. the doing, looking into we've government additional be to they're in But as manage out as funds couple for Yes. they to their this. hands the on through not talked next check they'll labor be seem believe their years. And supplies to go last things government subsidy or that food they it operators put the can and looking they but and inflation not for have of It that is. really and related business for don't the check were concerned they're to overpriced

Clint Malin

too, as assistance belief, inflation have rent Rich, government subsides, to mean, groceries. are the far going and there's as to that to look I think work going I is back as at people

as think to so at is, of through the the is come hopefully, a workforce, people belief looking how motivation And for go into are XXXX, we it. there's lot I back -- think the operators the I

Pam Kessler

expense more. if rate pay private the the and side And standpoint, muted side, this momentum occupancy there's of effects, side the on people on the increases good assisted been the labor in this been side, on I year I quarter work, little there's living a should fairly momentum And far quarter are the think to with first increases. have when think market. a the said rationalize get from back of the the mean, little Omicron was so so year I accepted increased costs. But you as, fourth which that and because primarily Clinton, a then the

or rate a costs residents increased increase. understand of think cost and they understand labor the across I and residents and increased families the board,

Clint Malin

agency I And agency as that of cost which usage of well, the that forward, agency will think and help the reduce usage, has hopefully moderate staffing Rich. will going of hopefully, usage plus skyrocketed,

Pam Kessler

it pace And then there's of momentum, have the put variant kind start But get It's same they been of on some elected and been time in sources not housing. senior on they've seems pause. upstarts, There occupancy, which too. every of a like to increases side, boom. referrals lot the there's are at a in have had, as traditional been skill been postponed

one experience the side X little there's housing. same And behind that a that to us, been occupancy hopefully, and will have not Omicron has to a we So senior now new fits start that gains more starts. that and

Richard Anderson

XXXX, Unfortunately, I'm that in the that stealth how for funds? billion Or a flash it's hearing source thing The hopefully, you're out. see is Or that? in pan. well, about this what $XX of combination? plays Federal? that Is are the we'll that new state But a Omicron that's -- hopeful

Pam Kessler

Both and Yes. Federal government states.

Clint Malin

Yes.

Pam Kessler

Yes.

is a part directly. and second first The add then the And have have yes. the and on, the the, pushed Federal kind out the the states it's of of lot government states of money COVID, allocated, it's sates as pushed to part

Richard Anderson

Right, right.

So pass-through, say. would I of guess, it's sort a I

Pam Kessler

Right.

it's has I quite that lot. important in that's because emergency a think though, health helped nurses to April the skilled continued,

Richard Anderson

around doing was is in world A some operators being you staffing bit staffing mentioned guys the What Can efforts more the of obviously, little shortages, around specific? -- question, a are narrative it. are you finding the address to mentioned are ways to undertaken it for country portfolio? address that be the least. your shortages And you at

Clint Malin

looking they -- increases, it's at wage to inhaled. let's obviously, Well, compete, are

in can into consecutive Because big operators through attract do been how that to that item initiatives something and just have accommodate labor is I trying really listen they in schedules, we interest providers as as looking an flexible workers we've be as flexibility heard be state understand for operators accommodating they caregivers, that specifically how translate buildings trying focused add-on trying step how more that helpful. talk skilled big as to Michigan wage at, a split, direct whether is other lot attract and scheduling Michigan, is to schedules. it, can increases, which have far through they a providing You about. on such and would how staff flexibility to benefit beyond it's know to expand is is a which days, their

Richard Anderson

and moved for talk activity Last just It's point of is some maybe the also of simple a the to finance there. on real buy building some opportunity reflection a of opportunity as fruitful bricks-and-mortar I'm me. that fee the But well today. and is asset Clint, Okay. of is curious loan guys loan expertise good. all or that the if estate you have about interesting business up less you kind business view? just because not picking structured

Clint Malin

has operators been that more challenge. been has our -- rent a challenge the further go to been acquire of to assistance, value-add. we've And rent -- date, to Well, of had some assistance provide something needs opportunities as to and buy have the

in finance just we because most us, reasonable to acquisitions So stack, it's at loan-to-value for ahead of case be now. into we're my date, generate loans. return we which risk-adjusted where But very active in that think we -- that. I meet there's we the hopefully, us to prepared mean to mentioned otherwise the a from turn Because in acquisitions. going for on or a if lot remarks. focused we're be companies for structured able equity way slipping for to mortgage wouldn't part, looking a for better able that's I it's And on and We're capital the a of there'll market. business the the opportunities

got out us development a active. looking so And just broker business And for opportunities. it community, with that's we've team makes more working the

will hopeful are that going So XXXX we be opportunities. into there actual acquisition

Operator

next of comes Jordan Our question Sadler from KeyBanc.

