The restructuring agreement signed in April with Senior Housing Properties Trust “is a permanent solution” to the financial woes of Five Star Senior Living, President and CEO Katie Potter said Wednesday during the company’s first-quarter earnings call.
“We will be one of the most financially stable senior operators of size in the country and without the cloud of financial uncertainty under which we have an operating,” she said. “We’ll be able to focus on providing an exceptional experience for our residents, clients and team members and evolving our service offerings to meet the changing needs of older adults.”
The agreement in part will see Five Star and Senior Housing Properties Trust entering into new management agreements for 261 senior living communities that Five Star leases and operates. (Read more about the agreement here.)
Five Star shareholders will vote on the deal “before the end of the summer,” Potter said, adding that Senior Housing Properties Trust, ABP Trust, Five Star and RMR Advisors, collectively representing more than 50% of shares, plan to vote in favor of it.
In the meantime, she said, Five Star has seen improvements in year-over-year occupancy and average rates as well as a decrease in turnover.
Eight communities received the J.D. Power Senior Living Community Certification in the first quarter, bringing the total to 11 Five Star communities that have earned it, Potter said.
“While our goal is to continue to add to the number of Five Star communities that receive its valued certification, our primary focus is to drive operational excellence consistent with the over 170 J.D. Power operational best practices,” she said.
2019 will be a “transformational year” for the company, Potter said.
“While the restructuring of our business arrangement with SNH is the long-term solution to our financial challenges, it is only the first step in our transformation,” she said.