- Earnings call transcript Q3 2022

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Operator

Before management begins its presentation, please note that today’s comments, including the question-and-answer session, may include forward-looking statements subject to risks and uncertainties that may cause actual results and events to differ materially. These risks and uncertainties are detailed in the LTC Properties filings with the Securities and Exchange Commission from time to time, including the Company’s most recent 10-K dated December 31, 2021. LTC undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after the date of this presentation. Please note, this event is being recorded. I would now like to turn the conference over to Wendy Simpson. ahead. go Please

Wendy Simpson

Officer. Welcome, years, Call. operator. our Chief LTC’s Third a over has Chief XXXX Officer; LTC that can Thank accomplished pandemic in has joined everyone the by industry. Conference much Investment and Co-President I’m Clint last and altered pride, Pam Quarter I and say few you, the Malin, to With especially Kessler, significantly Financial of Co-President face

or longer have assets, performing million, were Year-to-date, investment assets $XXX several which over strategy since were serve to We forward. a and of well have should us of into not activity XXXX. no our number core represents transitioned sold capital standards, investments our to that totaled level investments going our that substantial deployed highest

to sector. opportunities wait-and-see take banks the are to created has our aggressively a that We additional in fill been investments identify void financing as approach to continuing

over President PruittHealth nurturing many done detail In strong regional LTC’s strong million more at our months, flexible I’d the who become rates. the This a over our was strong and a of centers our decades Pruitt an identifying those right with XX them times to more X particular, to age, and our building Clint at will of makes to lower package partners. than States. portfolio’s Doug provide relationships outstanding more and strategic adds Pruitt Managing to of helping nursing years. even Vice ongoing that creative with next and adds competitive, result footprint to look will As Business growth very average Executive provide operator formidable but shortly. and financial investment of seeking $XX in grow, are regional highlight our up operators and we The the off-market working partners, operator we relationship Development, substantial and potential a the Southeastern transaction job relationship kind solutions of like fair the this stakeholders. well ramp Korey, Director with creative able has a newer investment to financing activity right LTC recent a with We forward to financing and experience financing we were to PruittHealth, good investment to result, as XX and that regional skilled our also like our bringing United operator only believe just closely is for capital portfolio, we with utilize with continue for that them. the the worked not whom sense for

solid debt have a balance with secured maturities debt. and sheet no looming We no

newly debt We period X.XX% respectively. years period and and entering on in long-term a X senior our have loans and to based attractive loans, years, XX into of rate X term a our for rates issued our and of for agreements our for for X.XX% at X.XX%, a of in locking applicable locked swap notes unsecured including both, margins lock current term in respectively,

of line our credit. is debt rate floating only Our

our As to payout balance third COVID shareholders result to able conservative maintain $XX.X a our and approach, our of regular a quarter dividend, support operators of million. were with we monthly sheet our during

long-term for we are XX% Our FAD comparable to XX%. ratio and payout to continuing was ratio quarter, payout the quarter, was our second the third of which target

bad. not still successfully are last to challenges our work quarter, the news reporting do lower Anecdotally, the of meet operators is about some all to by gradually attractive. operators be in private several jobs in to and portfolio Rent said continue have utilization to operators our certain them in pandemic, allowing but the the pay staffing we brought our As increases occupancy of increase continues salaries more agencies, by making implemented cases, sector improve. to our

However, margins we and pre-pandemic so if return can’t challenges, inflation when levels NOI to predict labor ball with or murky, crystal will bit our a for is and our industry.

and Our quarter. that of the $X.XX increase share in Approximately per HMG. $X.XX guidance and rent will a fourth $X.X reduction and of FFO relates agreed-upon payment $X.XX rent million from resumption for Anthem’s increase the third between the quarter million to anticipates anticipates the from temporary increase rent, of $X

operated boring lease Our in and markets believe before, a assumptions continues paid economic but well through quarter. we environment. exclude the fee manage to future. does will I the positioned to based and a we remain LTC are our and of part might LTC termination a am We investment society. we have the and vital that some third conservatism through cycle, intractable is strong $XXX,XXX now prove weather care current tough tough is good a that believe our believer needs say the truly in that

