CTRE - Earnings call transcript Q4 2021

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Operator

Ladies and gentlemen thank you for standing by. And Welcome to the CareTrust REIT’s Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question and answer session. [Operator Instructions] I would like to turn the call over to your host, Lauren Beale, CareTrust, Senior Vice President and Controller.

begin. may You

Lauren Beale

by ended changing The statements Listeners may welcome as about and or review financial future not on These uncertainties future actual affiliates and or are call. to statements including as and is as changes information, reason. as could Regulation other dividends. well REIT CareTrust for results, any quarter cause pandemics, statements, and to revise in information as such investments, Company’s discussion are expectations, expressed forward-looking operates. new are not impact affecting required a matters, any returns, projections or more of of events, factors for fourth recorded natural Except where publicly forward-looking statements control, and based SEC it implied or arise call Thank complete as other undertake risks of materially such matters any may management’s other statistical which G. COVID-XX, by business, required performance, do on financing, law, any business should result to those and today the that subject be REIT undue financial factors SEC circumstances, CareTrust earnings current other a may to update or acquisitions, reference encouraged reliance forward-looking that that not regarding advised from that place could Participants listeners or to Company’s and business call results governmental statements generally on its and filings differ should aware XXXX herein. today’s their disasters, include the and beyond businesses tenants, are beliefs you assumptions, are CareTrust made CareTrust’s that being environment this the actions.

When viewed of complete will believes they can and reference the filed also supplement, the which results, EBITDA, together such but and FAD. accessed Company the Relations the its non-GAAP a of be CareTrust can relied business and or cautions on Yesterday, XX-K, of FAD with on as website will these be call, GAAP a period. understanding to normalized more and FFO, exclusion its FFO, During limited upon replay that FAD its GAAP release, section press financial available each and metrics the accompanying at not the be quarterly measures Company CareTrust’s EBITDA, of should this of www.caretrustreit.com. A website for reports. call Investor Form provide

are Wagner, turn morning Chief CEO. Dave and Eric Officer, President Sedgwick, Officer, Gillis, Lamb, Investments. the to and this President call Sedgwick, over Vice call I’ll CareTrust Investment now Executive Management REIT’s the Dave of Bill and Mark and President On Chief Senior Dave? Portfolio Chief Officer, Financial

Dave Sedgwick

like everyone. Thanks, Greg Lauren Chairman, with start Executive to our the the I’d morning, Stapley. and tip to of good hat

off in one with All over Debbie return his team with express of announced and our wish shareholder luck highly took the strongest of of the leveraged total us sheets put one top one time north church him together chapter the as the appreciation years, our into of the We December next mission of the and his business. seven tenant X.X best last their at in lives. and over wife deep healthcare spin of producing was He balance CEO. years here with XXX% in REITs during the and his leadership associated for CareTrust this first the our performing grew those

past changes granted needed of today of in a been has including team is of Despite last it collections The our we the two to smooth that the one we Turning record ability in XXX% sailing. in our over team’s full the the have all portfolio several operators inception, a also efficiently. deferral the the complete the in for to long strong to certainly we’re the report manage The making returns competition the from investments, track XXX%. overcome running collected growth, our pleased challenges the contractual quarter, operators, the quality has not of and testament regulatory hitting collected over since of pandemic. year, wall our to to year’s fact quarter, changes years some of to rents repayment XXX% to contractual strong the field play, place years, rent

remained asset in classes flattened the had flat. have seniors latter nursing, in In skilled recovery quarter, while reported We saw quarter. fourth part the quarter-over-quarter the housing we occupancy previously occupancy both across of

