LTC - Earnings call transcript Q4 2020

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Operator

Good day and welcome to the LTC Properties’ Fourth Quarter 2020 Analyst Investor Conference Call. All participants will be in a listen only mode. [Operator instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Before management begins its presentation, please know that today’s comments including the question-and-answer session may include forward-looking statements, subject to risk and uncertainties that may cause actual results and events to differ materially. These risks and uncertainties are detailed in LTC Properties filings with the Securities and Exchange Commission from the time to time, including the Company’s most recent 10-K dated December 31st of 2020. to events update date or presentation. obligation to forward-looking of no the reflect circumstances undertakes revise these or statements this LTC after the note recorded. Please is event this being like to now I conference turn over would Wendy to Simpson. the go ma’am. Please ahead,

Wendy Simpson

to Thank Welcome XXXX to Call. everyone. you, Conference good Quarter LTC’s and operator, morning Fourth

coming done the and today’s a staff somewhat Co-President keep thanks today Chief has any from like I’d Investment Kessler, pandemic Financial an call and offering and have sincerest in and to patients, be off safe. but our road, by me residents resilience our partners XXXX to been they history different keep and Joining industry. our Pam Clint doing and Officer; cycle of for to our uneasy Officer. for to Chief operators are shown have again Malin, other to through It the and end Operating continues start Co-President amazing their grace. thank all

exhaustion, citing census is health close certain the length squeezed REITs, elective this believe the industry challenges, challenges current out levers have do in that calls ‘XX exist During bottom. labor of heard ‘XX, normalcy. margins, not growth or By do other levers to move-in to stay, financial creating now, care has home reports and return could all to read a of you decreasing cycle. care while surgeries, on holds operators. hit earnings We or Similar waiting pulled be news health crisis,

to we census see available and settings communities opens current confidence services Johnson Johnson hopefully, more even As and aggressively stabilize widely should & improves, and their up, vaccines improve. these consumer third from current visitation market in and the and the facilities continue a utilized, become

low. remains visibility events these to However,

our with they placing predict built recover Because can to conservative that LTC. for senior and highest foundation of states industry needed, need we next continue we be to XX the the projected properties when strain XX-plus increases of our So, have the from are without and arise, successfully we concentration years. with Government our a sheet, to remains balance of and and for important, pandemic. industry aid flexible some LTC or which might hasn’t are lobbied for have of industry abated much as to fully has a needed the also in operators, the support vitally support will if on over our happen lobby advantage population states undue when highest effect care take can’t able opportunities and ongoing and continuing strong in cohort provide The support. associations investment the

hospital and stay the the be to seen likely was increase will the is We this it, necessary. aid spending believe extra believe comes Last support including health to and more medicaid the forthcoming With temporary in administration with COVID extension waiver. emergency much pandemic public further on in We keeping new regulation additional federal matching attention month, three-day likely. a crisis. place related the through It extended corona’s be how April it to X.X% governmental additional when remains declaration XX, funds, and a arrive. is federal will

the to levels been has status help bipartisan care ensure facilities by retain after was staffing maintain a can certification and COVID-XX bill adequate temporary to their declaration allowing emergency Additionally, drafted that senior aids communities nurse lifted.

will aid support the $XX being some stimulus to unallocated, prior about in operators industry. incremental of provide which addition hopefully remains the billion package new In to negotiated, earmarked

Fourth strong rent interest quarter now income deferrals Moving discussion. with start were mortgage to collections I’ll rent more XX%. abatements. at LTC-specific and and

relief thought it to disclosed, an they approximate in our form million rent proactively offer an XXXX XXXX. $XXX,XXX the we revenue funds impact on in operators and FAD. impact of credit that had escalations. our on prudent have partial GAAP reduced eligible The rent XXXX so to expected all $X.X approximate additional previously is provided XXXX early partners We As to to relief was our

As we discussed support to our Board announced various shareholders. our responsibilities provide when program, ways we noted LTC this to fiduciary balancing for while

FAD are while will So, transactions funds we efforts be on the year. reduced, replacing focusing accretive this with

we operations, corporate basis will from provide requests health operating will for additional with and financial a each them liquidity. case-by-case shortly. careful We them, ongoing and evaluate evaluation additional receive on rent support coverage, partners review we’ll of Pam color as operator’s

for operated currently for focus communities Next, us I’ll a LTC. as is discuss which to portfolio, area work the main Senior we of XX transition have our Lifestyle they

on operators. So and remains goal challenging quarter, M&A the the living LTC assisted One existing the operator other is to complete partner. communities our have first end far, of two to market new is the The for some the XX all And spend is time we in SLC-related Clint industry. second specifics. an by will transitioned quarter. transitions to the

through there we deals when need do and guidance existing we’re the wait then, to too use at the appropriate market see relax so provide for grow cannot develop our we complete development are see regional financing but instead will shareholders. for help now, not reduced relationships to Right XXXX, reasonably dependent to large expect risk lease-up we time. that done, engage we we ones we not to are sheet balance begins that up, solidify current until or to can standards, a census. When returns, opportunities. ready and transactions they provide businesses. this to uncertainties to partners strong of being immediate plan projects considerable and wide feel accretive Until range on While to to many foreseeable interesting success our provide for in we continue do opting open opportunities that We new their underwriting deals in operating act structured we not with especially are to finance plan the deals for future, participate any seeing profiles growth our we growth in with

