Seventy-five percent of Invesque’s properties as of the end of 2022 are senior living communities — independent living, assisted living and memory care, Chairman and CEO Scott White said Thursday during the publicly traded healthcare real estate investment company’s fourth-quarter and full-year 2022 earnings call.
The remaining 25% of the portfolio consisted of skilled nursing facilities and medical office buildings, he said.
“This represents a drastic shift in portfolio composition compared to where we sat 24 months ago,” White said. “Invesque remains focused on executing on the simplification plan [to move to predominantly private-pay senior housing], and we expect continued progress over the next few months.”
Last year was “transformational” for Fishers, IN-based Inveseque and the momentum will be ongoing throughout this year, White said.
Feb. 27, the company entered into an agreement to sell eight skilled nursing facilities in Illinois for $125 million. The transaction is expected to be completed before the end of the second quarter.
“Upon completion of the sale, the company will have only nine skilled nursing facilities remaining in the folio, and we anticipate that 80% of our [net operating income] will be generated from seniors housing investments,” White said.
The CEO said that the company is pleased with its senior housing operating portfolio, especially the Commonwealth Senior Living portfolio that Invesque acquired in 2019 for $340.4 million.
“From a finance perspective, 2022 was about de-levering and de-risking our balance sheet,” Chief Financial Officer Scott Higgs said. “Between our sales and organic cash flow, our team had strategically allocated cash to repay debt and streamline our capital stack.”
In 2022, Invesque repaid $133 million in consolidated indebtedness and $53 million in joint venture indebtedness. Over the past eight quarters, the CFO said, the company’s leverage has been reduced by approximately 450 basis points.
“Consistent with the strategy that we have previously disclosed, we continue to retire both common equity and convertible debentures through our normal course issuer bid. This initiative continues to be among our best uses of capital since the inception of our normal course issue bid,” Higgs said.
In the fourth quarter, Invesque’s adjusted funds from operations were $0.10 per common share; funds from operations were $0.12 per common year for the quarter. AFFO was $0.39 for the year; FFO was $0.42 for the year.
Read more coverage of the Inveque earnings call at McKnight’s Senior Living.