CareTrust REIT (CTRE) 21 Feb 202019 Q4 Earnings call transcript

Company Profile

Participants

Lauren Beale	Controller
Greg Stapley	President and Chief Executive Officer
Dave Sedgwick	Chief Operating Officer
Mark Lamb	Chief Investment Officer
Bill Wagner	Chief Financial Officer
Seth Canetto	Stifel
Jordan Sadler	KeyBanc Capital Markets
Steven Valiquette	Barclays
Michael Carroll	RBC Capital Markets
Connor Siversky	Berenberg
Todd Stender	Wells Fargo
John Kim	BMO Capital Markets

Call transcript

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Operator

Well ladies and gentlemen, thank you for standing by. And welcome to the CareTrust REIT Fourth Quarter 2019 Earnings Conference Call. At this time, all participant lines are listen-only mode. After the speaker's presentation, there'll be a question and answer session. [Operator Instruction] Please be advised that this call may be recorded. Instruction] [Operator

like go conference ahead. now Lauren to hand Please Beale. to would over the Controller, I

Lauren Beale

this recorded, Welcome CareTrust beliefs year-end any based Participants in that on XXXX environment CareTrust forward-looking business earnings is to REIT's today's it expectations, which call. and should fourth statements made management's be the call advised current listeners about are and quarter on and call operates. that being are aware and assumptions

acquisitions, regarding to expressed projections to financings future that include investments, may dividends, of subject returns, from or other performance, are could statements in. risks all matters, those These here materially differ results and financial uncertainties implied cause which actual and

Except undertake SEC circumstances a its that not new law any discussion reliance Listeners place SEC filings as arise as statistical future impact CareTrust and result Regulation could or on a undue by reason. statements other are by required more other changes for as financial and of or forward-looking changing statements any events, complete well update any publicly review information information, as factors should REIT required forward-looking where for results, CareTrust G. encouraged not or if to do affiliates revise

GAAP reports. not complete a will that cautions be the During and provide and exclusion with its FAD When Company should as normalized FAD. can the or believes of to measures more EBITDA, call, such results, of relied Company the metrics, business reference together GAAP they viewed FAD the these non-GAAP EBITDA, FFO understanding FFO upon but and

be quarterly Investor of can on period. company of the for A limited CareTrust website Relations and at of will be and accessed website yesterday financial filed and a XX-K also the call its which this Form section replay www.caretrustreit.com available CareTrust a on press each supplement, its release

Eric Gillis, include Mark call Management. Chief Director the and this morning, Operating Officer; of Financial Bill Lamb, Sedgwick, Investment Dave Chief Chief Asset Officer; on Wagner, Management Officer;

now turn call to the Greg REIT's over Stapley, will CareTrust CEO. I Chairman and

Greg Stapley

everyone. today. that the for noise over second mask that on new worry and was the year the the morning in Lauren we acquisitions us us make in experienced that Thanks being our gave We call of CareTrust good of $XXX position for believe do our phase very the million with the the growth. with that half year for the in excited sometimes Thanks, fact well ever we investments might about. that biggest and we're next year made opportunity to XXXX changes evolve XXXX

excited in More of importantly made facilities. realities reason, we doing alluded part to, a are with the operators those good we're portfolio. the across looked and them some us, required job as as I've also is outstanding to face XXXX that hard we who

all we've We others. pleased completed of to disposing are re-tenanting and that announced previously of our portfolio facilities changes, report some

just dispositions from in in on. build already more being and to loan operators. out foundation are solid to our recycled softness assets any a that to a portfolio reminder, We those early one will efforts quarter The just goal, prepayment also of details in in another team these now in a repayment as we the the walk desirable been have always Proceeds superior sure The had with unexpected rinse repayments we and be loan spring. through the anticipate minute. mortgage has fourth

aggressively as and conditions might capital, slightly before run responsibly until were where fully them we're allow. as to working the we undertaken, changes were deploy our Naturally, market hard replace revenues behind we will additional the but

are aggressively only also diversify reinforces tackle It success stewardship to commitment portfolio they making principles earnestly, our time. still to and Our also has sound these to reaffirmed but time while responsibly not small. in changes of the to belief that prune our from small requires problems grow

the that and we operating continue long-term for rigorous monitor will We application of end, produce frequently. our these overall believe philosophies shareholders. the and with To our of all best interact tenants to results CareTrust

an continue partners expect while atmosphere can organization time. accountability of and stand we approach us our fostering build expanding operating both strong, and addition, for In performance the that test helping high a and this to us healthy, of

with With the that, made and operations; acquisitions the about to sometime Dave? pipeline guidance. turn wrap I'd changes like and recent Dave Mark to over Bill we've discuss in the then, current talk will will to in up financials