Jordan Sadler

the Just items a of couple some wanted surrounding to circle the of properties. on up transition other

about scheduled I Randall expectations first, basis. those. believe the guys bumps surrounding think so I those So first quarter. But -- anticipate like recognized Should still properties the on those SLC, are what a on X we portfolios? being guys and cash Encore, touched and to there are the you on

So bumps push expect if will you those that. first And that then quarter? should we through second, could the in confirm

Pam Kessler

they Jordan, be pay are able we they're are on that no to payments going scheduled. to their not a basis, they to and believe rent have yes, cash as and Yes, -- reason

Clint Malin

entire initially that rents, hopefully I Jordan, as occupancy time seeing -- increases, for Randall. number was intentionally And are which we over to we increases. set Occupancy to gave, includes increases that occupancy it to we Encore, when that's the track associated

Pam Kessler

portfolios and they're mean XX%, I occupied. halfway year. now in low close stabilization. to transitioned the great They're are XX% this Those made Yes. strides to they've

trajectory the good. very is So

Jordan Sadler

they I of good. think seem heard I numbers, Clint, stat? right to XX%, up those pretty end said the Can -- the Is you XX% that January. by you

Clint Malin

That's correct.

Jordan Sadler

as when And of? was XX% the

Clint Malin

as XX/XX/XXXX. of It's

Jordan Sadler

Okay.

pretty So up okay. good Any and -- they -- picked some occupancy.

to that come the I sense then be of other What California. million sort was sale? Why So And think we've X a separate repurchased, are of question. often repurchase slated situation one the Those in. was that least $XX.X sold? on in the supporting at got the a bumps should the assets

Clint Malin

the And there our want of during may growing you just looking this and a don't It be at grow. portfolio operator, years intent come we course of number ago the investment was to the not with we're just an as pandemic. looking fruition see with that it growth hasn't and made operators opportunities, where mentioned, evaluating growth and for Wendy we're of to

And this on yield. and effectively selling X% so was we initial X.X%, a have an we're opportunity to yield sell that at our investment

don't premium, a of situation little operator redeploy capital. to we're we with an where it bit gain, that and sell getting growth see yield for opportunistic we a have recognize an can effectively a we the better it's a and So

Jordan Sadler

the That timing one sense. And makes that on is?

Clint Malin

end California. By X as second the in the quarter, the of same

Jordan Sadler

are sort and there's the first Okay. us March, through just happening little what on type bit what sort many type the the tenants How already you and that the And then facilities of end that continuing of into that is? to? those And deferrals basis? a of tunnel quarter tenant of sense abatements light a agreements or deferral it is? can lastly, Or of if pertains give on of at the

Clint Malin

can say, would completed of probably HMG, quarter-over-quarter to And operators to find we've subset XXXX. to as I as course of of resolution during you try it's some subset and same focused in as senior of private all on Well, imagine, care transition we've pay. a operators, the we're this our mentioned, capacity

of this resolution of ours in type some So forward. bring it to is now move focus and a

Wendy Simpson

have those we assets. no revenue for Because

for revenue those our We no in assets have projections.

upside... So that's an

Jordan Sadler

Okay.

you are and all deferring abating -- the rent assets, to a not fully You're of portion? related these

Clint Malin

Yes.

Wendy Simpson

it's an upside else everybody as recover, for recovering, they as us. is But

Jordan Sadler

I assume mean, should these assets. information like I so are there so pay, all you those from getting -- are you it Is probably seniors housing -- sounds

Wendy Simpson

cooperative. Yes, it's all

Clint Malin

Yes.

Jordan Sadler

So can on of a the what's occupancy those? with happening you us give sense

Clint Malin

been has occupancy of Actually, growing on both as recent.

So sign that's that some there on upside a occupancy. positive been has

Wendy Simpson

that. covering both They're

Jordan Sadler

Is is in the or...? XXs there it level, like a

Clint Malin

-- generated the that, level property cash the at are fee. I being but specifics covering provide operational don't the on to standpoint, is have from management a flow they operating expenses a and

Operator

question Okusanya next Suisse. from from Our Omotayo comes Credit

Omotayo Okusanya

to at like deferrals of Jordan's abatements. around do seems of When deferrals as just line it presentation, continue the on wanted million of about and the February, of a take we questioning $X.X I And of tenant. decent if I million correct $X.X at that are it's kind Am of tenant assumption? least is who in reference about a to and in X amount so, of just because that look deferrals?

