Omega says assisted living is a strength in portfolio, but focus remains on skilled nursing
Inspir Manhattan, being developed by Omega Healthcare Investors and Maplewood Senior Living, launched the Inspir luxury brand.
Omega Healthcare Investors counts among its strengths one of its senior living partners, CEO Taylor Pickett told those participating in an earnings call on Wednesday.
“We have unique business attributes that set us apart from our competitors,” he said. “We have the most [skilled nursing facility] operator relationships. We own the most SNF properties. We have the most geographic diversity. We have the best decision-making data. We have a best-in-class, high-end assisted living operator In Maplewood [Senior Living], with a significant growth trajectory. And we have significant growth opportunities in the U.K.”
Omega and Maplewood are working together to develop a 23-story, 215-unit, 212,000-square-foot assisted living memory care high-rise in Manhattan that is scheduled to open in May 2019, said Steven Insoft, Omega's chief corporate development officer. The project, called Inspīr Manhattan, marked the launch of the Inspir luxury brand. The building is expected to cost approximately $260 million, he said.
Maplewood is based in Westport, CT, and currently has a total of 14 communities in Connecticut, Massachusetts and Ohio, according to its website.
Including Inspir Manhattan, Insoft said, the real estate investment trust's senior housing portfolio totaled $1.48 billion in balance sheet investments at the end of 2017.
“Anchored by our growing relationship with Maplewood Senior Living and their best-in-class properties, as well as healthcare homes and Gold Care in the U.K., our overall senior housing investment now comprises 133 assisted living, independent living and memory care assets in the U.S. and U.K.,” he said. “On a stand-alone basis, this portfolio not only covers its lease applications at 1.12 times but also represents one of the largest senior housing portfolios amongst the publicly listed healthcare REITs.”
Insoft said Omega has more than 85 active capital reinvestment projects as of the end of the fourth quarter. “Fourteen of these projects represent new construction, with a total budget of approximately $500 million, inclusive of Manhattan, and are actively being funded,” he said. “We have $228 million of construction in progress on our balance sheet as of Dec. 31, 2017. The remaining projects encompass approximately $197 million is committed capital, $135 million of which is funded through Dec. 31, 2017.”
Omega's portfolio is dominated by skilled nursing and transitional care, however, with 828 such properties accounting for 84% of the REIT's revenue in 2017, according to information released by the company in conjunction with the earnings call.
Private buyers in local markets continue to be interested in SNF assets, Pickett said. Research by the REIT indicates that the need for such facilities will increase, he added.
“We have partnered with two leading consulting firms to gather an extremely comprehensive and detailed analysis of the demographics that will drive demand for skilled nursing facilities throughout the next decade,” Pickett said. “With literally thousands of hours dedicated to this analysis, we believe we will begin to see and demographic demand wave going into 2019.”
Omega continues to try to adapt to changes in the marketplace, however, he said.
“As healthcare delivery continues to evolve, we continue to re-evaluate our assets, our operators and our markets to position our portfolios for success, not just in the near term but over the next decade,” he said.
During the fourth quarter of 2017 and through the time of the call, Pickett said, Omega sold $224 million in assets and is evaluating more than $300 million in potential sales in 2018.
Chief Operating Officer Daniel Booth said that dispositions likely will outpace acquisitions in 2018.