Dave Sedgwick

good Craig detailed the provided color and derisk under on to actions our I morning. call, Thanks, portfolio. way last the On then

all Michigan, Metron in I in completed the were exception quarter the as With of those actions of described.

the We and progress encouraged the we the by are to-date. most closely of performance are of facilities repositioned retained watching now and

a remaining three Ohio As assets rent four recast their our with moved from master we to we the and facilities Trillium Providence; in facilities; in reminder, lease Ohio, CommuniCare. we seven Trios sold to

ground Our as we to cover are believe operators. before They the have Ohio we largely but stabilized, consider facilities on right these path. are now them still they expected performing with

rent formas drop tenants pro be of way seniors one potential. reaching but are without housing incoming they early, encouraged seen some by to we've we're replaced we for our occupancy to consistently and the any continue full gate. Services sure In It's the to operators and with improvements in their still monitor of given out to Senior all Noble We'll operations are these their outlook segment, their met the operator the on of closely portfolio.

we the to million. short-term carrying all said regards sometime expected QX closed pleased provided million at cash $XX portfolio receiving financing order quarter's on I'm in last with we six I we of to seller transaction, the XXth closing Metron, the roughly that for to of on facilities report this X.X%. at sale year. Finally, call and $X.X in expedite Friday, In balance sell the had last to February that

be mortgages XXst. March expect by paid the We off will

slide rental coverage tenant lease our We're continues quarter EBITDAR EBITDARM tenant standard new gold showing believe we stronger these supplemental. how One top coverage This next in our but what to our operators for to time, revenue. with make are by quarter you reporting you'll XX the is performing. trend, does for of and of have able with sense the be a annualized XX% approximately not a

the basically and interest at areas Looking us industry, three to operators. our of broader there are

First, the things and impact about of PDPM; Medicaid; which second CMS's deal third, let these recent flow, on statement discuss. I'll Mark

have is really First, perspective regarding some early rates to from from PDPM, on impact conclusions anecdotal that our PDPM's it's as a Medicare too the expected improved evidence whole. certainly therapy as with providers about PDPM costs. industry daily benefited make lower and There

been others by hurt heard also that it. have We've

a budget a change by draconian frequently We or rather better prompting neutrality whether to here. So other from might believe will take approach PDPM asked back from miss we're significantly better PDPM's and outcomes therapy rates change is we much efforts CMS. produce characteristics that and applaud than volume patient its target CMS's set

we the turn that flexibility bit a adjustments, be impact if before and assess off, hope budget projections will So to CMS have the any. making little out if even expect to thoroughly the

lately pull CMS to they quite comments Fiscal cut Accountability a also CMS's Medicaid or about by recent otherwise believe the industry asked have MFAR. recent the been we've bit Rule comments no go that their a that we We effectively rug reassuring plans about out discussion Second, or payments proposed the tracking assets. don't payment where away should and systems as We states of it from fears with the conversation be under impact however allay expect near-term. the significant affects in states to we'll supplemental have those the Medicaid

I'll over that, Mark with talk pipeline. to hand And the it to about

Mark?

Mark Lamb

and includes paid investments. approximately which Dave This million have our we Sacramento Healthcare. and we everyone. a been existing million, $X.X XX-bed tenant, Kalesta in In $XX.X located a that picked for XX-unit assisted facility million closed QX to XX-bed both and in living $XX.X Modesto, Thanks, facility hello new up campus SNF we leased and for skilled which nursing since, California have of in

added located years rent million for performing expectations. approximately and Kalesta's XX-bed lease lease rent cash of us Idaho, brand Saint Medical master in are to with to a Cascadia been Boise, two both million the facilities the of $X.XX street to Boise, master million We new skilled Scheduled new nursing from acquire with facility Alphonsus Cascadia deployed our ahead adding $X.X Center across Healthcare. $XX.X first has in of state-of-the-art

future. under a and market we that property allowing asset which more them the at them allowed this with construction This this our to the for to Cascadia while price was us was that in it lease second equity advantageous look we recall new new get preferred near team an financing below jointly us developed rent of to Cascadia arrangement, a quality. with may the new forward asset at with You build a from

housing tenant, to We under located to just lease leased care Senior we on Creek adding acquired their Creek Communities memory XX-unit Assisted master us. Barton rental Bountiful, Hospital existing revenue the Living, a $XXX,XXX outstanding senior our in with in Lastly, Utah. facility campus of Lakeview just Bayshire Barton

with quoted cash are well. Bayshire as We the The deals transaction these all look initial forward are further to in numbers and for disclosed inclusive supplemental. yields were costs of our all growth

was yield Our X.X%. year ever, a exceeded at which $XXX total of million, our best XXXX investments for blended all