X impact landing Our COVID runway portfolio for measures to for provided provider conducted a pandemic, admissions. soft few not provider limitations quarter, HHS last Throughout infection of that repeatedly a reported properties employee we and operators phase unacceptable of operators, for, from the the their for Late couple insufficient have on our disbursement We’ve risk portfolio on we’ve the as Omicron’s in on we needed funding contractual resulting of mitigate effects latest relief of and immune rates, is operators a default the tests operations. relief that handful end. XX% an January. collected in hoped our stress the of rent believe provider of identified relief pose and

and take For and from remove quickly we’ve uncertainty possible. these foundation our associated of to proactively advantage and the frothy seller’s and as efficiently cracks as decided properties, the relationships these market,

the investments Rather, realities, seller’s the to intend to to hope pandemic. have time that sale begun rent. not have repurposing representing with teen portfolio. defer game been properties assets, our up pursue intend of We any into of today’s market, do this and contractual since to risk operators watch advantage retention take we of use and to XX% the list XX upgrade on or or our for before profile new the the play redeploy proceeds growing of We underwritten approximately

progress updates will along this capital year, is made yet and a business see I’ll do provide investment today few It and on way. seller’s outlook but the of highlight our postpone we expand market things. the the early year. plan, will Given stage a Mark opportunities until deploy still for will to this guidance we we’ve meaningful

convert we and intend for behavioral entry are and a to an with some found well. asset repurpose be provide and in management small those assets as of with master take operator higher vertical strengthen have been to proven into I years class better the and prune powerful new to future excited growth part to will facilities. use. own leases the we’re new very at into a and our a XX asset mentioned This We’ve health point of First, properties about a the looking this company thrilled a tool

partnership XXXX stand to wherein year the and us XXXX if should we opportunity itself. foundation the of in lever for chronic with business. allowing is the will talk industry’s best was in some to point us lending our the as history a properties to We continue measures and presented in the took participate the to reinforce watch of deal list ever program teams, Mark exciting with pivotal respected our And look about approved of significant my most operators deployment, Second, available time. stories new of in a test to our capital repurchase on one an last back the stock on

of housing with skilled about We ever enthusiastic many I’ll our matching seniors mission for nursing are turn opportunities behavioral come. now high quality operators great years Mark. With expanding as it over and to to that, as health

Mark Lamb

brought New acquisition for our total Good assets XXXX morning. $XX.X million. in housing In This $XXX in QX we Jersey bought to approximately two seniors investments million.

our housing $XX is in Looking currently million made of in customary there. doubles The at sniffs the senior few million predominantly we a range. to with assets singles $XXX sit pipe and up pipe

and excited we to into the we variety for lead growth. in are discussed, us about will of space leading loans with Dave a we operators anticipate partnering targeted fund have a which markets As lender

the homes at on has due things. market Looking is believe more This never robust. been pricing a few we to nursing

there’s on amount supply significant the of not market. a First,

bid everything market, portfolio it’s So comes gets if to size significantly. that especially up a

for that looking can ton private a bridge they there’s to deals HUD. Second, of liquidity

Third, out efficient. to side and COVID many on the manage come other how operators through out have figured stronger that more

along senior buildings we operators well continue that us performing are hope and few to to turnaround type senior But struggling. opportunities coming housing a in find quarters. in underwrite our of really in on and situations spectrum are stable space nuggets front, to we and Lastly, seeing for the every the the the size to

community numbers sales considering the supply loosen investment anticipate and record of existing values provide mentioned who are we to continues the forward Looking selling. to above I owners to tight opinions

we with their leads our a that We market tighter to that continue force we than see confidence community are that current lock our the find the drying operators, meantime, to owners work continue And and pipe, have run a us the stimulus up and cautiously Bill them near discuss Please underwriting that only turn on standards. that each And up year. under reasonable them our term. close to we a it in the are only of over and pursuing quote can accustomed close ever labor fit will us we off relatively market quote of down we level have actively remember financials. deals to with you I’ll selling then that reality assets. when to In now if grown optimistic to into we deals brokerage and

Bill Wagner

Thanks Mark.

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

a million be extremely cash ratio continues Our $XX of debt under times. in strong $XXX also Leverage million to our with X.X approximately strong available liquidity revolver. remains EBITDA at to and normalize net

in at value X.X Cash net XXX% contractual coverage January cash of and achieved was charge quarter as rent came ratio end fixed we debt XX%. for the of stands to of a collections Our enterprise and in February at at XX%. came quarter currently XX% times.

are on guidance little re-tenanting of up we or XX picture gets until sale, mentioned, a repurposing the of timing assets. clear for issuing XXXX postponing to the the previously Dave As more

soon out. turn Dave. material becomes as we it the meantime, back I’ll In progress. As to that, this announcements be will as this With make put we will clear, putting out we