Clint Malin

of we at a Well, subset causes operators mean, I of trying a actively I but operational an more as we providing matter, appreciate it wanting but small bring is are... a to can potentially I it's of And small engaged we're operators. name, us level. that to operator, subset said, to an to challenges name provide the And mean, in a resolution

Omotayo Okusanya

Is it top XX tenant? a

Wendy Simpson

no. No,

Clint Malin

No.

Omotayo Okusanya

Okay. All indulge you minute. me Then if just right. brief That's helpful. a

tenant of tough of you alluded just that and and senior improving kind looking guys rent kind to seen on in on? little kind a what else have that but there's generally housing all tenant to are know as worst here. to deal. you've coverages kind messing of bunch let Could coverages the at end you The see So going you and Could still of another -- feel you're of occupancy -- earlier comfortable let Wendy know us rent point. portfolio, shouldn't ascertain of major this issue, are factions else and credit, us kind at a what not you skilled you the you

Pam Kessler

over focused coverage, and we're past that the on XXXX. coverage our the in February we more talking supplemental about is Well, on is third providing are we spot we're than quarter, that mean we're here X and historical. years I in from which calls looking occupancy at something have the our said we're

to then our and operators. occupancy So talking obviously,

Clint Malin

mean we're new Omicron place. is its that taking haven't just seen I’d we and too. staffing, say of So variant regarding Because out now coming -- I

standpoint just come that a into big from couldn't people challenge new staffing where So a buildings. the was

So that's admissions you moving staffing emissions. that into now are to slowing halt staffing we've And challenge if to some operators Hopefully, aspect as heard step because stabilize. on helps a -- XXXX. right led a we say, have or

something from we're So affecting occupancy if then you allows hopeful have don't staff, you the maybe the further in. to variant that challenge is increase

Pam Kessler

second Which really points quarter XXXX. the to of

the increases I I the with for living fourth be first think to mean, And hearing going -- your agency. a trend, you quarter. more and just from and if from operator. quarter, skilled tough of -- also. in coverage say, is It's from on of increases, living living, keep you costs and hit normal assisted happened labor level second the assisted know XXXX fourth year the good. But in can first operators occupancy building rationalize nursing all it a lot And I the mean, were both temporary was we normally, okay, and agency you a on assisted more given don't the hard you're the looking of see we're this know quarter. we pretty quarter quarter that our toward those sides, then using what really

Operator

Carroll comes RBC. question of from next Michael Our

Michael Carroll

of gone a rent about and if I statement bit little a transition in so talk providing you can you bit half the want a has you little And kind I doing of of can mean, to clarity stepped over wanted provided you taking second good on portfolio? that how a HMG. color job have you're kind the some provide I fair see more that that to looks in far. year. it with that that that this they receive of is kind are like

Clint Malin

Yes. of buildings. front the just effectively tremendous in I in. there's distractions cooperatively. culture overall, having previous mean, obviously, smooth build very them. The in operator a job staffing of coming They're HMG a different little of gone the transition has has no, to think really these And disruption, lot and had initially. done But variant with a

just processes, occupancy, things hiring and taking HMG with the the it's facilities to able grow so part of that their leadership culture at process that. And teams of working be like to the

buildings, good think a I been far. you obviously, doing job about on we've I as HMG we've given on with their obviously worked know the very well. is HMG And guidance so process. thoughts And which it's great tell that fact can So these a

occupancy what gone more flow it So there which and has it we've positive as a feels a but it's we're be level like communicating a lease. could course Obviously, the Wendy this than guided HMG over didn't. mentioned, what because will as achieve. that to, with And transition they disruption, cash stayed of And their can flat, we're is have down the we belief the hopeful, XXXX view that fact is.

that's -- positive. So we're a

Michael Carroll

the some And mean I what then that is about happened? can in talk went assume there second rent is that assumed growth is assumptions into today? achievable just occupancy year? those of Does it numbers? stays that's those the that Or you where half in if

Clint Malin

came during there occupancy I It's level usage agency of of in before reducing -- impact of although costs, last was had growth numbers. some the high some the being was HMG they rationalizing reducing There agency saving over few will some variance, an usage the agency the that usage the and utilized a months in. mean because just there expense be those over was but the is of XXXX. really

Michael Carroll

fourth draw Is the about bit typical capital the Okay. the their in costs And platform? talk creating little working that can then portfolio in them you just What a into loan? that was for quarter? for start-up