Turning was the heat up especially to few the that, bit very a weeks market, we've slow seen over it SNF prior on it side. to but the last

operators see been As have that might shake otherwise how the Dave to mentioned, who we PDPM sidelines SNF might waiting some suspect sellers on be out.

valuation a we expect bit but phenomenon fair acquisitions not deals share the but to present. through lighter is in we of seem bit deal and no we our We certainly it believe working of have at a making a more are It get run, temporary short makes the this complicated this to that year. be reason flow do might

out now, don't are housing senior or objectives. living care right operators but and the memory our On our with deals of fit most plenty side, there assisted there

asset we you fewer Barton very but are excited that Creek in deal, saw have us are few getting just farther been which for between, a we as about. opportunities meaningful So with class and the

few result buildings of operating million. know some we consist opportunities substantive The bringing is singles well majority very in with into the anticipate and today conversations right partners, who a as CareTrust of placing with the but have small over family existing relationships anticipate these mid-sized we few new few to of operators our had sit years. pipe, here pipeline a as the past a a and around We the $XXX They portfolios. we

pursuing confidence other only which we actively coverage we can to the level only Please of if remember in pipe, time a standards meet time yield then deals lock when place in up reasonable and from that quote underwriting closing. we we and that have we that have we our are quote them

to turn to financials. the I'll over Bill discuss it Now,

Bill Wagner

Thanks Mark.

or XX% million $XX.X to and or share the quarter, million For FFO over normalized quarter per year by normalized $X.XX grew the to XX% grew prior per $X.XX by $XX.X FAD share.

and FFO Our payout or on lowest of at the normalized among peers normalized FAD. at remains approximately on XX% our ratio XX%

be to $X.XX. per Updated XXXX, continues $X.XX FAD a and we lows Leverage at of expect normalized for ratio FFO to and net of to debt-to-normalized of share value of EBITDA times XX% enterprise X.X a normalized per share net quarter-end. at all-time $X.XX to debt $X.XX of as guidance

This loan XX.X expected QX the all and the payoffs sale on our of to-date, $XX diluted guidance one approximately also assumptions. following average remaining in made and million, a living dispositions in QX, of count includes million facility shares, relies investments weighted of share independent

again which $XXX issuances of One, for to-date an almost ones rent our total I or or million, at of only average approximately all any at year equity escalations, inflation-based revenues for dispositions the X.XX%; of straight-line year; includes rental projected other investments two, are the this our further acquisitions mentioned than $XX,XXX made no which additional escalators debt including nor rent. account

loan approximately $X.X Lastly, to to we last well three this when Due income pay-off expected reimbursements amount to the the is not made as down Ohio now due for QX of are this previously $X.X payoff revenues. million of on year accounted we in is assets. we as CommuniCare unexpected the grouped in income million, an own loan tenant this their the them in of with sold item new rental Three, standard, interest leasing statement. line which included now

$X XXX of on loan with of of Four, $XX short-term revolver the rate expense the of includes interest XXX we of and This in roughly assumed sale Interest made slightly seven-year of million loan. LIBOR expense decrease also was on fees. term have a assets. by In bps our financing our Michigan deferred rate X.XX% amortization grid-based the and a margin conjunction we offset calculations, million. the bps approximately

And approximately to five, G&A million. of $XX.X are projecting we million $XX.X

to high-end comp. and Our to and guidance roughly intend expected the G&A and million million also new of increased from comp. to projection up of stock low the our is wages approximately includes $X.X on hires amortization both make This previous stock due our $X strengthen team range we

Our under remain year We our any revolver $XX that and did million. liquidity ATM $XXX strong. leverage currently sell our positions not last at million sits put to and up continue we shares balance

credit a XX% X.X approximately of today EBITDA on coverage X.X our fixed So, times, and of net basis run calculated approximately as of times. is stats rate to value, about enterprise debt are is our ratio leverage charge

We cash hand. on also have $XX of million

that put you'll into portfolio QX type last all we back Finally, our the by the since took supplemental feedback on asset received notice based it out. we performance we

it to back turn I'll that, Greg. with And

Greg Stapley

is questions bit to like of Bill. more Thanks, before open one share up for we'd There we you news with today.

