The flurry of second-quarter earnings calls continued Thursday with updates from Sabra Health Care REIT, Five Star Senior Living and Diversified Healthcare Trust.
Sabra Health Care REIT
Wednesday’s announcement that Sabra Healthcare REIT is exiting its Enlivant joint venture with TPG Real Estate does not mean that the real estate investment trust is exiting senior living, according to Sabra CEO Rick Matros.
“Our exit from Enlivant was specific to Enlivant. We’re completely committed to continuing to grow in senior housing,” he said in Thursday’s earnings call
From our perspective, as much as we liked the portfolio, we’re better off moving forward … It simplifies everything about our company and our reporting, which we like as well,” Matros said.
Overall, from the beginning of the COVID-19 pandemic through last month, the REIT reports that it has collected 99.8% of its forecasted rents.
Sabra sold two skilled nursing/transitional care facilities in the second quarter for aggregate net sales proceeds of $5.9 million. The REIT acquired one senior housing managed community and acquired land for one skilled nursing/transitional care facility for an aggregate purchase price of $33.9 million with a weighted average estimated stabilized cash yield of 7.78%.
As of June 30, Sabra reported approximately $1.1 billion of liquidity, consisting of unrestricted cash and cash equivalents of $69.3 million and available borrowings of $1 billion under a revolving credit facility. The REIT also had $75.8 million available under the ATM Program as of June 30.
Five Star Senior Living
Five Star Senior Living continued its planned departure from skilled nursing, the company reported.
As part of its strategic plan to exit the market, the company closed 1,473 of 1,500 SNFs units during the second quarter and 26 of 27 continuing care retirement communities, and it has agreements in place to transition management of 76 senior living communities with approximately 5,200 units to new operators by the end of the year.
“As of July 31, 2021, Diversified Healthcare Trust has reached [an] agreement to transition the management of 76 of 108 transitioning senior living communities managed by Five Star to new operators. I greatly appreciate the contributions of our residents, clients and team to this transition,” Katherine Potter, president and CEO of Five Star, stated in a related press release Wednesday in conjunction with the call.
The company saw a new loss over the second quarter of $12.3 million, which included $15.4 million of expenses related to the company’s restructuring. The loss will be partially offset by $11.5 million to be reimbursed by Diversified Health Care Trust.
See more coverage of the earnings call in McKnight’s Senior Living.
Diversified Healthcare Trust
Diversified Healthcare Trust reported that as of Aug. 3, it had executed agreements with four new third-party managers to transition 76 of 108 Five Star-managed senior living communities to new operators as Five Star exits management of them to focus on large properties. Forty-one of the communities already have transitioned to new third-party managers, and the rest of the transitions are expected to be completed before the end of the year.
“We have executed agreements with four new managers, representing approximately 70% of the communities to be transitioned, and we continue to expect to complete the transitions by year end,” Jennifer Francis, president and CEO of Diversified Healthcare Trust, stated in a press release Wednesday in conjunction with Thursday’s earning’s call.
DHC amended in June its management agreements with Five Star, which will continue to manage 120 of DHC’s senior living communities, substantially on the terms previously disclosed.
Same property cash basis net operating income decreased in the second quarter compared with the same period a year ago, primarily resulting from decreases in occupancy related to the COVID-19 pandemic. At the same time, expenses were also partially offset by those same decreases in occupancy.
See more coverage of the earnings call in McKnight’s Senior Living.