Dave Sedgwick

Thanks, Bill.

with And we your support. And to So we been take happy you discussion hope for be this questions. would that helpful. has continued thank

Operator

Instructions] Steven Barclays. first from with [Operator Valiquette Our comes question

Steven Valiquette

taking guess, I Hi, health that. couple more opportunity hear the of thanks. afternoon. good I side. morning question. to curious around behavioral about on the Thanks and Good questions for was the A

or just also, far diversify curious as quickly any far process happen into as more about that more of facilities healthcare hear Thanks. other conversion conversion or around as and licensure We’ve color of hear of nuts the attempt But few to about also more First something could that the REITs to the a of opportunity. a all, bolts well? process seen to is pipeline lengthy curious as that that space. as those opportunities just

Dave Sedgwick

thanks, and me Great, I’ll Steve. take Mark wrong. where I correct go it can

So its And is other behavioral we the and couple offensive of health, a one it reasons. for like is defensive.

there an new the repurpose behavioral way for that of select that behavioral Mark that side, for could at But is if makes now up price investments. offensive hitting to here management a can we and the lot place pick the really nursing normally grow right not But really sense. distressed. health then for take like where is that’s that his a market lot interesting be On with fairly assisted of skilled and facilities some play. a is that living an that opportunities from operator or we underwrite perspective, team And and there some distressed along good a products and to asset health that

that’s from For or if example, a really remove lease by a strengthen remains if can two you no into the we’re you with really that what re-tenanting is if how buildings sales get you starting. lease, brainer, looking negative have you’ll redeploying than health competitive, and if from tenant down the that you EBITDA from that that convert what seems would here. That’s it proceeds. we’ve like that especially at that better been get master one or behavioral is asset not a And yield with master portfolio, that weighed and

time months say, licensing years question you like to XX to and licensing lease these your a assets, that as with us XX redeveloping nursing and until we but behavioral we’ve XX would that XX start do just expect yield licensing really competitive at health regulations in be to would come different. for But feel signing will very and requirements. terms this a the home XX will the these and it been at some of rent relationship for looked and feels looking that of perspective, area from It industry each done, nuts which okay, like and bolts of an and to then different. the quite And ago state is You each did in from getting zoning is maybe we permits online. timing state asset, that to

Steven Valiquette

sniff as side? the senior be perspective, on way there of either side helpful. divested might or some only deviation maybe just be Or could is of right portfolio the whatever quick about that with to that current exchange a assume in housing, the The should health that XXXX few it That’s just behavioral for assets would follow opportunities, replacement from the well? up Is in that from a tenant like probably even be most we this other on year advocacy the a think now?

Dave Sedgwick

for that. Thanks asking

for about very think like In I that last repurposing be you more classes, our it look is the way how these health, but health investments that into we future, to year among CareTrust you that terms in entry about be year say think think to that’s this likely from this not thinking how our about much that’s and of most future, year behavioral the we new asset As facilities become start behavioral the we in that right will will will own in we’ll off. should active have XX.

Steven Valiquette

on clarity the for Thanks right. All that.

Thanks. Okay.

Operator

Siversky with next question Berenberg. Connor from comes Our

Connor Siversky

on the me Thanks call. for having everybody. Hi,

potential a mean, event do program? into you as color assets potentially dig you a to can of you buyback you be as mean, that that of seek total the in assets repositioned behavioral look could facilities behavioral selling percentage mentioned you would identified. a what health. Or in repositioned where could provide put proceeds these with to repositioning handful Is a or those and little I just that another So ABR more the that of I I those engage off proceeds? any in of sales the be to to portion then you’re mean, you this assets potentially there invest to stock health well?