I’ll turn Now, call Pam. to the over

Pam Kessler

abated, fourth Impacting in in granted rental our lower portfolio and compared tax quarter. results Thank from a Preferred you, deferred property revenue reduction last XXXX, revenue with the Wendy. were delinquent in revenue XXXX. Total the sale Care declined and year’s rent of $XXX,XXX

and Additionally, year certain in the XXXX. timing completed two in we preferred income $XXX,XXX of XXXX, of rent to from of contractual Senior quarter the was fourth taxes. period senior Partially offset Mortgage due equity and as investment $XXX,XXX $XXX,XXX G&A in rent in due increases. well the preferred primarily collected projects, timing a the $XXX,XXX, increased Anthem due the fees from venture, care. fourth interest decline in expenditures. quarter as increased and rent to past payments of higher joint the care unconsolidated offsetting senior acquisitions a scheduled from rent development rates our principal a prior from credit senior XXXX the of of expense legal Income we unsecured the dissolution investments in compared on of decreased payment the to due reimbursement XXXX $XXX,XXX projects. property from decreased joint made receipts balances and XXXX to due outstanding quarter ventures with escrow due the tax equity Interest related by to Property Lifestyle of payments our expense notes. and decreased line funding of under interest of expansion expense and tax renovation lower fourth

million a community we a Lifestyle. by related memory During the of in impairment re-lease efforts operated to associated $X charge The fourth Colorado of quarter Senior XXXX, impairment with recorded property. our care this

sold loss to the ventures the in charge quarter joint of related fourth $XX.X and a we of unconsolidated a million $X.X recognized received quarter liquidation Senior proceeds comprising of XXXX, venture. impairment joint million the XXXX. $XXX,XXX. During JV recognized properties we The liquidation of were Accordingly, four on the Lifestyle of second

resulting This of rather hurricane $XXX,XXX in rebuild April the deferred we the in a year. XXXX, sustained During than sold venture. million. an fourth closed two and center fourth loss $XXX,XXX nursing rent the final XXXX, additional related cumulative XXXX, Texas. of amount a unconsolidated proceeds of other last the and Senior loss of properties $X.X we $X.X gain Lifestyle of related provided liquidation quarter to of the insurance of joint this fourth it, damage to quarter million in in a we We property skilled quarter recognized from of recognized In in it

While of XXXX. fully quarter the has repaid, been since rent full this they second amount during failed to pay

July we a to total related As wrote result, of of master this rental effective straight-line revenue off $XX.X transitioned XXXX. lease and a million basis, a rent cash and incentives recognition to lease, receivable

deferred quarter receivable XXXX applied the for remaining acquisitions the million completed property million, rent abated impairment on third quarter delinquent second year’s accrued rent Preferred rent unaccrued decrease to fourth charge. totaling decreased Lifestyle’s property and quarter XX, of by quarter included impairment $X.X of $X tax XXXX Care million. we quarter $X.X the in and the December credit receivable to $X $X.X XXXX diluted rent revenue, loss million $X.XX XXXX increased and with sale, $X.X to interest million related income and the FFO receipt XXXX, in of deposits shareholders fourth of $X.XX and projects, sales, was and and of XXXX, quarter of in fourth rent. Offsets fourth a XXXX due fourth the is lower fourth $XXX,XXX, available from their repayment, net common letter year million resulting During Net NAREIT prior care quarter XXXX proceeds. At the gain Senior fourth expense, the increases, the from senior balance and quarter. to of rent past rent $X XXXX the the insurance of XXXX fully from prior million development per primarily notes of share charge,

Excluding share the program. excluding FFO proceeds XXXX, fully the resulting of fourth shares from in lower under gain, buyback in XXXX FFO, the first was the outstanding quarter per due diluted quarter The in the our from $X.XX. of to insurance XXXX, in of was weighted share $X.XX increase shares average purchase gain

to now investment Moving activity. our

million to previously commitment the Washington. development of community During the Vancouver, fourth XXXX, assisted preferred XXX-unit we related announced our quarter $X invested equity and in living $XX million independent a under of

earns of investment a an cash and Our X% XX% rate IRR. initial

expect the joint accounted We our investment venture. of the unconsolidated end for fund an before preferred of million equity to as is investment $X quarter remaining XXXX. The first

properties we development in $X.X also $XX.X and weighted funded at We common own paid X% and million a of on dividend. capital average million rate improvement in projects

XX%. XXXX on under to currently properties three renovations Our was ratio expansions have Michigan. $X.X million of FAD in mortgage related commitments remaining We and payout loans

of of liquidity million is also borrowing, scheduled We Including under we $X line which unsecured with end under paid $XXX notes. unsecured our $X.X credit. payments credit, this borrowed cash, approximately line of of our program, principal million. in to quarter, million the under have our the $X senior million available $XXX million Subsequent million regular under $XX.X on and in providing we ATM $XXX.X million outstanding, LTC our