turn I’ll Now, over Pam. things to

Pam Kessler

lease of from purchase required our under development skilled increased record was the higher of from to Interest year’s and properties quarter income in other from a tax increase and of The mortgage million to additional due $XXX,XXX offset quarter. mainly the rental due entity to senior first and in we income with temporary contributing and partially revenue million origination increase million $X.X in $X.X growth projects. this of XXXX rent $XXX,XXX related in by loans by portfolios Total a third to the we third Texas the property payment the and due income notes. the a financing acquisition portfolio rent Interest second leased X-property of for in from by are to made funding back scheduled Property quarter third Interest by to higher attributable Interest rent. under factors reduction tax XXXX operator our loan the interest last a to in primarily issuance expense Wendy. and year’s increase rental rates, we an from since $XX revenue was in XXXX. due quarter period. revenue, XXXX. by mezzanine in a due receivable XXXX, from of same acquisition total recently due $X.X to senior to the received year’s with paydowns costs million, third properties second due our option. quarter, unsecured financing Thanks, mortgage lower transaction GAAP, purchased increased as million a quarter, increased Other to transition in This working fourth last capital XXXX, during the second origination XXXX principal the a former mainly primarily of unsecured loan centers quarter term deferred master last of XXXX decreased the primarily accordance settlement year’s the $XXX,XXX loans, offset and on nursing from from last the notes offset the In income entity loan included by by million increased increased to by income mainly loans to leaseback originations partially Florida. $X increased expense to of quarter quarter Anthem properties. payoffs. acquired Transaction rent from sales, sale $X.X property and Texas third quarter three completed from

by acquisition by our principal mortgage centers funding partially skilled $XXX,XXX, increased as of for financing notes offset accounted for due receivable and were nursing and receivable, just that under mostly paydown. three provision a credit Our to losses the discussed additional

record principle estimate from loss a to upon loan amortized a higher loan increased as origination, loan joint incentive unconsolidated As reminder, closed remained properties, This to related unchanged property reserve $XXX,XXX maintenance balance. X% to down. paid mainly compensation the reserve we to higher costs in for G&A increases expenses equal due is of year-over-year. year-over-year pressures. due the overall is Income by cost inflationary and ventures

we $XXX,XXX loss of on nursing During the center a closed Texas. sale skilled third in a quarter, recognized

have master lease we XXXX. scheduled Additionally, mature assisted that covering two living to during a communities is

credit for available Kentucky in provision revenue of third loss quarter real an described, as of for rental $X.X communities this are was the the million, expense. gain quarter as Fully a to XXXX. community negotiating recording located $X.X presently FFO costs. lease per in $X.XX and principally September XXXX. in in its been price, other lower the higher third sale increased NAREIT transaction partially to by I diluted classified This held the two anticipated previously of income shareholders common sale for community, estate, losses a One selling we versus loan in which and the million, higher wrote of interest impairment increases origination, from in just and increase charge a the decrease and Ohio. is expense, on G&A was has is We offset new XX, down discussed resulting of Net for XXXX share located impairment $X.XX the

increase year-ago originations the was $X.XX was current $X.XX share expenses quarter nonrecurring in and FFO, per Excluding items, excluding offset third and the in nonrecurring items, partially The with loan in to FFO interest G&A. the year by revenue, higher in rental compared period. increase due

our to in third centers into activity. joint skilled Florida. contributed $XX.X We three newly PruittHealth with quarter purchase for the investment venture a next million formed nursing Moving of

As assets investment provide sheet. about receivable Clint on balance be additional purchase previously as will details our stated, to shortly. GAAP this requires the presented financing a

the We Regarding $XXX,XXX the our our line rent of senior market-based X fourth leases third we in this lifestyle in separate the former quarter, received expectations. under portfolio X year. $XX,XXX buildings quarterly quarter receiving for resets, with in with anticipate

these sell set either assets operators’ on negotiated budgeting, currently rent or to our in plan we XXXX, into process. which Going based is

rent senior Regarding quarter. our quarter, HMG, which in leased the $XXX,XXX for of portfolio is received care million of the to down $X.X now we from third million prior projections the former $X

projection quarter year. we million our receiving the for However, anticipate unchanged remain fourth $X this in year the full of as