Dave Sedgwick

re-tented housing capital could of said, say but percent I that the done behavioral assets, it into it stage, the sold that could on what that asset, that’s historical go now unlike because that, and zoning, Particularly diligence preliminary gating we handful far gates those done point. done cleared health to just really that have we could right it’s nursing have is there’s until a it at we’re would like I I’d Well, have in this skilled reverse and are until that there. it on all as you we housing, really be seniors underwriting I preliminary on when But the historically much those handful, seniors that we’re those along. not could options be of to few, zoning, nursing expect repurposed When reluctant with versus work comes say a not diligence health, helpful order. rates the a redeploying at redeployment enough probably properties. guess comes zoning but table including this versus see proceeds, item these to on just be behavioral important. skilled a is of would to some be, being And really it

Connor Siversky

of like? would yields behavioral look well? And any on say the similar skilled behavioral then That more be give or as mentioned agreements skilled nursing health facilities Can you helps. health for lease you may could metrics these that to repurposed. specifically, And nursing coverage repositioned rent then be potentially what had versus similar that those look the sense could

Dave Sedgwick

Yes.

lease anticipating health we do skilled probably be nines, that in if we’re probably And north times would we’d So behavioral three the coverage. of for stabilized of properties coverage were well. on new the investment, a nursing, north be as to yields

Connor Siversky

clarify on final one just And one, activity. Okay, just then that to helps. external

Correct? invest agreement in the real as acquisitions stated products, is that you separate that to the as of engage variety you well. in loan So XXXX from could this asset

Mark Lamb

of business It’s the the I housing sort Mark. side. This for Everything triple pipe of in a our Yes. bread it and another with skilled nursing Yes. pipeline that was, is quoted butter seniors on and us. call kind normal net a

and over and had and with in housing crossing months couple a nursing and that’s the we’ve skilled so we net And would our triple coming discussions from this to last bread the veer see weeks. on opportunities butter lender desk investing But, in expect seniors basis. our won’t

Connor Siversky

Thank it Okay, now. I’ll leave for there you.

Operator

Sanabria from next with Capital BMO Markets. Juan comes Our question

Juan Sanabria

you assets, changed of between Hi, got line. sense XX% kind worse Can XX, is And I over think looking in. really collect we’re given in and kind XX to and see you not of really rents. split XX% the you some kind us that that now to of seniors good rents. had situation morning. to come the months the progress edge, of labor do funds skilled XX XXX% of on inactive, three here what the last is any just your and flat you the of if can rent of give what Question gets your able the what pushed you’re base? But plant drops

Dave Sedgwick

Yes.

COVID we portfolio been presents. along the pandemic, the stress new with we’ve all the really testing information As updated that

be last before six So Delta variant. Delta impacts after to more costs tests lasting maybe updated long that. we labor saw year, these QX to stress months nine with We our into then the the of appear

but phase, we kind visibility That’s Going phase our there of knew funds four time as around the impact be forward. much the a going there into and points how we data toward anticipation then to was we happen the didn’t was funds that that same X that pretty X stress test phase another come. of into Omicron hit. lot at important you of And end look going have year, this to impacted the was have

properties And also there’s when factored and look and what like is we in with collect relationships that away. for there’s go But properties so that deal certainly that we January, in and look measures with February bit rent. look this we just taking then But properties at future, according impacted relationships action, even after with didn’t have or the to test that’s and And why feel March the the and in January we inevitability are more world default are current don’t XXX%, with just stress provider hits relief we updated to beyond January not some these operators test. and take but and really, of a action stress risk model the of there. to okay, like

that that’s our it of more makes with changed. by those and presented now. that’s list hope different right decisive operators watch folks And is, it uncertainty sense remove the our with playing to So thinking so what’s been more instead long, have for the on game be that

In and mix, this on of is things agreements mix mix that. specific come nursing update it we we’ll seniors and a everybody like have sales for the and as skilled and terms of housing re-tenanting to milestone

Juan Sanabria

repositioning you sense go what on the as earnings do will run forward from rate? go can may coverage get or clarity and this do you And levels whole process anticipate last this of the look provide any how before we long and you

Dave Sedgwick

Yes.

premature business But those think actual from deals, that things care take along committed situation we at the give point. do providing of these will way. All go of and coverage I’m same are kind pro LOI of the be we updates this properties, the numbers future, as XX I to happy we to the on to it’d it as closing staying So kind forma improve. in to

your second The was of part what? question

Juan Sanabria

you be when clarity timing could The earnings and of done? when expect this

Dave Sedgwick

Yes.

color So we point, some I’ll and at this just about that’ll are you give where help.

