Earnings calls round-up: AlerisLife, Diversified Healthcare Trust, Omega Healthcare Investors
Diversified Healthcare Trust, AlerisLife and Omega Healthcare Investors held third-quarter earnings calls Thursday. Highlights appear below.
Diversified Healthcare Trust
The third quarter was challenging with respect to expenses in Diversified Healthcare Trust’s senior housing operating portfolio, President and CEO Jennifer Francis said during Thursday’s earnings call.
Operators in the SHOP are making progress toward pandemic recovery, she said, in spite of setbacks from September’s Hurricane Ian — which increased operating expenses by more than $4.1 million during the quarter — as well as cost increases related to labor, utilities and food.
“Despite these setbacks, we are seeing strengthening demand for senior living and expect continued occupancy and rate growth in our SHOP segment, leading to future stabilization,” Francis said in a press release issued in conjunction with the earnings call.
SHOP occupancy has increased 110 basis points since the second quarter, she said, representing the sixth consecutive quarter of occupancy growth.
The Newton, MA-based real estate investment trust ended the quarter with $800 million of cash and limited debt maturities, which Francis said will provide enough liquidity for DHC to continue with its plans to invest in its SHOP communities “to drive this portfolio to stabilization.”
Read more coverage of the earnings call in McKnight’s Senior Living.
AlerisLife
Third-quarter occupancy growth was the largest increase AlerisLife has experienced “in recent years,” President and CEO Jeffery Leer said Thursday during the Newton, MA-based company’s quarterly earnings call.
Occupancy increased 180 basis points from the first quarter across the company’s residential segment of Five Star Senior Living communities, which included a 290-basis-point increase in the communities it owns and a 160-basis-point increase in the communities it manages.
“We were pleased to outpace the senior housing industry as reported by [the National Investment Center for Seniors Housing & Care], which showed third-quarter sequential occupancy growth of 100 basis points in primary and secondary markets,” Leer said.
Following approximately $3.8 million of capital improvements in its owned senior living communities in the third quarter, AlerisLife had $79.1 million of cash at the end of the quarter and no near-term debt maturities, Leer said in a press release issued in conjunction with the earnings call.
“We expect that third-quarter expenses will be higher, mainly driven by widely reported inflation that affects every facet of our owned community portfolio and corporate functions,” he said Thursday.
Read more coverage of the earnings call in McKnight’s Senior Living.
Omega Healthcare Investors
Omega Healthcare Investors has successfully worked through operator restructurings in the third quarter, CEO Taylor Pickett said during the company’s second-quarter earnings call.
Notable among the restructuring was the completion of the sale of 21 Agemo Holdings skilled nursing properties, generating gross proceeds of $359 million. During the third quarter, Omega sold two facilities previously leased to Agemo in connection with the restructuring of Omega’s lease and loan agreements with Agemo. Since the fourth quarter began, the Hunt Valley, MD-based real estate investment trust sold an additional 19 facilities previously leased to Agemo, bringing the total Agemo properties sold to 21.
Omega’s revenues for the quarter totaled $239.4 million, representing a decrease of $42.2 million over the same period in 2021, according to a press release issued in conjunction with the earnings call. The decrease primarily resulted from asset sales completed throughout 2021 and 2022, operator restructurings and no rental income or interest income recognized in the third quarter of 2022 from Agemo. The decrease was partially offset by revenue from new investments completed throughout 2021 and 2022.
“Unfortunately, we expect that we will continue to have ongoing restructuring discussions with certain operators due to inflationary costs. …These ongoing restructurings will likely include asset sales, operator transitions and rent deferrals,” Pickett said.
Read more coverage of the earnings call in McKnight’s Senior Living and McKnight’s Long-Term Care News.