enhance attention help to long-term that we priority over value and first for that shareholders, time. development priorities consistent practices sustainable value governance creation our the be can and social believe While will of always

that published of yesterday a number responsibility. to statements We're policy pleased we corporate report covering

seem of get the share statements core internally on philosophies, has practices values and given existing and While to to paper memorialize opportunity the and our many exercise them externally. these these us both

code code vendor business of rights, with other business begin We ethics Among whom policies soon and or we've ethics. human our internal distributing environmental on human memorialized of updated responsibility. to things, a capital, and a we it We've crafted relationship. have conduct and have every likewise also material vendor we'll positions our

believe triple partnership of One model is new first and kind It non-RIDEA tenant of landlords fully the responsibility. policies a of and of between non-shop for unique REIT. is a tenants. triple a a net We document our it corporate new kind more net its code responsible for creates conduct

that triple kinds this their us make who can hope the is and net unilaterally. allow of changes that Our partnership full will cooperatively approach control our landlords to tenants positive properties have make over

that us capital the take from also and will may will distinguish in for some time. as actually prospective an and implementing future. program attractive partner hope This ongoing procuring We project buying be more it a tenants that actually tenants

forward, answer that to be in to policies going We this progress this can periodic pattern gauge We that discussion of the with helpful you thank found front will we Michelle? all of look So can questions. for and website. we'll section on and on these to your Investors working reporting again be been a stakeholders our happy our hope interest our continued on order support you. and has continued that, to be

Operator

[Operator comes from Stifel. first of Instructions] Chad question Our Vanacore

open. is line Your

Seth Canetto

much This Canetto your in Seth Hey commentary in think on MFAR, us the I and it Can for by Texas, Rule. your could opening Utah, you is mentioned just Chad. existing revenue impacted that you how Medicaid impacts Fiscal Indiana? that portfolio be Accountability of tell

Greg Stapley

senators written. opposition the from significant on We at so rule don't rule everything opposition MFAR to is expect closed so on January to period finalize there everyone we've they really it's yes, about be from before whether governors hospitals point, and impact -- insurers change public and unified comment this to Yes, XXst read we've or even bipartisan based seen will through now to and been the that CMS far. go as X,XXX has decide comments it. The

things is to employed to part whatever of the taxes to there of change show methodology, almost they largely outcomes a is going There with the or CMS they're by is measurement If CMS criteria, is basically how has that there have particular quality looking which is do provider state's a as states. for. time problem that the all

that don't go we away. So to expect

largely one been that's I think at the UPL component the risk. the most has probably

is UPL or something something to accountability their not work cut. to transparency years just going think revenue knows cut wants out something that signaled states that and else this for -- as protect know so else is intention Medicaid be the rich you that Medicaid and skilled transition They've to these revenue. The funding attempt Medicaid is from enough several to to a in really CMS But it's that. there away to from an to they're for again, see. to not of not and period operators nursing we

guidance giving that numbers as expect. or any their in don't we're a to threat or really to revenue So projecting we cut out not

Seth Canetto

certain it Okay, potential does helpful, acquisitions that's very impact in great, but states? of underwriting your

Mark Lamb

Hey, Seth, it's Mark.

if something which you by states Texas, look affected are new of think that we UPL, called acquisitions. have QIPP I underwrite you have don't is kind states like at -- and our into QIPP

ever Montana. of but careful I that we assets. we very how So we our that in it's value In states bit to acquire think there, other peers, look stream, maybe Idaho that embedded, or terms like don't revenue we stream revenue say little how UPL use most we're a of more as and

Seth Canetto

then operators and top in perfect your XX just shifting to Okay, the portfolio.

was slightly you great, provided it, I like jumped but for are it coverage two is I that if out Group and were most seems the up, of the think welcome me the coverage the the guys at but it operators Providence to look those, metrics Premier. that to which flat

last particular talked coverage, Providence we should one drag I there coverage mentioned in their else rebound causing operator PDPM? Premier is on you from but that dragging know Group's anything meaningful then that's temporary quarter building we expect down has and that to a that's

Greg Stapley

So from last story hasn't to the really with there regards quarter. changed Premier,

that would XXXX they see stabilize start expect year. as those coverage of to here the were the majority to XXXX had of throughout we regulatory So in kind challenges for

are then see to QX to probably going to numbers going until until regards you're you in, see start come Providence. to not to and which see with that So, not we start QX

to they little and and is better concerned there stabilized over they things think time the take the takes eventually to dragged we're portfolio start The doing that's of as stepped buildings they dip time Ohio XXXX simply their addition those that that some part. that get Yes, you so We will to That a expected of take it to down ties show stabilize are really their coverage underperforming in about that. when bit coverage. assets, to not going into.