not operators that But it’s by closed these in business, And have another our some of XX negotiation by think get properties the few assets any if and stage then XX circumstances, of really because of it’s other operators to this, toured be I that through productive value. retained. or company for some We’ve the we’re of of assets, could already. a we’d some new the that the to it. that We’ve collaborative stage, sidetrack engaged safe the conversations we’re started sold I timing COVID similar want had brokerages these within opinions earlier state, summer. involved curveball you sales about probably I at depending normal gauge done We’ve marketing to the gotten whether main would would may the in by vetted we and process, nuances. the a going to new for like relationship be be best retain them, impossible to and their say and also But LOI of might assume number a excited licensing them. selling to return we mostly a use, it that of operator, negotiating versus said start that of these be with not think them already diligence and re-tenant variant with and be LOI opportunity that them. in that path this will sometime with operating probably behavioral kind time lease going this is executed on And determine about permitting of new instead the we’ve will an because to doing parallel health preliminary going leases, XX some but inside stage again, that’s this month under there there we’re repurposing, time with

Juan Sanabria

underwriting coverages One bread me expectations last you for of butter and the Can your acquisitions? pipeline, your to? question for do us and you give yield have any Thanks what do sense lot. a

Dave Sedgwick

seniors a kind a on of kind then and seniors depending of nines, Yes. the, sort are sort of that’s, mid kind mixed in And yields instances say side I the of Obviously, on bag. some state we’re nursing. on changes again, that the target to housing, eights in depends for for take on to low underwriting to underwriting of can coverage skilled coverage in kind one of sauce terms to then that mixed of and X.XX XXX of, like, I still would still X.X secret the, nursing, we we loads. always just But some look And sniffs do kind of asset place. housing underwriting asset. skilled at there’s then start high our mean the the bag X.X is complete it’s to and in day range.

Operator

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

Jordan Sadler

Thanks, and good everybody. afternoon,

had impacts COVID just January, uptick took COVID an And we in discussed cause if one have talked I mix question seen variant the the it’s you specifically kind of and that spikes curious in I’m labor fundamental basically question guys solution also been place on December late reported, that what the So you of skilled of between today operators the happened and patients. while and Omicron about? have your a to through of and incentives, comment since sort to prior treat in to you last part and guys offensive release shifted be it’s

Dave Sedgwick

Omicron several usage by but Unfortunately, Yes, happened. improved wide and which been Omicron, and quite affected, Not here, say like cost, that this like exactly to haven’t residents the bit a in mix been increased it of your that we been that. caused those can the is the of affected in caused facilities Omicron skilled for they’ve operators. data has have agency change rates most the that conversation also to has increased through overtime operations, probably is employees, among we infection hunch once things but and email and And things financials seen, because get really employees. skill largely caused I it’s get it’s labor line. those nursing has occupancy our that. mean, of And right. the have

improved mix so And skill margin. exactly that is to translating not

Jordan Sadler

I the the Got sort while sense. covered this list have And back just want by And tenants I I’m I by struck it, that was in asset the you guess the type was of at endeavor. was these you Trio on by, if Trillium, remember been that replaced thing I in And it at called that guys for for Ohio, you Life now a with come now. spring think to a Ohio, recall. with guys were a some do management noble watch you up, seven of long. blow I’m Metatron is, I that bit struck before I quite makes And to the central at cleaning, have so of to because comment, pandemic, of similar just southern dealing believe time, priority mentioned endeavored I Care time. facilities. a struck you

that on. much context And the heading position was there a into And via that de-risk went then lot was portfolio, the and so in the cleaning, to of spring company idea XXXX. really to better the

who not is lot a list, then I watch to the fully now did think that that or that same never watch I’m or a lot appropriately so that is with? And of get that these it place. stuff dealt and be at list Or didn’t is properties with were dealt and is has on that issues dealt with who just on what the time? take of just curious it now

Dave Sedgwick

Yes.