HMG. also notes $XX.X a we our working quarter senior the has principal The in third We rate balance average capital of at $XXX,XXX paid payments a million. $XX.X the provided to of under of unsecured million on principal million We loan loan weighted $XX regular X.XX%. current outstanding XXXX scheduled in funded

million paid $XX at under also weighted Wendy line a $XX.X and revolving X.XX% common of dividends, our as rate borrowed in We million of average mentioned. unsecured credit

on with and million approximately total also have This $XXX Presently, and million available stock $XXX.X the our outstanding, line credit, used of $XXX ATM available cash in liquidity million. proceeds total our We sold our program of proceeds for under $XXX corporate provides net shares with us million common of hand, we XXX,XXX million million ATM. purposes. on a for $X.X of under general of $X.X

the We quarter, of debt to of and of of EBITDA charge times years. credit X.X debt our third for annualized times to significant over value a the maturities annualized XX%. with the solid remained and next estate ratio have long-term metrics coverage the X.X end no five real XXXX debt At adjusted fixed adjusted enterprise

to metric metric EBITDA our annualized X to towards this adjusted debt than real times. target, work our we for Although to long-term estate below remains continue reducing higher

third During different quarter, rent our $XXX,XXX XXXX the from single received XX to in of operator, deferred not in rent $XXX,XXX a top deferrals a we provided and repayments operator.

Anthem we towards through date, in to whom monthly $XXX,XXX have remains to rent the the for additional agreed-upon of the assistance. do was $XX.X rent reduced of repayments October Anthem in million end agreed from same month paid million also September not we $XXX,XXX the rent agreed-upon reduction. provided We million, operator XXXX. through XXXX which and rent of This These for our abatements been $X.X amounts of The of received whom represents $X.X temporarily XXXX we October for $XXX,XXX an include rent. temporary XXXX. rent upon giving the September May In

by receipt expect additional we for to from of $XXX,XXX retention million results. the of Anthem to credit October, and rent operator mentioned. previously rent of year-end tax to up to of continue each provide provided abated XXXX improving from the employee money In upon and November total $XX.X agreed December abatements the same and operating We receiving $XXX,XXX

turn Now, over Clint. I’ll to mic the

Clint Malin

PruittHealth, to today a new our Pam. LTC. with you, of Thank I’ll discussion with transaction start operator an

being they between $XX renewal million X-year three for and makes two centers primarily the joint options now the XX-year licensed under majority the to offered affiliate were Florida purchase in venture skilled in XXX combine private release an with XXXX, are contribution XXXX owner. of They mass PruittHealth. a of constructed LTC centers rooms. beds, Northern three nursing with Our The

of in the between discussed, annually lease time, four. is increase years Pam up exercisable master X% The initial market by X. is yield the provides and Pruitt basket year price the lease with that After IRR The exercise hurdle. is change based will purchase As to a to X an subject annually rent option, to by X% increasing X% Medicare X.XX%, on the rate. which

quarter, ALG, and the whether current expect Senior, or we portfolio net We year. transferred this approximately to we portfolio. of Working the retain are we private million quarter part pay to that of all year Last of a next determining of with communities $XXX,XXX an will discussed we the LTC or all receive the currently approximately XXX-unit ALG revenue during $X.X fourth of sell partner. affiliate a XX-property

update progress process. We as you on we will our through the move

labor have operator, cottages as services it also we decided both not to underlying pay at living For challenges surge community the campus and to providing of hit hard again the struggled been was many XXX-unit abatements, especially one This shortages. care. pandemic during with COVID, rent significantly sell ensuing private independent the ranging from and memory offering faced with the we onset has the

creation retaining and options value campus been seeing have the forward occupancy gains and have time. this gains, the occupancy positive However, provides throughout maintaining evaluating After best path months. relationship multiple we decided at realized the our summer

discussed not have of negotiated projected XXXX have during But communities This to quarter, rent of finalization operator’s lease-up XXXX. rent end for we portfolio upon for in not a top nor XXXX. establish their is year, rental to us. that we COVID, budget been assistance operates living assisted any who the our protracted a the the receiving Last in We operator, requested toward will due providing XX. eight assistance income this of lessee we

employee of from full rent XXXX, And credit. upon $XXX,XXX. for operator’s have October previously tax repayment to $XXX,XXX funds We of of we of rent deferred approximately expect received the receive we the the receipt retention in

XX% lifestyle update the occupancy was XX, portfolio, at former XX% with June Occupancy XXXX, an March includes which communities. XX senior on compared September provide XX at at I’ll XX. and XX% Next,