Clint application to not As average, conclude of the three remarks ratio including a to debt with provided XX% to Lifestyle’s related interest of charge the to abatements. which $XXX,XXX REIT rent fixed on of industry rent rent remained private significant letter net of debt adjusted deferrals repayments, collected a metrics At deposit. rent five annualized of for earnings no our health operators quarter, the I’ll deferral, the reminder, maturities fourth quarter and and XXXX we value a times real $XXX,XXX over net credit discussion collected, X.X my abatements rent of EBITDA related our credit fourth previous enterprise and X.X pay and debt call. long-term care compared annualized were estate have favorably the the approximately with and adjusted of with of next to times mortgage We XX%. years. mentioned and coverage income, of end Of Senior

paid mentioned far by so earlier, contractual $X their XXXX. in I have and no they remains delinquent Lifestyle As XXXX in million, Senior rent rent

net X.X% For deposits. XXXX, rent, abated, of did letter XX% was of application Lifestyle’s collected not Senior rent credit we net date the X.X% of deferred XXXX, Of was of X.X% and the collect, $XXX,XXX, all including contractual we three and of of operators remaining deferrals deferred in was mentioned. the repayments. private delinquent. to $XX,XXX same These far, rent deferrals relate To previously the so pay totaled X%,

who Clint reduction escalation XXXX Excluding rent more detail. rent rent former the date operated to operators receive $XXX,XXX. transitioned did from discussed, date. We in to provide communities the rent SLC the abated credit will related to is already

Now, to I’ll over turn things Clint.

Clint Malin

Lifestyle. I’ll start with Pam. Thanks, my Senior discussion

for X were are Illinois a Ohio amended XXXX operates thus under strong solid and thereafter. now with regions. now The partner XX a X acquired and amended operating X million buildings in the these who and There Encore cash Combined, were important part Ohio second and Randall regional year, transferred, building the with those, by in of to a evaluate for transitioned three are new annually remaining. transferring portfolio. in of earlier, transferred X% selling transferred rent is of communities presence to the XXXX, be Partnering strategy, and escalating Encore regional player with Illinois the a new second quarter we all XXXX X properties. Wisconsin years operators the an On expected X and current X remaining said markets year Cash XX Wendy great of lease is renewal which X transitioned million and annually the the X to Senior year remaining first Encore, XX contain Michigan, in extended $X.X began Residence, $X.X market, the has of LTC’s in the by with We Of is communities. communities year, of $X.X Of and five-year in As lease an options. be under working units operator, end X% X our LTC that are their master of new in nine Senior founded with January will communities, the the us. and million Upper be local the transferred for to XX properties units. Living, are their will QX relationship continue and properties XX-year in properties first are options far, $X.X located have XXth, X Terms the in Lifestyle Randall the Living. our Xst. for living when assisted were transferred February period master with a before a operator Randall they the already in is with of have first one to were assuming communities million timely in Encore major due the of XXX the under XXX year, Randall, a by year for value operators by we X to total to on added under were an year, lease. third three rent ability these these with intend the the the and expected X closing end master a end we we the in by covers of quarter, properties QX. for the $X.X long-term $X.X examples lease of have LTC million lease At to expanding The while fifth $X.X Wisconsin, of one are operator communities, existing Randall X an properties. The Randall. master net for second Senior of third and escalating lease X thereafter. Midwest. million contract first locations presence The Incremental diligence. with we to to properties of book subject million. at sell remaining completion approximately with

of those being and X. One for are options sold evaluating the is alternative be use, properties and an for our remaining we will closed

development recent in projects on Living, like by Medford, most line. last to to update Weatherly residents Senior our I’d operated began which quickly Fields is Court, accepting September. located on you and Now, come Oregon

opening was pandemic. of the October occupancy XX%, XX% due delayed of XXth, XXrd. February on community from this was The As up to

because newly opened for eligible As the government was and of money. Fields a property, stimulus not a as result delay

up $X.X December all Resort At Ignite remains in to in million provide them October of and patients began concern. Medical XXth, us, on X Genesis we to ability in X in Mexico Independence, rent. current is Springs, its master for discussed agreed additional XX, Genesis October. X Blue free Alabama. obligations XXXX. and of LTC. quarter, XX%, to Brookdale’s which have on properties matures Last XX% occupancy They New Missouri, lease its disclosed February doubt located We welcoming last from XXrd. continue growing as on a operate its lease was regarding

the period. April option X, on four-year a extended on operated SNF X% Of aside and under funded for contract renewal, with have is notice in sale have in a commitment. period first $X yield. this In The we quarter. million began January The lease XXXX we is commitment renewal for option from XXXX. To lease $X only is XX, that XXXX, for The under December XXXX, million closing other capital note, renewal which date, we second expected ends one lease the this Brookdale, Brookdale XXXX. a expires available through the to at of XX,

our discuss portfolio I’ll numbers. Next,

EBITDAR management and given pandemic times future These the coverage assisted As allocated on time and performance as created, we discuss operators challenging trends, believe these the are using shortly. has respectively, a the don’t a portfolio. no with good which X.XX are mainly living QX and funds XX-month environment their reminder, a metrics was it statements. and same and of is without our I’ll coverage occupancy focused trailing at X% stimulus P&L this EBITDARM indicator X.XX fee to for times, funds

increase living from Senior Excluding respectively. Lifestyle portfolio, EBITDARM times times, would our to and EBITDAR X.XX assisted and X.XX coverages