end CareTrust exactly is and I two the management XXXX did that of that asset work the portfolio of the to the years. we the of work rents last think toward for that collect has de-risking enabled XXX%

have think different different not people. can done list the a then to not things that artful that mean that had through pandemic we is had work term would The have in watch the term pretty if far. so I performance had XXXX, we we

might list. transitioning buildings, you’re they’re you performances, say list, a them on If a if on watch put watch for they’re you might

needing did, able that the make activities that de-risking we in successful. back going are of there that XXXX after so sure end folks be to they and the watch be And to still to closely were even we were

of is and really about Going had I in portfolio the were in we we good we’ve intended. state the pun XXXX. had to REIT the the XXXX variant that COVID feel January. the done of that would when and we’d keep that there become Omicron It those risk to into list reality reality, guidance time the for future the have beforehand, confidence Delta why only healthcare pandemic pose and the to on really waned at our that the the because that the as the has hit, or XXXX. to and to like time pandemic, we transition a felt we say default care the in That’s had we’re of that in work having now pandemic, that immunity now place to we react comes, The the the folks in of also addition watch labor and are call situation it here or the in of of were a take proactively

Jordan Sadler

outside of can appreciate CEO? these run engage as speak stock guys. to non and on process reported? not up follow base one non a for operations cause the the sort related of was to of obviously has bankers You the elevated is that of G&A guys pandemic for Maybe costs? you some transition routine to there comp. the just the the I Can accelerated Or is amortization, the of leave just transaction Bill, overall here, last out routine the more an you belt lot a impact transaction had cost

Dave Sedgwick

I’ll that. is take Jordan, Dave, this

not for team. management So those what is can alternatives as see business company there our expect strategic you It’s to relate on charges year. we that you tell fulfilling responsibility for usual quarter the the fiduciary incur board the I considered do the after similar that front to that charges this that in and and

Jordan Sadler

yielded What Any on other color process what that precipitated or Dave? it?

Dave Sedgwick

all that’s that. you I on can give the No, color

Jordan Sadler

Thanks for that.

Operator

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

Michael Carroll

think you the are company the repositioning and I assets comfortable identified? above do expand that that were how Dave the with need you that Thanks. mean, might size XX the to plan? of Yes. beyond

Dave Sedgwick

I won’t And be portfolio a a good the the would the management question. And, in trying in fair plan the a foundation handle promise on but really I feel can’t to But it. Michael, dangerous cracks the never have. take with rents say see That’s of got good we’ve out in that, We never. that we we’re the we collect to think to on surprise, pretty think there about ability now is we pretty what we feel do good future, to long-term. it’s that of care remaining can say asset that COVID, year the yes,

Michael Carroll

the XX% a January? we about? the here forward? that rate XX% cash base assets what’s Is could of the Or run good in it going that Then should that we to that term? think all collections XX reflect near Is should for in to down expected expect dip

Dave Sedgwick

No.

given couldn’t we I in probably process, think you this point, much at at color terms the in of are give there. where we

Michael Carroll

know I process to if masses normalize? could normalize. are I of Or the could started? peers valuations mean market. you you’ve you private you that to bringing so, see market. investment do just some has starting you Mark the valuations And then past market, the new of kind product if think quarters know I pretty and start saying to the when that several been that think on I guess, frothy. market for comes one that your occur? for Have are But to valuations that

Mark Lamb

No.

ever are valuations as high they’ve think I as today been.

to their But certainly, able to are operating opportunities pretty be company advantage in also, estate there think operator. the the a, good the off and is to operations non an they’re kind think, real estate to and hand nonstrategic strategic sidelines to sell rebreather all it, see come as of a in one relationships especially crystal fell in selling starts off an more and things mom later assets and I in I had and real buyers to I start hopefully would of as normalize hit think down say and as take in think many having well. if kind some ball, swoop. the private biggest normalize year, I Certainly obviously of market constraint and buyers start and and that more the had the I I labor we own pops

there long winning XX% pay assets. kind The to down, pricing. So on that going will stay think aggressive hot, as if out huge stay to low. that and it’s take loan have cost. leveraging Lenders operators there’s for to I HUD to, appetite of it’ll think rates I And are market a as up stay continue for

feel And to But market necessarily market that see that bed I on relationships. more run. at in short a sort do So market happen. like, that. I be basis, when visibility stimulus the of what interesting comes could We on we be the dilute a off depends think lot definitely will have certainly high, good number how many pricing is of have we the about able of most think not look and that will, the runway, to the being going of will I pretty But I And don’t historically is to assets, think obviously, think run were what the it operators you per on expecting. to it’ll out and ultimate end bought especially through year.