Operator

Jordan Markets. question next KeyBanc Capital of comes Our from Sadler

is Your open. line

Jordan Sadler

sustained saw guess follow time softening, I that kind been know that wanted curious the I of to through end it's know sequential has I a XQ. of will just I see that of only outside just coverage. sequentially. up on sort terms I'm I but differently ultimately of forward. result operators little of a the in this on think or of be individual you following years. be roll business we signed trends sort just recent reimbursement either a some the Will over as or plans do expectations as the the of reversal of the that there'll you

Greg Stapley

say I'd Jordan, and operators each of story unique broad the hard own these tenants. XX a overall to paint brush has their top Well,

for So is to you say see expect to from were I slightly have what reasons quarter whole if of I down would coverage quarters and good I host some quarter we could kind up what a guess is that then operators and of go -- that challenges.

to expect can or but together, string next, one don't much to guys the quarters from five how you four in conclusion really these we as draw see quarter terms the So performing. of you are

Jordan Sadler

based what Okay in, while is wants pipeline, expectation guys the of and in Mark have terms this then timing on to the in and in what jump guess versus you I or as I relates to it you the of sort first of of Dave, maybe year. your you potentially commentary know, the seeing other sellers and buyers fourth quarter sort of half we're expectations of about

Dave Sedgwick

Yes, think market. lot assisted out a and the on can housing of you I There living bifurcate. senior so is

prepared obviously in know, stated you I the So remarks. that

from folks of and that's to in of if we last the they side, have to an they've just PDPM get kind couple uptick of the fixed. sell portfolio pipeline. On enough over if coming seen seen ready or looking the were SNF the pieces are off their operators sidelines sure Not weeks

come a of place, that weeks the little has obviously additional bit two encouraged to we in NIC to we're and unsure flow head and by taken see as are late expect the would So deals deal there. in we to the has why uptick but

skilled start see in nursing to optimistic cautiously the normalized deals we've of to past, we're going more kind that that we're flow So seen in

Greg Stapley

Jordan, it's Greg.

we've acquisition so part Let the flow of light and add me pipeline and indicated refill you at more will can now right felt point that just of what heavily volume the be that -- that this already we're the latter seeing as back now, middle the probably toward holds. kind assuming probably of to the year loaded last and deal just that starts anticipate year, the

Jordan Sadler

Is been one-in-two-off uptick? that it a one-off like to Can individual market. is couple properties coming have year-to-date market of the you portfolios sort the is over or of it that last has or characterize many come to and

Greg Stapley

Yes, I think -- that's all.

to operators. that that portfolios to of divestitures non-strategic It's not, are then altogether, or mid-sized XX pop to mom so that get for assets continued of it's maybe have regional exit looking assets it's groups have looking a So and you to are you say four small out not. it's

but pops of the operators. I rates traditionally out portfolios the and paring California, a a are not of cap flood not Medicaid really some say mom or catch-all certain of kind business. particularly It's competitive perspective, getting a Southeast, then is their flood people of of down regions just a there and people it's are think they it's geographic very like the obviously are, Mid-Atlantic not, very, what from in still

Operator

next comes from Our Barclays. question Steven of Valiquette

open. Your line is

Steven Valiquette

morning on the good West everybody Thanks, Coast.

questions here. So, two

to would CMS around neutrality budget fiscal so question really kind rate updates were well-informed in is related around around just out, I of reimbursement published apologize really PDPM. quick rates targets year proposed your this topic just timing enough Xst. of only Medicare First, is versus sort given final year PDPM when for say, and probably 'XX make advance, on helpful small My but was each there for let's one proposed that of and May any comments chance decision follow-up each the to change just around long-winded, August a SNF view to have hitting Xst data is personal come rates that that missing a

are fiscal to operators So the revenue in you any question around SNF PDPM, the whatever do adjustments in was insiders and would general trends and that CMS quick the months first industry six it realistic guess think next profit 'XX reimbursement to at financial Hopefully, want or earliest. I SNF that makes for make adjustment two six is, question more for they see, would or an to XXXX so to make the for sense. months years over or fiscal of the likely one maybe trend

Greg Stapley

it far. think that likely not information big it's on making the does. so decision they've Yes, We they received more be would limited a based

we with Mark So basically Parkinson suggested think you same. We agree there. recently, Head of the ACA, has

be would later we this made summer, change major So on fall. a surprised if they late early

is precedent make However, surprising to surprised be being sleep it CMS big changes. yes, limited that agree is short the on so it and there by the that have would based for we they far you information can't so answer on but

