Despite continued occupancy declines and additional expenses related to COVID-19, New Senior Investment Group said it was raising its full-year expectations for its adjusted funds from operations Friday in its third-quarter earnings release.
The New York-based real estate investment trust, which owns 103 communities in 36 states, reported that financial results in the quarter were in the high range of its expectations. Total revenue was $83.1 million – down from $85.9 in the third quarter of 2019, which the firm mostly attributed to the pandemic. Same-store cash net operating income decreased 7.6% year-over-year. Year-to-date, same store cash NOI was down 3.6%.
Occupancy fell 1.6% in the third quarter versus the second quarter of the year, which was an improvement from the sequential decline of 2.5% in the second quarter. Further, October occupancy currently is on pace for the lowest monthly decline since the start of the pandemic, with a projected decline of 0.4%, noted Susan Givens, New Senior’s president and CEO, on Friday’s third-quarter earnings call.
Further, leads increased 31% compared with the second quarter and were down only 3% versus a year prior. Move-outs were up 20% over last quarter, however. The firm also announced a six-cent-per-share dividend for the third quarter, to be distributed Dec. 18.
In addition, with LIBOR at historical lows, the firm executed a five-year, $270 million interest rate swap last quarter that increased the fixed debt component of its capital structure from 52% to 72%. After incorporating the impact of the swap, the weighted average interest rate on New Senior’s total debt is 2.5%, which will keep interest costs low while reducing earnings volatility, noted Bhairav Patel, the firm’s executive vice president of finance and accounting.
“This is another example of our continued focus on balance sheet optimization,” Patel noted on Friday’s call. “We continue to be well-positioned from a liquidity standpoint.”
Read additional coverage of New Senior’s earnings call on McKnight’s Senior Living.