XX% March leases compared XXXX, XX% For quarterly September communities was under the six two at with XX. June XX% occupancy XX, separate at with rent XX market-based at resets, and

the month XXXX and of compared the of and XX% leased concurrently June with to extended month We working January our lease XXXX was for date. loan XX-property for extended occupancy the the March. portfolio to same the For HMG, capital September XX% to

is Moving next indicator disclaimer by that at currently time, a to we our given usual portfolio environment challenging coverage the believe the the created numbers, pandemic. with good future performance don’t this of

the portfolio. transitioned as HMG, clarity, management XX-property QX portfolio former For times, properties, pay trailing from XX-property leased EBITDARM the the X.XX lifestyle XX-month no our including portfolio private recently already EBITDAR our reported to qualify senior X% living times for same-store longer and discussed, so portfolio using was for excluded are a numbers. and X.XX coverage, respectively, they these fee, and assisted metrics,

coverage Excluding stimulus X.XX funds and was respectively. received times times, by our operators, X.X

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

Excluding stimulus and times coverage was times, by our X.XX X.X received funds respectively. operators,

trends, same-store XX, some portfolio. and share September are I’ll of recent our XXXX, as Now occupancy are for which

beds. skilled same-store I’ve pay XX% XX% expedited Private at XX us XX our includes the at XXst. As XX% operators in March September our gave the to information are noted this voluntary XX% with providing was XX% nursing at total June of past, of data same-store approximately we a and basis, units on compared private and our so pay approximately occupancy

our with For and September in occupancy was XX% average in March. monthly of XX% compared skilled June this XX% in portfolio, year

our As pay occupancy XX%. XXXX average point of approximately a occupancy XX% and was skilled reference, private nursing in our was

our Before moment I’d divestitures. a on pipeline, potential like spend discussing to

to our XXXX, to to $XX longer at see repeat to XX-year To not had assets capital are strong details we a age portfolio selling that of long of Wendy we the million our $XX into average redeploy XXXX million investment provide discussed, in transactions. on by of for what similar closing assets earlier, as no reduce than can prepared strengthening our to date We’ve that expect time, granular was in this the recycling. portfolio we while more underperforming, average term. year it While are capital strategic core or said are to levels million more in $XXX

has and our strong continued As bank attractive rising solutions operators. LTC’s more I’ve rates to making flexible rates and even regional interest with mentioned rates, the between spread creative to contract, previously,

deals continue identify construction to there we numerous out to we accretive deals otherwise nurture opportunities, We there, so and financing. As have identify in had. we may working are provide access financing to that allow investments off-market new that we’ll strategic including we’re relationships to that us maintain areas, believe bridge and build and not and

watching sale our closely we are for stakeholders. work pricing put moderation, allow we Additionally, capital us we transactions, leaseback to price believe and see for some which could will to additional

remarks. to Now, Wendy back closing for I’ll things turn

Wendy Simpson

and pleased very Pam I’m accomplishments than stellar conditions. you with under economic Thank national our Clint. less

that sheet. capital portfolio that ability solutions way with to strong to financing ready a our meet balance where questions. and have operators Operator, and our in a has to strengthened now put maintained we’re We stakeholders, they their benefits the regional needs. of strong all work take best LTC suit are, flexible

Operator

the Thank Barclays. with Please first you. Instructions] Our [Operator from Valiquette line go question comes ahead. of Steven

Steven Valiquette

for the Hello, thanks. Great, Thanks questions. everyone. taking

First just terminated the one the operators. facilities lease, you of new operator to the the you’re on assisted where master living XX within existing stable transitioning here,

You quite mentioned versus compared old of be market is the annualized term, the in run same? I’m on the an to rental would annual for do about would aside today finalized the be there know to rate? but run bias lease? directionally, a yet, be higher think you or or lower lower annual not going to prior directionally I higher, same master from the mutually basis agreed rent the master that under just I fair mean, dust income or it’s it’s that But the fair that I upon market rate once guess, settles, the noise new how rent. just you’re short from lease receiving accounting all curious,

Clint Malin

the not we that year last I to answer or Well, receiving were so. for guess, rent question,

were being was what the during been, for that any to build to income take receiving be we have last the Compared not rent not to receiving will positive contractual paid But time going it’s years. compared previously. So, pre-pandemic, that we we back. to much were X.X

Steven Valiquette

of I maybe it’s Yes. before if still kind we Okay. offline all yes, fine, that can unclear, just and talking the follow But and was deferrals on later. everything. abatements that’s up

of the I curious, a mentioned potentially or $XX the ‘XX, ventures to it those that -- on skewed there million you now, was serendipitous follow-up is for AL just right see you versus other towards quick recycling SNF or $XX million there for bias just just depending the is Another opportunities? more that way question had be to portfolio it

Clint Malin

targeting. point, number assets we’ve this At probably of sold more serendipity years. a had We’ve last of the couple

So, point, a it of this at mix two. be would the

Steven Valiquette

Okay. Got it.