EBITDARM For EBITDAR and our skilled and times times, X.XX coverage was respectively. nursing X.XX portfolio,

coverage stimulus funds, was EBITDARM was coverage times. and Excluding X.XX X.XX EBITDAR times

portfolio, which as Now is January of XX. for some in trends occupancy our

total data to Private our nursing approximately pay XXth, reminder, that XXst includes and December for at for the skilled XX% is at provided specifically; us information expedited partners and Because portfolio, approximately pay voluntary January for on private September average a As January XX% are occupancy a our date the portfolio, XX% skilled is units providing month. XXst. the at beds. and occupancy was and of occupancy our XX% our private of have we basis, XX% pay our of

the might and For occupancy when occupancy skilled We time upward. monthly predict nursing, same XX%, periods, for XX%. XX% cannot respectively, trending average begin was

as be such regional us that are that price we provide for and when growth, future. will quarter serve will right a to at on call the her our liquidity focus into preferred vehicles that XXXX announced with growth preferred market. better need. using transact will existing the back Wendy for complete we risk-reward use return, last profile they transactions with to we confident validate Until far can the new strong we The Regarding our mezzanine in to right deals building financing time, what With equity while we capital the relationships investments successfully and ability believe remarks. equity smaller turn this that, closing the I’ll to we operators

Wendy Simpson

the is Thank when us give to an focused return is and industry, you, pandemic within that working and Clint. The industry starting and will will continue caused we pre-pandemic better. pandemic, on exactly stabilize rollout the of new things and the can’t hard things confidence Pam consumer considerable The administration hope are levels. has country to that occupancy and begin vaccines, restore COVID that determine get our disruption through to to a getting turn to

always very through investments generating ready to been has us type a as opportunities and to growth REIT as withstanding the to its that worked is we company and to diversifying as partner As a done portfolio, new partners serve hard choice which a continue LTC allow to of build continue and managing, its its crisis capable a a differently. able of has of company have enhancing sheet balance operators that viewed

Operator

come question-and-answer ahead. session. go first We with will Juan BMO. the [Operator will And the from Sanabria begin Instructions] Please now question

Juan Sanabria

a morning. deeper just everybody dig on well. I little Good doing Hi. wanted is I Senior Lifestyles. hope to

XX out transitioned of You’ve XX.

on think You’ve those that assets those to are some rents sense you up transitioned, numbers sale? assets, rough the give transitioned. or given maybe generating guess, us around those been Senior XX of that that are And just the assets go-forward could on to looking some guideposts rate the keep sell holistically, But or about have a us as go-forward you’re that run EBITDAR the potentially for Lifestyles. to holistically you assets have I to planning how the

Clint Malin

operators, Clint. end Hey what’s right it’s as happened I and the sales the be quarter, give Right buildings. in buildings of we a there’s over expect hard is as we we’ll we and ramp-up transition over XX but last at which forward. which in not these impacts rent of with to But, other the to seen time going be able over we’re numbers. because you’ve now going staggers And transitions provided three-year see the is Juan, detail now, said thing in completed COVID mentioned to few across to can on midst a the these in builds with of to date in this having do two performance, information the of which our remarks, the I you provided as a transitions two to in one guidance -- think, time, the We’ve only sales, to the give and these my buildings, of all country, anticipate the of up rent period. that QX, by portfolio specific

Juan Sanabria

assets at maybe that values about not this asset and basis total maybe provide point? you Can unit meaningful really units those given on think you how XX NOIs under the maybe per a

Clint Malin

-- On it’s the don’t on the number. in just second. a get think just XX, I’ll you right I’ll relevant units have metric per for the I I a units, now, as get far don’t exact unit but them as a the But,

Juan Sanabria

there on the how at insights Any happening would can Okay. this really sense helpful. on if give just that’s main what the by you two Genesis, there going and a on us being run discussions be are of may be discussions the you what maybe are into -- discussions point? involved And going creditors

Clint Malin

portfolio. overall mean, I of Sure. small have we we’re -- Genesis’ a part very

with inspections. We And do have property relationship a we have discussions performance, long-term active regarding Genesis. had them with

we’re piece a their with of and small interacting been again, them. dialogue, overall portfolio. there’s But So, a we’ve

Pam Kessler

are on But of any aware that discussions that. not restructuring or anything like we’re for going

are if a you’re we discussion haven’t invited a discussions any asking, if are on. of been a there into, of going So, reorganization, of part those we restructuring or

Wendy Simpson

And I now. restructured to, reminder, year lease guess, our we as last XXXX a

ago, a lease. So, couple we years restructured of our

problem. So, we their believe of don’t that we’re part

Clint Malin

we’ve as on as years buildings And mentioned, Mexico of of previous talked thing we last New with increase. and rate calls, are over I well Mexico. as about increases seen, Medicaid one tax And provider five rate had the New as has the couple Medicaid in just a flat

seen So, increase Medicaid positive revenue they’ve portfolio. some which substantial rate this the side, has for been on or increase the

Juan Sanabria

Great.

last from one one Just me.

For Brookdale, to option? that you is us lease be their what’s sense about sense might give think they and us they’ll a about of the whether thinking how coverage of or not, help renew could

Clint Malin

renew. going I’m or in that they a to hazard not not guess will

I it’s encouraging commitment a capital that asked last think they for time.