Michael Carroll

behavioral last or then for me one happen. potentially just planned, the could on guess that’s I transition And

I that you for to ran take a good said months, months? occurs, not will those about it? if that assets think was on XX way think it get to XX so Is CareTrust going

Dave Sedgwick

in XX. whether it’s the But health to Yes, operator is not that’s really the already And or right. is XX the trigger state. behavioral there

if in ballpark him, a So takes would for months. state they’re already it’ll it if think it’s new months, XX state, the we XX

Michael Carroll

And then cost it does renovate that? how to much

Dave Sedgwick

on completely needed. rebuilt completely That depends renovations of scale the

three, really required four, million are others maybe two on might or Some require needed. depends what’s a just

Michael Carroll

Great, thank you.

Operator

Siversky next Berenberg. Our from Connor question comes with

Connor Siversky

environment, this possibility facilities based how of again, some or operations But any disruptive maybe reposition within kind is that that, to in in of this Thanks, expand some portfolio. operations given given up region we potentially operator to or stronger to an here. facilities? within the to particular relates question distressed to it it on something try then and similar a start, portfolio sense and And I’m you these able take second that see the that a broad going are would you’ve zero fold Ensign identified, likelihood to the their in operators step these get of do your within

Dave Sedgwick

would, your the really pandemic it’s is and first this shown think that question, yes, leading those operators, into of strong the very were who has I’d weaknesses pandemic. say the part that of I magnified the and strengths

those a well. margins of struggled. think more have reasons, really have the on really For host who were done I And

and come would strong pandemic that to been to this will the before able I on during the are yes, think those be market have that time. who So assets who guys during capitalize

table of these re-tenanting are terms the XX options that. for In all on

we the you and here as of As we a sit majority determined or But that today, minority be I repurpose we out would re-tenant have is we’ll XX those. would to update of guess plays how information. that sell

Connor Siversky

you. Thank it? Got

Operator

with comes Markets. Juan Sanabria question next BMO Capital Our from

Juan Sanabria

question is kind Hi up of just real repeat your to just assets the impaired on at the obsolete underlying if of sorry. the there’s kind more XX Jordan’s than point. rather assets, wanted views it follow I the guess actual curious operator? themselves Are asset on the one of would be questions. this are I estate Just offenders there that’s

Dave Sedgwick

difficult the Yes. It’s operator the separate facility with as at pretty from continuing folks. look we to property, the on

really So that I wouldn’t on front. make a distinction

Juan Sanabria

And sense do which were so? stock us front, tool. parameters the that if then of with dispositions use as give find willing on Curious or you take buyback leverage you you would to a you fund can at back buy to any compelling be just on point the your around you the and mentioned to would leverage you if

Dave Sedgwick

take I it. Yes, will

if NAV eager of a to so much that So it probably won’t it’s give feel company a guidance to being function that is besides a a that get we pretty the talk bit what where lever. and enough that situation pull a at we on to at repurchase discount a probably would on where like trigger price be willing a about tricky we you and pull is we to to about talking program we’re and of

Juan Sanabria

And use the of so? leverage to do

Dave Sedgwick

the do the it’s be Bill all need that? to want in but coming given going proceeds timing. we would to we have to anything think add don’t on to that that fact I dependent No you

Bill Wagner

No I don’t.

Juan Sanabria

then can quantum Any and views question effectuate? or of make about dividend And may last given for be your looking just on that me. not to you’re safe one how what comments you the the

Dave Sedgwick

Yes.

dividend. to it not don’t about the March. how until We’re make going increase decisions concerned we’re much about We

So that then. on you can decision anticipate our front

Juan Sanabria

you. Thank

Operator

back call turn President And like Sedgwick, would CEO. I’m not I any showing the Dave this to time. questions and

Dave Sedgwick

Well thank you.

really to for the especially support. for of We’re grateful time all and Grateful the shareholders the attention questions. our long

We’re year goodbye. for what say we’ll that this With brings. excited

Operator

Ladies this conclude and presentation. does gentlemen today’s

now disconnect wonderful may day. and You a have

CareTrust REIT (CTRE) 18 Feb 222021 Q4 Earnings call transcript