Steven Valiquette

I don't sorry Okay, pricing be a that just today's nursing you last just along talked large that was just SNF company another have the another that transaction that's instead be that those on know other so of of want curious then lines? further industry. quickly to about discussion and that rather on that. line buyer. flow but but skilled REIT helpful around about they'd kind a if an a you market, follow-up Not not, view, clear, how or operator, think if you caught operators comment if to a REIT comment is healthcare was There seller across hot, overall of

Greg Stapley

Yes, Greg. Steve, it's

an that's comment. think interesting I

a tenant subject to their the to very up super was a go leases leases well high to long-term had price, actually them our good who we out could -- have coverage. probably our with properties to pay lease good and if a split all with -- to command but of that gain All them lease, doing we was of property just we'd a have only terminate not and are very give sale on any so

there would good making command is sure right pretty market, at of can We're but we be hard on -- it those be that requires in of them, the the side, price. this it assets that hard. assets find the to is getting we kind not bushes but us would So get out work sellers into to premiums it and other and challenging kind beating

last acquisitions, something that was that significant hope SNFs $XXX did and we we can it us the year in for replicate was this that year. So or we million which like predominantly

Operator

comes Our Carroll next Capital from of Michael RBC question Markets.

open. Your is line

Michael Carroll

earnings Greg, your I I a big on tenants touch watch we your you think that color Can provide how and kind Thanks, few and How wanted there in release, Yes. watch to are on that? to why they are tenants are of those should the highlighted on, that guess still list. about list? you some

Greg Stapley

characterized smaller but there our our I tenants stay for obvious I while. of and them XX are. two but you can in think talked about I not do I at to probably watch top they are the that know the what is we and on list and as I everybody in -- coverages you're see the and past look been appreciated, on them ones, of have those Mike depressed list there that tenants, a couple we said tenants, watch the list, are said couple it's past we what a the close but and know prospects mean for Dave's already a asking

and are a we're XX, pretty stay Dave you only things depressed job but is one Let's well. their into month, as non-top ones and fresh that, the list, closer described, fairly that a Xst I took September still Larry there good very top that and new in there the beyond why In still the -- in just so we stable and September, Ohio watching portfolio coverage three that's but Even Providence XX up the they're see relationship mean, doing to is is tend it, like we -- in tenant in, going to brought the over assets. that great reason those was was turnarounds basically some a they it very

is we So alarm cause be their rest even really really coverage it and the lower, full assets a drops you those quarter fourth Premier guys. the forward of but and just might bit overall in quarter when because fine doing is for of those it's on little number not in then see going like could the portfolio still three the a effects the

can the while back and that happy quarter it for to report upward regulatory we a sure monitor closely them we know. that doing that described there. for a close will little concern optimistic, is but they're coverage We're on every progress take helpful? be but now, cause before which issues to and up them because cautiously and as for to them coverage right it for and you staying no there pop be that to behind super Is onward now thing sure but you we direct, we lag, we're little is that further to seem can't

Michael Carroll

is. It

So -- just want understand. I sure make guess I to

is here there to, recently staying necessarily, new tenants it's just necessarily the expecting that that of or coverage but in close that So not have tracking tight you're nothing problems transitioned any type you're near-term?

Greg Stapley

Exactly.

Michael Carroll

is Okay, that. Bill, for I I expected then, G&A change little talk guess hirings. great. a $X.XX bit and you up the And your a growth? can multiple bit up guidance little about person talk tick picked this It Can plan or up in about up pretty you keep do level is Is G&A. just be lower the a people hiring? big seems it to with on a senior to you Who

Greg Stapley

that's new Hey, in stock else, some comp I'm $X.XX Mike. I to that's we -- things we we've -- -- hope to for think it are and was full that, starting five had we've impacting learning half going is comp other going one. There We we're for to and nothing there years. but we flow take hiring. in have in realize additional if don't to a prepare of some that progressed through of to latter to a evolve the challenges order the that year, we've next as the bit that last come organization in

as So forward we've it's this with a for run on skeleton to take and mature. going a going little while kind more we crew bit just shoestring thing of a a

Eric and a be Eric's management our with tenant doing the come to and of So what he's management which we and on of he's been is some wearing for are relations additional some asset expand side. Management of Director we been Asset backfill lot means going back changing and we and portfolio us hats role and want that actually strength need to to

and to sort a here person going help asset we senior as to in to to are management fairly want to where really we in that a growing So be out people level near-term be for we help or get us the be expect REIT. looking of

Michael Carroll

mean, how Okay, disclose -- is last did and there that, it plan is a thanks relates just expected to? me is that that then in loan you And spring. you specific operator question that big great, payment receiving on Greg. I the for for