Wendy Simpson

And they’re spending it.

Clint Malin

it. And they’re spending

As million date. funded I mentioned, we to we have $X

even that down positive has So, Brookdale It chooses has put this, sign capital portfolio. positive obviously done that overall, That’s renew been a Brookdale come Performance bit to which into been not positive. there’s a well. that’s strong has in the But buildings, sign. a I in the if pandemic. that’s the little think fairly a portfolio been is

with not. of is them are product to be they Brookdale a extent their multiple strategic we in think, have we portfolio. to or them I have renew a with it’d probably states. more in The product core buildings want for the type The decision

company. they differ on we what that a operate like basis -- that not in have are assets from it’s larger their So,

Senior So, units. we on contact X,XXX do we’re at Brookdale. And making should decision on that. we’ll next for on number, this I in the have call, with they know the point, -- It’s our Juan, will what units Lifestyle. be

Operator

will come Sadler from ahead. question next Jordan KeyBanc. go Please The with

Jordan Sadler

pick if So, for could, wanted just off I on left to a I off Juan second. where Brookdale,

through additional you and retention. So, think one, renewal through is the options? open surrounding four-year that’s April XXth, any color the offer can -- I Just option us renewal the window renewal

Clint Malin

correct. That’s

Jordan Sadler

April let’s XXth, just two you don’t -- options if they can by exercise, three? explain then, so, And and say

Clint Malin

properties. take if mean by additional I re-leasing over to renew initiative to they [indiscernible] those find operators

Jordan Sadler

And they April have you you renewing not basically for they they by to know. They know XX/XX/XX? whether let said let to or have XXth,

Clint Malin

we it time Jordan, leases, the actually forward XXth. June XXth. to was moved In previous the April renewal

a facilitate gained couple to transfers needed. months we if additional So, of

Jordan Sadler

Okay. But, have or they have by years X or you April XXth? for -- or they renew have years know you, to -- not to whether let they still X so essentially, XX you years or what

Clint Malin

That is correct.

Jordan Sadler

Okay. clarifying. And as not helpful there. Can Thanks for and separately, SLC, quite that’s to then, -- relates you yet there’s bit it know complete. color I a some

understand XX the is so, there. Maybe focus in we what pro And a the sense just the I you just rent effective if Can for XX, the on a sensitivity of sort us of of on XX second? one give those year reduction the apply reduction? rata

Pam Kessler

allocate don’t are those in we with lease this Lifestyle, Pam. master rent. Senior Since is Jordan, a

to your be just best I want So, however, way, however if you were... guess, the model, it allocate you for would

Jordan Sadler

-- Is would for there be appropriate allocation I anything that any -- so not a reason? I mean, pro mean rata

Pam Kessler

to have Well, no, I proration. sort mean I do guess, of you some

in analysis looks coming like with back to but and be be the in still number process the right Senior what still we’re for of LTC wind-down And would cash what best XXXX would that on the working to Lifestyle use, now. We’re on working that rent.

have you. as soon for update we you. do, we But, So, don’t I will as that

Jordan Sadler

the XX, the transfer remaining you the and the those transferring expect are on by end others XQ? was then, -- to can scheduled And you -- end and of you’re so one those through me be of of just five it Again, fair. dates? those or run by four transferred, That’s that XQ Okay. to of

Clint Malin

Yes.

Jordan Sadler

those are two a operator And new existing? or

Clint Malin

portfolio. another be an and there’ll operator, to will One existing to be new operator our

Jordan Sadler

were being XX lastly, ask What -- well, And the just -- of Okay. then, the are coverages that the actually, that you sold let sort let me to? are this. underwritten on me ones

Clint Malin

targeted because one. expenses. at we little I say, is or to I It’s one little -- of a mean, COVID challenging year hard -- stimulus have there a are is well, look would year -- there

We’re going off…

Jordan Sadler

how you It’s look so at it.

Clint Malin

sort of to looked long term have But give going include us be -- this to forward. to operators coverage provided able coverage. these to We’ve basically basically, we’ve new credit support for at

So, is at aspect lease the there that’s the their rents how the the coverage assets. is that for operators, related we’ve these looked where existing to setting re-leasing are leases adding into new

Jordan Sadler

Okay.

on Senior -- January, anything think -- credit letter from paid sort incremental line about deposits. to we February. I of the pay Lastly, the of I utilized how guys What’s credit Lifestyle, ability think the know they do How fully haven’t guys just you and do of here? or you our and about know likelihood

Clint Malin

from We’re additional previously, bit similar Senior that wind standpoint. at a we And a rent a not they’re look standpoint, from in little venture joint they coming hopeful to be down this to the exposed that with this. think did from liability them trying there’ll be Lifestyle’s I

a You turn can additional funds us. and to management get over the fee

mentioned, to now As Pam those mill they’re through see analysis right going liabilities a what are. wind-down

additional once So, we are that cash analysis be rent some by hopeful is. there complete that Lifestyle will the what see position is to Senior

Jordan Sadler

So, personal corporate? do or recourse, you either have additional

Clint Malin

from that that come would be where operations would to the this our this to credit, funds -- which in from additional letter security cooperative Senior I funds economics understanding of mean, sales, was And Lifestyle is been the but extent the flow unwound facilitating LTC. would some general the the deposits, cash process, the that’s there’s transition, have We and in of how positive reside. or this stimulus and has those

