When prices for assisted living facilities head over $300,000 to $400,000 per unit, investors get a little nervous.  And why not?  Where’s the upside when you get into nose-bleed territory, unless it is a great strategic fit with incredible cash flows?  We recently heard about a deal that certainly sets a record and at the same time leaves those $400,000 per unit sales in the dust.  We are talking about a sale of 15 assisted living facilities with 1,244 units that sold recently for approximately Read more…

After the market close yesterday, Sunrise Senior Living issued a press release with the now-standard language that its board of directors had decided to “explore strategic alternatives intended to enhance shareholder value,” which means they are looking into a sale of the company, or at least part of it.  They have hired Citigroup Global Markets to act as its financial advisor.  It has been rumored for several months that this was the path the company would go down, well before Millennium Partners, LP, a 2.5% owner of Sunrise, sent a letter to the board asking it to either sell the company or change management.  Letters such as these usually have little impact anyway.  But we heard earlier this year that the company had been in serious discussions with Read more…

Over the long term, health care REITs have been one of the best investment vehicles in the market.  A relatively high dividend yield combined with price gains have provided investors with solid returns for nearly 20 years.  For the 11 health care REITs that we follow, the total returns (inclusive of dividends) in 2006 ranged from a low of 26.8% to a high of 52.5%, beating most every market index.  One of the best recent years was in 2003, when the total returns ranged from 22.1% to 153.5%, with six of the 13 REITs posting returns in excess of 50%.

This year, however, is shaping up to be one of the worst this decade.  Just in the month of June alone, all 11 health care REITs suffered price declines, ranging from 1% to 15%, with six of them dropping by 10% or more in the month.  By the end of June, every health care REIT was Read more…

My colleague and contributing editor Kate Upson recently talked to Deborah Burkart of National Equity Fund, one of the largest, not-for-profit equity funds in the country, about why the Low Income Housing Tax Credit program is such a successful tool in creating affordable senior housing.
You can click here to listen to the interview (4.5 minutes) or read the transcript below.

Kate Upson: Welcome to Expert Opinion, a Conversation with Deborah Burkart.  Debbie is Vice President and National Director of Supportive Housing and Assisted Living for the National Equity Fund, one of the largest, non-profit equity funds in the country.

Her expertise is in helping providers utilize low income housing tax credit equity to create and preserve housing for the low-income elderly.  She will be a panelist in our July 25th audio conference on affordable senior housing and today gives us a preview.

Debbie, can you please summarize the Low Income Housing Tax Credit Program and how it works? Read more…

We figured something was up last Friday when, after steadily dropping in value since June 19, Manor Care’s stock traded up by more than $3.00 per share during the day on heavy volume of 2.4 million shares.  Final bids had been due the previous Friday, June 22, and it took just a week for the board to sort things out.  We had heard that the buyers were getting a little nervous, and the final price agreed to seems to reflect that anxiety, but was a little disappointing, especially to anyone who had purchased the stock since the beginning of May.  Carlyle is paying $67.00 per share, a level that is lower than where the stock has traded on 20 separate days in the past two months.  The good news is that after Manor Care made its “strategic alternatives” announcement in April, and the stock price jumped to $65.00 per share in less than two weeks, we were not alone in stating that this was about the top value for the company.  If the bidding had gone to the $70.00 to $75.00 per share range, then we certainly would have thought the market had hit the “irrational exuberance” threshold once again.  But even at $67.00, we believe Carlyle is paying top price for a high-quality company that may not have much room for improvement.  We will have a more detailed analysis in the upcoming July issue of The SeniorCare Investor.    

Not two days back from vacation out of the country, you can imagine my surprise when I picked up the phone and it was a special agent from the securities fraud division of the FBI on the other end of the line.  I didn’t even know that the FBI had a securities fraud division, as I assumed these matters were handled by the SEC.  Well, apparently the FBI also looks into securities fraud, and this agent had received a few copies of The SeniorCare Investor and wanted an additional four issues Read more…

My colleague and contributing editor Kate Upson recently talked to Brian Pollard of Lancaster Pollard & Co., a leading industry banker and lender, about how senior care providers can benefit from the current economic climate.
You can click here  to listen to the interview (6 minutes) or read the transcript below.

Kate Upson: Welcome to Expert Opinion, a Conversation with Brian Pollard, President and Senior Managing Director of Lancaster Pollard & Co.  Brian was an original co-founder of this Columbus, Ohio-based firm and is Chairman and CEO of Lancaster Pollard Mortgage Company.  He has almost 20 years of investment banking experience focused on the health care and senior living sectors and is a frequent speaker at state and national conferences.

Brian, how would you characterize the current general health of the senior living and senior care markets?

Brian Pollard: I would characterize the general health as very strong—2006 was the third year in a row of improved Read more…

There are times when we think that problems and issues in the delivery and financing of senior care services in the United States are somewhat unique to us given our non-nationalized health care system and various payment sources.  Guess again.  Last week we were able to attend the opening session of The Scottish Parliament in the capital of Edinburgh under the new leadership of the Scottish National Party, a party which, according to one local we chatted with, has Scottish nationalism, and just about nothing else, at the top of its party platform.  But the Executive Debate on that overcast, chilly June afternoon (so what else is new for Scottish weather?) was on “Free Personal Care.”  Apparently, the elderly in Scotland had not seen a payment increase in Read more…

My colleague and contributing editor Kate Upson recently talked to Maria Dwight , a leading industry consultant with 40 years of experience, about what current and future seniors want from their retirement, in both lifestyle and health care.
You can click here  to listen to the interview (5 minutes) or read the transcript below.

Kate Upson: Welcome to the SeniorCare Investor and Senior Living Business interview with Maria Dwight, the founder, president and chief executive officer of Gerontological Services Incorporated.  Maria has more than 40 years experience in programming and planning facilities and services for seniors, with an emphasis on the inter-relationship of housing, health and social services.

Maria, can you please share you views on the present state of the senior living and care market, and where you think it is headed? Read more…

Late Monday, Fillmore Capital Partners issued a release lambasting the Genesis HealthCare board of directors for conducting an unfair auction process of the company, which, according to Fillmore’s president, Ron Silva, was “to the detriment of the shareholders, the patients and Fillmore.”  While we can understand why Fillmore would be a sore loser, the shareholders have to be thrilled with the outcome, other than those who sold out too early.  But to the detriment of patients?  That is about as weird and bizarre as they come, and perhaps even desperate. Read more…