Clint Malin

which this if going having circumstance to But do line operator of not chose is And can transition, Medicaid want billing typically for there's financing. that is Care case, not of you that. HMG Senior the provide would parties delay do Medicare agreed because to money which from typically HMG. Senior you typical. Texas, lender both the in In would get purpose of in the this well, then typically didn't a in is previous to that have No, money bill Sure. transfer you was with -- a Care this services, State -- to and HMG the AR that the

contracts. started care financed They -- for got Medicare revenues They're effectively billing they've and working have Medicaid for Medicare. the They tie notices. some all Medicaid. their buildings with on providers we've for So managed

that both you're frame, time of a down April Medicaid to in to line. the think March So flow, that funds to see we Medicare significant pay on amount going probably and

into third-party line this, when really on as the the the introduce to it at through a purpose reimbursement there's in going we we complication going execution because no made which knew much settlement, the added the that's moment of available transition. lender just the we So because too were

can expect we traditional we can to to frame a in more in receivables. the back number. then place point, seek normalized lending for to March yes, line to paydowns a keep HMG get April the that So while ABL time at or third-party see the And for

Michael Carroll

the guess, sale drop I prepared talk thinking just second Okay. in how proceeds I you're And today? that quarter remarks last Pam, can with your about then leverage in you question. heard I know that's the about do and are significantly. expected concern. deploying should Or think recovering, much capacity you comfortable you rent you that mean also debt? that I our the capital would be fairly number have that before how now using

Pam Kessler

level ratio, rates, out over not could or bit we floating to We proceeds, debt Xx -- permit through long-term you short-term how either interest Yes. through fund And pay XX% issuances sales to of get I from for -- -- want would we comfortable we've debt, and that's I'm we would crept conservative. the a sales still of debt-to-equity debt, debt ATM rising back to more and still we assets with because and as we much the look typically have little the revenue equity is with take sure But do. term period that. time. long-term like these a long the out more year which that get with then debt, go and -- down we through we'll

this historical are be going focused to our our more norm. efforts leverage back So on year to getting

Operator

is KeyBanc. Jordan a Sadler question follow-up of last Our from

Jordan Sadler

memory facilities being transitioned. that care are difficulty] [Technical

mentioned in tenant there it per last the yet you issues were quarter, to were deposit think ball this using you your rent. seems se pay and other from the So I no that crystal security

and played what retenant tell maybe property? you So to last XX to us cause just the you core days out can -- how over the change

Clint Malin

were we working the with Well, operator...

Jordan Sadler

be -- sorry. you Would

Clint Malin

to not core do can have far And So not became their does challenges. that operator do pandemic the clear to over sometimes trying markets. or our and the got their sort present move we we're operate them. as don't And in transition operator you of they And committed in that markets, are of to And wanted as just as end course lumps -- in the fortunate can for and was where evaluate geography a with a that exit. wanted not them, that's the that. operate core the -- buildings operator to in decided stay take an exit. an it's learned they we core in we're operator it's -- an operators to action market portfolio we these have that XXXX to what buildings that working better we that and just not to And core they to it of they those are closer had forward have certain it's to the

Jordan Sadler

And just maybe perspective, this for from one's Pam. a modeling

I booked zero the... how you you'll think and $XXX,XXX then 'XX. them to $XXX,XXX XXXX just XQ? $XXX,XXX and going going Or You And of XQ, I said the from it understand you're But for second then the is reset in then in how fourth to rent book and quarter. want kind a for quarter in to flow? the each quarters of first

Pam Kessler

correct. Yes, is that Correct.

Jordan Sadler

in for the zero book the you first said does come you And X the actually, How $XXX,XXX fourth months. Or through? $XXX,XXX did quarter?

Pam Kessler

bit. little a up ramps It

in -- quarter. Yes. $XXX,XXX we booked the and So fourth

Jordan Sadler

ramp? December be will it through May gradual So a of sort

Pam Kessler

mean gradual. I yes, -- Yes.

Clint Malin

increase in positive. Good properties, thing is is we're which some occupancy those seeing actually

more And so yes, back. it the towards will be

Operator

waiting I this for pass closing over questions are remarks. there conference Simpson As time, to will the Wendy at additional no

Wendy Simpson

you bye. a talking the we you joining you. hope to first Thank Bye, today. look forward have for quarter you to all because us shortly. great all and I soon Thank weekend, very ends

Operator

you conference today's Thank call. concludes your This participation. for

now disconnect may You lines. your