Bill Wagner

to as expect a It's two now about and loan that's them just we and get sooner Hey through Mike, to it's Bill. Yes, anticipated QX. really CommuniCare. as that a a come financing their loan expect loan three what sold previously had to mortgage loans. well lot working we total the they to now relates We properties $XX and capital we after than million

Operator

comes question next from Our of Siversky Connor Berenberg.

is open. line Your

Connor Siversky

me on having for thanks the guys, call. Hi

on market you like, maybe to what Just quick there, in the there on the you'd dynamics just up be future? question somewhere if the touch property you a looking Utah. portfolio what you expand don't Could picked some and like in you of the is

Mark Lamb

this Mark. Yes, is

kind I our a on-campus City, a allows Salt location a is is we Salt located in There to little that Lake to up brand particular type think part this desire kind and different picked just who amenities Class is that affordable, of hospital. a services north customer -- great new of had I that A with and property operator just more City, and Utah. of going ancillary respect of one build of great of facility attracting is bit to the be say footprint grow plant, A his the into and would B a is physical plus up minus, Lake

somewhat really been We've seen working past as bring the health to as that the to that that operator aligned felt private obviously model systems just asset he like able operator the there pay well patients already up and and our stars of companies in pair and facility. were with there so liked insurance closely the could inside an his and this in with opportunities haven't instance, we

to is out it his that felt bring can Utah. So he Southern could expand he proving California in and model he here like

Connor Siversky

laws, All states? right, certificate a seeing particular new you laws are thanks any for then maybe in plans nursing, that relaxation of the general just skilled and of little any any or more narrative

Mark Lamb

pare the for is would last too been legislative even I kind and maybe of No, was year that when open had some half the ago there We've think There maybe it not to discussion some obviously -- back bed Texas, and but attain were sort put on floor. stay handing to a a ability that that bit. seen a out developers they a session rights little make the of rights, talks about year didn't easily. they in little bed bed year, licenses

So other last know I the those discussions that -- probably but that heard we that last whispers we of. would states that's we've the the in heard well, say no have were

Connor Siversky

looking would thanks blended Okay, you that me, you comfortable last and lower. Are any investments, yield one go at at one XXXX level, from of X.X%.

Just some kind of of provide going forward. kind color

Greg Stapley

Greg. this is Yes,

You we and it having from were wondering early conversation yesterday a too we're don't tell. it's are normal. seeing little sort but cap to a a the I becoming sellers know rates new of might think lower it that about just demands is, that be if interesting

below coverage going that emphasis that, with that get to if that what comfortable increasingly we've on is and go below recently X.X% and we've that means stronger we've into look, deals the So are believe we're been and important, still X%, important lately into yield that. a give placed said coverage is while up more yields some we so and going

years couple been of want, still coverages. cost the rates ability we has and down spreads good the of higher ratcheting Our feel past and to over pretty about can cap lower that we capital get our steadily at the even

Operator

comes Our Wells with Fargo. Todd Stender next from question

is line open. Your

Todd Stender

newly of ago, you a and to financial commitment how it maybe thanks. make that does coverage, then you'd Greg, compared underwriting Hi, with couple out of play Boise, kind years what some assumptions, underwrite the of of coverage that today. in built that Cascadia theme to And obviously had some

Greg Stapley

Mark I'm going Todd. one, to take let that

Mark Lamb

obviously the was still probably closed was The occupancy on -- it. think Skilled XXs. -- think when was maturing building low I I we think mix I there's mid-teens. kind of it's

out and the skilled in on the will high-XXs, probably probably occupancy, probably low-XXs. the to level side we mid expect would high-XXs to mix we that in So expect see to

So runway we there like definitely left feel that asset. for some is

Cascadia's is overall strong. portfolio very, coverage very

because run. that not but was coverage had the good felt room like them coverage a to actually it call bit -- to we our were and kind still rents so earlier triggered allowed keep that little we're of then numbers option, also So our felt manageable, they at like

X.X. I well So expect when of be would will think that interesting out. it be We asset north levels to it

Todd Stender

any you're and All certainly right, with sounds maybe guys describe a triggered the that's transition Noble? this I it making with we financial helpful see if you CapEx speak Life lot a Can Can to to out you this. what the no of rent transitions swapped of leakage, facilities? operators then mechanics not speak the there's to but lot behind this, sure you and Noble, to commitment or way it the like Priority Care just missed one, then, and transition getting