Okay. That’s me. it for Thanks.

Clint Malin

Thank you.

Operator

comes Our question Markets. of from the Capital RBC Please with line go ahead. Michael Carroll next

Michael Carroll

wanted Yes. in out, one that to I Thanks. them what that renewal out Obviously, I option of Their have that or progress lease on biggest extend at if wanted the to with the lease? talked is they XXXX to what’s to specific your bucket. touch that Brookdale about lease from was this the XXXX expirations. comes year? end you mean, of further

Clint Malin

Good Mike. morning. Hi

the and up We week, until to and the the XXth ahead they of next have their execute over extend met lease. Brookdale opens and or have window with to summer February -- go

additional that’s $X on fund is last now, So, been commitment, $X commitment they’re funded million on $X process. we them million to them to that a original we $X.X did funded, as working right commitment. $X projects commitment and of the which is actively make top the -- lease evaluation that We to capital that going approve through on about this million with we’re time. fully million And million extended

time at time positive. set whereas extended Right it’s one-year lease be extended one we June. we those end So, now, we did when to before, at do is thing was The frame to XX, it of the the frame we February renew. the that the for view

they renewal Brookdale But not to we four but the are taking the not, or yet portfolio happen. that months actions reposition to if we’re advised to for So choose has be sales obviously, retenanting. going be prepared a didn’t opened. or not us if to have yet able has between additional internally us lease, window should Brookdale renew renew not And to the

Michael Carroll

has started have towards of operations been? that mean, the accelerated has the recovery versus of the that end recover this of how mean, I year? lows? And kind portfolio they to pandemic I

Clint Malin

updates Mike, publicly, say, tend to provided. with would that I that based has properties provides Brookdale I track updates Brookdale our would on No. say along those

Michael Carroll

on master But trying Okay. then, of going those rent the that’s on agreeing related covering I today? the living currently and one two you’re to sell them mean, is paid to tenant to re-lease the Great. that, And XXXX. being those to is rents I assisted communities properties? mature lease know in other. assets paying

Pam Kessler

that, Yes, on current There’s paid it is. Mike. rent being

Michael Carroll

recorded sales the it see also, same million for property. as expected in going the price out Okay. then rent sales that is see a coming is of you price? property And didn’t impairment, was where what on I And then, what $X.X the is [ph] that be right now? the that expected one I negotiation to the what Is Ohio?

Clint Malin

probably be to the Ohio it do leases would we rent and regard back with occupancy. some of the build market other have, the quarterly where In resets line property, in we on

set of So period that likely time be a for Ohio how the building. the would for rent we

Pam Kessler

held balance the sheet. Kentucky the Yes. have sale on We currently property for in

million. $XX see you’ll that at So,

Michael Carroll

Okay. Great.

you the low and for start to when build it that should base it, over then we assume going of up Is Ohio So rents restabilizes. re-lease then kind on time property, fair? as are a the that

Clint Malin

Correct.

Michael Carroll

for that know is your in Okay. in that I specific is XXXX? And think still tenants, highlighted larger you in that then about footnote. those that else also expiring there? what other there’s are those I there I XX% think expirations XX%, is not but footnotes tenants of XX% -- accounted expiring in

Clint Malin

is it is few of I a the and there’s mean, majority other really here one-off but it Brookdale. there, of The Brookdale. majority

Michael Carroll

increased assets? that mean, talk for just good then the operating same assets? means with X former because XXXX. the trading bit why rents finally your -- little assuming know you HMG higher portfolio, SLC HMG that or about just operating and And that you than SLC I’m former reason results job is me, better forecast we is I a are can Okay. I upped expected? are doing pretty a the for

Clint Malin

been coming making these There Obviously, year. Mike, in. was HMG now been in surge. a middle in there about It of few of was was the buildings gone changes have heavy over past have properties a years. a They for has through improvements. -- the lot lift the the

had been did agency be them able on to funding able to to the which a working census. think of as staffing, into occupancy care in, HMG over utilization somewhat to there drive CapEx working contracts in work happened build I huge to be early important up been this So, flat occupancy come change with new We’ve been that hard buildings, on uptick culture managed has buildings, is indicate on was year. the I well. stabilizing the on into in XXXX. They’ve entering

were Texas We’re well. be the at putting to has contracts, of stabilization that XX% then into CapEx now. staffing, hopefully buildings increasing the But that we positions managed think been rates with a continue new for there’s also, as potential And able increase buildings what from HMG care to the occupancy. culture, doing

possibility So that discussed out that’s would been there. be a

Michael Carroll

Thank great. you. Okay,

Clint Malin

Thank you.