Operator

Connor from come with will ahead. Please question Siversky next go Berenberg. The

Connor Siversky

what made looks kind in worst-case in with to like. is months going a on in the reference Midwest there’s First now asking occupancy scenario this the what’s and of right coming wondering you’ve level and if question weather. of for that take-up kind the just I’m high just

Clint Malin

I haven’t given and visibility think, crystal a we that, not on a there’s mean, that’s I ball, lot it’s why of guidance.

vaccines the stored effectiveness -- at pertaining when initially I today extreme apparently indicated. were look would Johnson, out So, be there it’s & provided the single the that. regarding to be positives speculation Johnson that about the dose, some temperatures But, of as were vaccinations you well not studies there of out Pfizer’s the guess, the vaccine as a can at rollouts, news that regarding some

vaccine rollout hopefully anecdotal some watching the acceptance quarter-by-quarter we’re this from a are and regard But, stability unfolding and this from is provide basis. on than in resident the all census. positives some there’s the as those populations So, that

Wendy Simpson

that nursing vaccine top showed skilled And vaccine the a housing industry Yes. NIC sharp that of for encouraging the think, I put rollout. senior some in, layered think with on the cases data cases that was and it’s on out coinciding rollout. I in new decrease showing

I that not if troughed occupancy, call mean, in So, a we’ve here would is, to That but hopefully, willing that quite yet. that think, that continues. positive, we’re

Pam Kessler

had yesterday with Clint taking were or was who it on Well, Senior And operator who call buildings. and and X of an X the employee there think I a COVID. one is the X, Lifestyle I was incident only

those three COVID-free. are buildings So,

is a So, that point great touch the industry. for

Connor Siversky

excuse one And one missed the That’s appreciate last this. there. color I me, then, from helpful. I me, if

operator, then, the rental that of part of Brookdale, on that you that that’s color end? provide facility mentioned. the coverage how in is other is Clint what skilled for as other For and of believe progressing I conversations that XX.X% income any be that And to can part may lease, the nursing maturing XXXX,

Clint Malin

it’s have -- been building more actually It’s sale. simple. just we the one It’s and Brookdale for

lease in I of XXXX. then, is sale. all that’s single lease, which, mentioned, under Brookdale contract and in just It’s asset the a leases two So, for as renewals

Operator

Carroll question Markets. next RBC Please with go will Capital The come ahead. from Michael

Michael Carroll

color, know, to when provide get you’re that can into talking to I guess, that I go get Pam, down completed? that the some timing Lifestyle, or what you’re to the some expect to wind rent what’s on or guess, the of And, that’s portfolio? has about Senior you is completed. of I going Clint,

Clint Malin

were hoping It’s was we the process. it Well, yesterday.

is to there’s as trade PTO assume transition. through those, could the consider. -- for as going termination equipment, leases, if aspects to that operator got any payables. at like look account far be insurance they There’s There doesn’t could lease new there You a is those costs, things

that working So, next And see Senior look where at to the we’re Lifestyle been expecting that. that this has point, on week think is. initial I at

have on additional next So, our more we call should rent... color regarding

Wendy Simpson

Pending stimulus funds...

Clint Malin

too. funds, stimulus And

Wendy Simpson

pieces moving So, a couple there. of

Michael Carroll

Yes.

all we Lifestyle be that to that see be to it some needs Senior some had? and/or ‘XX, or there sales assets then do to from that So, be first -- completed the start in -- complete quarter is expect you buttoned before and the legacy rent rent need more in these they should of transitions and could up payments coming

Clint Malin

with transferring a there single asset asset else have a asset be we’ll that no everything be would but only There’s Senior one where single has Lifestyle rent lease, effectively support we one it. with whereby rent there would be of associated in year

Michael Carroll

first and need does week. down is expect look it your know rents to to some you’re paying I going new before the in said do you’re wind are is the initial question should how final the completed to transition kind numbers to this? my that getting you relates operators to take mean, I I they assets willing rent? start this that of or really receive long quarter, you see all have once backdated finish next we to guess, we

Clint Malin

Our current it hope a see basis. in that we’ll is come on

Michael Carroll

you that a February can operator was rent defer to that the year. know I status that quarter you’d about, $XXX,XXX was I what’s first Okay. the there what, mean, them? rent ‘XX? the And you of from as operator? balance talk disclosed the in of And, the there agree then, about of additional January, deferred end little needed other at bit through

Clint Malin

deferred additional There on rent was January, February, Pam some discussed numbers. which in those

paid what they in They in that assets far deferred to taken. pandemic. back value-add increase had census, So, portfolio, as that’s portfolio. in and our also we of they -- trying and were of was as or their had that some stalled lease-up that operator. operator the to Buildings seen some part did had that with We’ve the the But, rent cause. it this relate QX, lease-up encouraged

operator. this So, to what happened is this

Pam Kessler

rents, the operator. that of I $XXX,XXX -- mentioned deferred net deferred to first XXXX, about Of of $XXX,XXX in the related quarter

of most them… from that So,

Clint Malin

Majority.

Pam Kessler

Majority, yes.