Mark Lamb

that to operator, their been outright. time a a really pleased on about to goals facilities of of found as strategic to new want with maximizing was the We year story operator these we've able triggered what finding that's business these an Care and more them. outlook sure, company Noble with outgoing will a buildings opportunity change. well and to for the there. who's the focus that facilities their of fee them operator and was CapEx owning the kind that the census make some operations to a opposed conversation fits dollars really potential their as Well, consulting look last decision kind Life is of perfectly and we're switching operator strategy their help to Priority to transition took the reach for and We've strategy It another so committed and and at the same management

Todd Stender

assume helpful. forever, they to have All the not end of seems HUD Metron. takes pay kind they're March. period what and financing I the just financing some but pretty of back you're providing getting it the if pay They that time, for there? that payoff on tight. assumptions one, right, of last loan the it The have by seller to off capital what that's don't are do they access And

Mark Lamb

as into only a things. approved of couple to pursuing the be going the like as really State after they're and HUD humanly really to do possible the seller would soon so the to licensing bridge the Michigan and a because is Yes, certainty be financing we the brought approved. we financing stepped reason transaction of It to CON did

have to it interest gotten a as got second wanted of certainty and wouldn't to that to all -- to bit we and closure close little approval, be half wanted get able So for we as able of and to income will the as soon we be with we that we the February March just to income provides us bring deal otherwise. more

this So process, with that's lengthy had really all -- what a which which of was being bring transaction behind particularly it, to it is started able is just

and this Michigan The dynamics in end. with to operator an involved

Operator

Kim Instructions] John BMO next Our [Operator Capital question Markets. comes of from

Your line is open.

John Kim

ability communities I financial could It current if stay on its was I rents. Premier with stabilization, your know wondering almost I their to like them you comment some you about was and looks half morning. good assets represent wondering and their Thanks, managed stability. expect on but just of

Mark Lamb

slide. at sure the more guarantees. had better color they have performing than today call Their and They I'm we coverage on quarters are can today. on the you're that personal much we've current given than in last -- say that quarter we this looking the got

believe that we So the continue any be won't to to have pay able they to rent. don't reason

John Kim

paid call you last you mentioned on March. earlier answer I loan expected CommuiCare on being that question early, mentioned the but in that out an Bill paid think to your you I down the about to be thought

clarify to wanted just statement. I So that

Bill Wagner

I that On have had CommuniCare loan the later call round XXXX paid than in this off of last being guidance. I in what

So if then did I think misstated, I though. don't I apologize. I

John Kim

related wasn't if I sure it to the it or was if Trillium was financings. that

that's same assets. sure not I'm the if So

Bill Wagner

the QX change of in $X.X loan the mean paid half extended accounting guidance. the back million had got to loans, as being the half, that off about this in paid off I well loan as I that's both I last $X.X from quarter had for quarter the XXXX. CommuniCare of million No, to in this back in

John Kim

ATM the utilized in you Have January?

Bill Wagner

not. have we No,

John Kim

should there lack the read quarter anything at we far potential that fourth into the both the utilization timing Is of just of this as year as acquisitions. and

Bill Wagner

debt ATM all-time our again I net Interest bit -- at the to toolbox. wouldn't line tool low. at our little out practical in me, to rates I low an into is to mean, EBITDA great use another the but an run read are a it. little all-time is seems a to

Greg Stapley

know, going as Greg. in John, perfect turn but always just would viewed capital we've Yes, had you the months, some we've it's at acquisitions, thing add just if we've a the like that, to acquisitions look felt you and I repayments had funding really loan Metron the and the for on the what's our we vehicle we also four ATM the to need to past were match redeploy. but have sale of coming happened, didn't because

So whole story the really that's there. right

John Kim

a do basis year, going did think closer on like $XXX to or $XXX net this you you volume it's last prior be million million the acquisition to as like year far as So year.

Bill Wagner

a then little think make hope going to prediction because that, million can hard of you and that it. a that's sure I so. $XXX you're most so you closed to a close have it reason and be for of pipeline We mean it's John, like I some only

as volume. all or share a So prepared that, but that there. through hopes a just our we valuations it will we believe and we transaction fair we and do working it's in on of definitely -- deals overhang announce is said Tough a bit certainly remarks, but our we're PDPM have those creates sort own environment seller's of will complication the a come. our get as We and they market tough goals of out

Operator

questions. There remarks. Greg to any to I'd closing further Stapley back over for turn are no like the call

Greg Stapley

conferences We'll us. and out being We next the and to open months talk. the where you on to over know and questions, investor other really you if appreciate you -- few additional several find everybody. call We're things. be today at Thanks have always conferences about

you. Take forward look care. we So seeing to

Operator

this now participating call. Ladies Everyone you and conference gentlemen, Thank disconnect. today's a have and day. may for you concludes great

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