CareTrust REIT, Invesque and National Health Investors held earnings calls Wednesday. Here’s a snapshot.
CareTrust REIT
CareTrust REIT said it continued to make progress on its portfolio repositioning plan in the third quarter.
“Given the macroeconomic conditions, we are pleased to report both stable portfolio lease coverage and significant progress on the portfolio optimization plan for the year with the sale of the Trio skilled nursing portfolio in September” for $25 million, President and CEO Dave Sedgwick said in a press release issued in conjunction with Wednesday’s earnings call.
Executive Vice President James Callister noted that the San Clemente, CA-based real estate investment trust is making progress toward either sale or re-tenanting of the senior housing properties held for sale in its portfolio.
In the quarter, CareTrust funded $22.3 million B-piece secured financing on a five-property skilled nursing portfolio in California. The portfolio includes approximately 600 beds. Additionally, the REIT funded $24.9 million B-piece secured financing on a four-property skilled nursing portfolio located in the Southeast. The portfolio includes approximately 700 beds.
“This debt investment provided an opportunity to forge a new relationship with a Southeast operator with whom we expect to grow through asset acquisitions in the future,” Callister said.
The increase in deals in the pipeline, according to Chief Investment Officer Mark Lamb, is due to the impact the rising cost of debt is having on many potential buyers, “and we’re seeing sellers and brokers prioritize certainty more than ever before. We believe this to be a primary driver for the increase in deals crossing our desk.”
Read additional coverage of the earnings call on McKnight’s Senior Living and McKnight’s Long-Term Care News.
Invesque
Investment company Invesque continued to reduce its skilled nursing exposure in the third quarter, remaining committed to becoming primarily focused on private-pay senior housing assets.
Aug. 30, Invesque closed on the sale of two skilled nursing facilities in Nebraska to the former operator, Hillcrest Health Services, for $25 million. The sale price represents a price per bed of $168,000.
“I am very pleased with the sale transactions we’ve completed over the last 18 months and continue to be excited about where we are headed,” Chairman and CEO Scott White said in a press release issued in conjunction with Wednesday’s earnings call.
“Our efforts are now focused on our private-pay seniors housing portfolio. We continue to see occupancy and overall financial improvements across our commonwealth and other senior housing portfolios, and we expect that to continue in the fourth quarter and into 2023,” he added.
Read additional coverage of the earnings call on McKnight’s Senior Living.
National Health Investors
National Health Investors’ third quarter results “were ahead of our expectations, driven primarily by stronger collection,” President and CEO Eric Mendelsohn said in a press release issued in conjunction with Wednesday’s earnings call.
The Murfreesboro, TN-based real estate investment trust completed the disposition of two senior housing properties for net proceeds of approximately $16.4 million and seven skilled nursing facilities for net proceeds of approximately $43.7 million during the third quarter.
Since the second quarter of 2021, the NHI has completed the disposition of 32 underperforming senior housing properties for net proceeds of approximately $296.4 million with a cumulative [earnings before interest, taxes, depreciation, amortization, rent and management fees] coverage of 0.47x.
“Our leverage at 4.5x is well within our target range and is after we have completed $152 million in share repurchases this year,” Mendelsohn said.
NHI repurchased approximately 1.3 million shares for approximately $82 million for the third quarter. The REIT has repurchased approximately 2.5 million shares year to date for approximately $152 million under the $240 million share repurchase authorization from April 2022. As a result, quarterly dividends have declined by approximately $8.9 million on an annualized basis.
“While our quarterly results beat our expectations, the operating environment continues to be challenging, particularly with elevated labor, as we head into the seasonally slower winter months,” Mendelsohn said. “We expect to continue using deferrals, rent restructurings and asset dispositions in the fourth quarter to assist our operators and better position our total portfolio but this may pressure our near-term financial results. Despite the headwinds, our long-term optimism for the industry remains unchanged and we are fortunate to be in excellent financial health to capitalize as the industry recovery accelerates.”
Read more coverage of the earnings call on McKnight’s Senior Living.
