Amid a flurry of fourth-quarter and year-end earnings reports released this week, several senior living operators and real estate investment trusts announced moves aimed at harnessing long-term growth, diversification and profitability post pandemic.
Brookdale Senior Living
In a move designed in part to position Brookdale Senior Living’s core senior housing operations for sustained growth, the Brentwood, TN-based firm announced Wednesday that it had entered into an agreement with HCA Healthcare, selling 80% of its equity in its healthcare services segment. Brookdale President and CEO Lucinda “Cindy” Baier called the HCA transaction a “win-win” and a “great alignment of interests” on the firm’s fourth-quarter and 2020 year-end earnings call on Thursday.
The firm also reported that its fourth-quarter revenue per occupied unit increased by 3.9% year-over-year on a same-community basis and the sequential occupancy decline moderated in the quarter as well. Liquidity also had increased to $575.5 million by the end of 2020, including the effect of cash received from government funding.
New Senior Investment Group
A significant strategic move also dominated Thursday’s fourth-quarter and year-end 2020 earnings call for New York City-based New Senior Investment Group. The real estate investment trust announced that it will transition the management of 21 senior living communities in its 103-community portfolio from Holiday Retirement to Atria Senior Living in an effort to diversify the operator mix in its portfolio.
“We expect the new relationship to provide us with additional perspectives and best practices to drive organic growth as well as establish a new partner for potential future growth opportunities,” President and CEO Susan Givens said on the call.
The firm also reported adjusted funds from operations of 71 cents per diluted share for the year, above the midpoint of its 2020 revised expectations.
For a more detailed discussion of New Senior’s latest earnings call, visit McKnight’s Senior Living.
Diversified Healthcare Trust and Five Star Senior Living
Although the COVID-19 pandemic shifted strategies at both firms, executives at Newton, MA-based Diversified Healthcare Trust and Five Star Senior Living expressed optimism Thursday during fourth-quarter and 2020 year-end earnings calls that the vaccine rollout, along with slow inventory growth moderated by 2020 construction slowdowns, will drive recovery in senior living communities and in the industry.
“Sales leads, which have been an historic leading indicator of move-in activity and a key component in driving occupancy, are 83% higher so far in 2021 when compared with the rolling four-week average sales leads at the beginning of the fourth quarter,” noted Five Star Senior Living CEO Katie Potter.
DHC reported fourth-quarter earnings topping Wall Street expectations, with funds from operations of 9 cents per share for the period. The REIT also reported net loss attributable to common shareholders of 7 cents per share. Five Star reported fourth-quarter total management and operating revenues of $53 million and net income of $2.9 million, or 9 cents per diluted share.
For a more detailed discussion of DHC and Five Star’s latest earnings call, visit McKnight’s Senior Living.
Thanks to a newly increased revolving line of credit, the Pennant Group is armed for a year of merger and acquisitions activity, although it’s likely to be mostly within the firm’s hospice and home health arm, executives of the Eagle, ID-based holding company announced on Thursday’s fourth-quarter and 2020 year-end earnings call.
“This amended credit facility improves our long-term capital structure and, together with our strong cash flow, expands our ability to continue growing our portfolio of healthcare operations opportunistically,” said Jennifer Freeman, Pennant’s chief financial officer. “This upsize provides us additional access to capital on better terms and at a critical time as our strong results and capacity for growth intersect with a robust acquisition landscape.”
Pennant reported GAAP diluted earnings per share of 13 cents per share for the fourth quarter and 52 cents per share for 2020 overall. It also reported adjusted diluted earnings per share of 17 cents for the quarter and 77 cents for the year.
For a more detailed discussion of Pennant’s fourth-quarter and 2020 year-end earnings call, visit McKnight’s Senior Living.