Michael Carroll

And then, can’t is mean, you on could that on me, can provide what communities, to for Senior I just XX provide? that real something Lifestyle -- asset uncertainty EBITDARM breakout. or those of portfolio the that to I percent last some And back know one what you there the from is related from quick. Okay. that you out break

Clint Malin

COVID information. provided at. funds, metric to haven’t and We it’s hard look expenses a that some stimulus With

So, we’ve not that provided information.

Michael Carroll

that XXXX based Okay. or provide is run I of of it off mean, you not let’s could that rates comparable say just anymore? pre-COVID,

Clint Malin

probably point, not be honest. to at this That’s comparable

Operator

next The question go with will ahead. come from SMBC. Rich Anderson Please

Rich Anderson

that rent credit, million the FAD did the on first the So, all in impact, quarter? happen $X.X

Pam Kessler

Majority of it, yes.

Rich Anderson

but and is recalculate you that straight why credit the it the essentially $X.X the way then line, GAAP a the million, works that’s is is totals And revenue impact, it’s Yes. correct? that lower

Pam Kessler

essentially, Yes, those GAAP for yes, Yes. accrual a on that are Yes. on basis, are basis.

are Yes. product have We basis. cost that releases

Rich Anderson

I understand.

talked far we great. you as escalators, of And actual But, the no there’s continue goes, how then, as -- to will process know of on of just it. getting forward, rent right? kind came only It’s credit. kind Okay, up escalations rent the change kind the that’s I going the record. the about off with It’s level. original

Pam Kessler

is correct. That

Rich Anderson

it reflection talk I about that a course, X.XX It’s That I to that you much other would coverages. times, too to skilled course. perhaps in proud nursing, good. of arrears, I’ve that. Clint, be numbers and of was excluding a you sure. of on should don’t stimulus quite want calculated of get want But heard. said, say, times just to I make being relative is Okay. said not quite you current quarter

a that than we’re we lower occupancy. not probably lower in dramatic say, at at were X.XX, that we’re now, well, is or Do have XXX basis around about you’re math would parity basis points starting impact? occupancy So, XXX your fingertips points you an of it

Clint Malin

now, our with thing have That the that skilled may that done has heard a cases of up. mix change bit analysis one right operators, COVID Rich. little in we’ve seen haven’t down. portfolio we We that anecdotally But, from trended and going of this

So, that incidence I to as cases that seen have as what the hard you’ve COVID the going the December it’s same, what impact stayed January the -- increased and think three between But, reduced would vaccinations heard through clinics. buildings, be. occupancy we and far and at speculate relatively the of

positive those hopefully, all occupancy are stabilizing. with So

Rich Anderson

the is? a care Okay. you know that Has do what Last there employee, and hesitancy? question vaccine worker patients is, health Because rate been for the me we’ve been guys the hearing that in are side. have not residents same the so rate what you thing? the knowledge the it, health your Do the much accepting Are is hearing care portfolio? but of provider you on

Clint Malin

that acceptance. across staff that is the than heard board less acceptance we’ve resident Anecdotally,

we occupancy rates. information and the from vaccination January, clinics in the So, when we we data gathered information provided our partners operating for requested regarding

second of And about had -- the portfolio XX% clinics. reporting provide with XXX% XX% had our had gone for of gone we -- about had clinics So, XX% that first of skilled XX% reporting, -- XX% about our through the which and encouraging, to information was example, our through operators we those about clinic, -- clinic. the of

low-XXs, for the Our on and staffing based assisted assistant. resident the staff acceptance on and the operators skilled was our in level around both reports from the

Rich Anderson

said are you’re temperature course, that an variable, offering as to taking uncertainty it if external metrics, you not important clearly people I’m interesting relates of market that’s Wendy, the at perhaps picks there Hopefully, saying, to Last to question, coming to visibility? of be that a -- it’s And a and know getting are that’s you, when motivated up up all? your eventually would we out think. that’s understood. of perhaps wonder, you more that’s of I and lot inquiries waiting if Yes. part there’s pool have looking because but assets interesting I seller and aren’t to happen underwriting you reverse important there just it to out growth. change But, the

Wendy Simpson

of really had packages. looking We’ve some first recently have are the at stage packages looked We in them. that at

we think, coming the to the spring assets and are market be to in So, seeing going the some I summer.

the Clint to money be Lifestyle creating Senior So, forward some we’re of looking will the that assets. being spend of to selling some by able

Operator

question Daniel go The Bernstein will Please ahead. next from come One. Capital with

Daniel Bernstein

leases, -- high could the see I the where standpoint? set thereafter. three, like of or kind to, year the have kind just year lower over two, that to investment on lot think guess, lease when have year do Would a you Just a to structured you upside on the return that in wanted and bump about you mean, Do back I up, on go following day don’t are of on philosophy. of investments I day year rents restructuring one from accretive have you in to have for be deals two, consummate take the but then three are there’s you bumps you one, year one like those?

