“The seniors housing and care industry is on a promising upturn after setbacks related to COVID,” Westlake Village, CA-based real estate investment trust LTC Properties Chairman and CEO Wendy Simpson said Tuesday on a first-quarter 2024 call with investors and analysts. “Thanks to favorable demographic trends, improving margins and rising occupancy rates, all signs point to a more robust market,” she added.
She noted that the company is “encouraged by the reimbursement landscape, particularly with the anticipated 4.1% increase under the [skilled nursing facility] payment rule for fiscal 2025.”
Additionally, Simpson said, reimbursement in several states is expected to increase. In Florida, for example, where LTC Properties owns several properties, “operators will benefit from an unprecedented 8% Medicaid rate increase, which will result in increased coverage for LTC.”
According to a press release issued in conjunction with the call, during the first quarter, LTC Properties completed the previously announced sale and re-lease process for 10 assisted living communities under a master lease with ALG Senior. Two of the properties, located in Georgia and South Carolina, were transitioned to an operator new to LTC.
Total revenue for the quarter increased by $1.8 million compared with the first quarter of 2023. Co-President, Chief Financial Officer and Secretary Pam Kessler said this difference was due to several factors: the REIT received $2.4 million of rent in connection with the sale of a property in Wisconsin in the first quarter of 2024, and HMG also paid more rent this quarter.
During the quarter, the company sold a total of six properties in Florida and Texas with 268 combined units as well as sold its interest in a joint venture in Wisconsin.
“The increases were partially offset by lower rent related to property sales and operator transitions,” Kessler said. “Interest income from sale lease-backed financing was comparable year over year, but interest income from mortgage loans increased by $1.2 million, principally related to mortgage loan originations in 2023 and the funding of a construction loan in 2024.”
At the same time, interest and other income decreased by $1.2 million, Kessler noted.
For additional coverage of the earnings call, see McKnight’s Long-Term Care News.