Clint Malin

didn’t couple a market, out, preferable this have and underwrite. pricing, lease. brought at we looked think, put operators, they the on work move to have in pulled but existing consider of off of basis. got the at ability with we function look definitely to us an -- They ultimately operators, of -- in presence to the actually with to dynamics able people deals deals be I one-off a working probably we’ve And master and and market strong where it just understand for a so but the have existing a markets to try a onesie-twosie deals into basis we on that they got existing could would where a

Daniel Bernstein

where existing already pool is more But credit and there some probably of protection. operator within your

as comments some like in year? well, but your leading indicators, moving tours of that. back going yet, from just tours, of not Have things of peers terms the any leads, then, heard you And housing Okay. from rebounding your trends those second that confidence and would leading could in of some about indicators may second the where occupancy quarter give half this or seniors heading, operators be us that those anything be

Clint Malin

little say a would I muted. that bit it’s been

seen challenged. that. You’ve season, bit quarter after incidence lot on was the the fourth over holiday COVID focus the -- -- was of little was a a with of that There

tours that trying think regarding operators gain lead nimble generation. do very I in and tractions at virtual looking to been So, have

see that on a case-by-case do Others have, operators basis, been flat. we with upward. some So, have trending spoke

anecdotal it’s information the So, varies. in It parts of different country.

Daniel Bernstein

kind kind share from been of has too you Do are COVID what’s maybe to how surgeries question might a that back going know skilled forward, little skilled Okay. have will what kind any a home sense permanently down, same and nursing, just census talk mean. turning back to And the of lot to as that going nursing, any taken or nursing census happen? about view of health in like the look elective have the bit the of of There’s a thinking are or what Do market that industry. improve you soon then, coming of whether you cases is that going to skilled expectation an that are back now up? might of

Wendy Simpson

have do We Yes. that expectation, Dan.

will high there a not that And -- the surge. acuity could a are start As be it’s cases those But, acuity solution to health those a higher because maybe lot whether say think, I were too permanent solution. electives as here Certainly, the put have come -- on or postponed I early discharge. been to have get start of hold home some you scheduled on. has become during electives know those of majority really the back, a it’s to permanent that more

you You the you know that need can’t won’t acuity to They know health, postpone same. they it because go be patient XX-hour recover that and going it’s home to high care.

just the we’ll determine it’s trend I to discharge is we’re altered. pre-COVID. -- have conventional wisdom to that normal, patterns if too the So, back been Right think, early now, permanently

Clint Malin

And the more that also, at of reimbursement PDPM. through model Dan, for look that think for patients. caring Obviously, to complex has care migrated

seeing, more by large, should and So, be skilled general. just complexity in

care. are discharges not home I think, viable probably into those going

Operator

Mizuho. Please Omotayo from come go will ahead. question next The Okusanya with

Omotayo Okusanya

So, you’re give market you Juan’s And, EBITDA you to could around what rents the a even, of -- Just of I Brookdale. if could resetting the and of what to a us to a So, rent sense if to prior ratios? change could just potential trying sense of coverage sorry, go current if question is? get kind sense kind coverage in of they be? renew, get again Jordan’s prior wanted back

Pam Kessler

is this Pam. Tayo, Hey

reduction would escalator do offered, So, renew, is the they the to rent option they have take XX% that option. they XXXX should They the of rest There of so the their -- have renewal majority it’s like a straight we’ve in credit no resets just rent get there. a our portfolio.

would in anticipate be not change would So we rent… -- a there

Omotayo Okusanya

Any would asking form lobbyists Any yet, regulation. or And the insight be government you comments, about That’s kind this then, government I you that what Thank could kind kind point the Okay. very you. bit nothing maybe opening shape of Wendy, the need little a your additional even for if take, of federal kind for sense is, of helpful the about support thing helpful. even in sense think, did from government. of talk stone and that’s at further did in talk actually the what clarification. second are of

Wendy Simpson

senior Well, industry not that yet. that and that will come be health the believe specific $XX an don’t I there’ll stimulus addition, industry, a allocation billion $X.X looking of the for allocated trillion. that out is for the was the believe from care we

is of that the there a discussed, lot money trillion However, for being in currently the states. is $X.X

help on their depending to the residents that the in support will certainly nursing So, state, how might industry. money the states use skilled it

allocated month. expected that X, some So, I some level sent have to I money Phase think, And this there’s X later to spent come be a good that chance is out relative and the to out. $XX still there billion stimulus hasn’t hasn’t think, been is been

$X.X better from trillion. of probably $XX some opportunity the the there’s then to specifically a billion, there get to So, is get

Operator

will question Stender next The Fargo. from with come go Wells ahead. Please Todd

Todd Stender

together, Brookdale we but how leases in that four are actually Hi. are time lease? you know assets Thanks. about And talking facilities? much master four Clint, I separate lease, the not to on blended spend too but master many

Clint Malin

XX properties.

Todd Stender

date, lease, are has a renews? right return you that the And on Okay, away, you once getting committed rolled get generating the X% you’ve for or capital into to got it. that the capital? Are that to new

Clint Malin

pay No, made commitment the was current capital and term, existing under it’s the yield.

Operator

the would go This concludes ma’am. Please over to question-and-answer to conference Simpson session. I ahead, Wendy remarks. for back like any closing turn our

Wendy Simpson

attending you our you. Thank for presentation. and listening Thank all to

you stay Bye, always, warm. of a safe, most you. additional if day, please you call. questions, have stay bye. great Thank give us As Have and a

Operator

attending The conference has now concluded. presentation. Thank today’s you for

now may disconnect. You

LTC Properties (LTC) 19 Feb 212020 Q4 Earnings call transcript