Operator

you. Thank

Please next comes of ahead. go Bernstein with Daniel from Our line the question CapitalOne.

Daniel Bernstein

if those Do not contributing Good recycling $XX those FAD? And rent? for of morning. or the or are couple those assets understand FFO million. currently questions assets assets, the receiving going be to that a to I have million, asset to are are you anticipate year, I currently was just on $XX trying next

Clint Malin

does to that and be a with going and does associated will that it, have some rent It’s not. some combination, there’ll be there be

Wendy Simpson

Clint will able into in -- it’s I wants -- to have in dollars dollars now. more what in But we that that are is think we to pipeline invest invest important, with we to those a take Dan, as be consideration think that said, into that LTC keeping

great dollars pay really rent not that we opportunity, So, to different but these our down assets, we’ll temporarily, to an be have reinvest we sell, cheap credit, anymore. assets we is opportunity of XXXX. And from of in not line assets able which in, a then, the better lose may

a or looking some positive So, assets. of sell I think selling it’s we’re that these to

Clint Malin

Dan, talk looking good is a we’re lot at, average selling what portfolio, the assets. about to reducing a because at there looking has Wendy do, this the we older really, point continue too, of age as will of

Daniel Bernstein

Okay. And in early opening bank in financing? do talked lending you your your you I seller mean, comments. about anticipate any in the pullback --

that so, there any there seller anticipation some financing And that, mitigate loss any is income? of could of is of Okay. if

Clint Malin

No.

Daniel Bernstein

Okay. And be on just pipeline trying transactions a broader is understand a mean, it or heading, I is it those specific moved? And transaction can sellers And kind I’m on X%, refinancing? trouble to basis targeted of there of looking there’s and what -- is where pricing the then some maybe like maybe where market, it, or at yields having a broad you just more guess, get on pricing. specific X%? on There’s transaction on heading a basis that distressed may transaction? both I probably right? Is at? is I may within still it broad then ways X%, you micro be you’re look that Has outlook, on to two the basis, guess, sellers some this

Clint Malin

and probably I looking in X% just We’re it. for private still on assets, on looking, asset owned the to still the the Dan, the of would in skilled say X.XX% behind we’re pay. type range, security is probably depending X.X% And probably

So, market the change, not we’re but a tremendous right now. amount valuing of

that closed rates heard lot As recently. haven’t changing we’ve we have seen, transactions a the here and of keep

market. in now that’s something right evolving that’s So, the

Daniel Bernstein

and you’ve in comments guess early your illness. early. geography. or I at or move-outs across third Or mitigating look And anything. your TBD heard flu I increase expenses? any or those respiratory and flu Any And impacts has Have little both on other if still They’re largest that side, question Florida, state the showing on and activity. properties operators from Okay. was evolving. of levels season Texas enhanced high especially been move-ins, had geography flip COVID I then there’s it’s whether on in don’t any flu the it’s early a the when been which largest is you respiratory signals know been it’s states? state of noise occupancy, know I protocols? there some kind

Clint Malin

few season. think but taken But upticks. the seen operators I But early, more broadly a one-off, heard It’s we’ve that the place last the protocols been couple have have it’s across that’s not been do COVID as country. definitely years among have and vaccination an staff the impact has rates influence been on well. high have flu and vaccination overall increasing patients between rates residents and just of and employees been Plus

Daniel Bernstein

Thank have. off. I’ll That’s Okay. hop I All you. right. all

Wendy Simpson

Dan. Thanks

Operator

you. Thank

Our comes next Austin from Please ahead. of with question KeyBanc. Wurschmidt the line go

Austin Wurschmidt

Hey. everybody How’s I’m few hopped guys I year but lease sale out just context rumored curious, bit next on or mean of sale on a I’m Sorry, there XXXX? Brookdale on But how there? Brookdale if that curious think with was touched curious just in little sort thoughts a you could you of I initial given your a you have late. any exposure. just think the out in the what I about minutes the that potential doing expiration

Pam Kessler

it provisions lease they provides we a if lease that change expires control Well, at... for have that of don’t renew

Clint Malin

year. next of End

Pam Kessler

of next End year.

ball a next dump of point. they lease, the after if different, they and purchased at a end it’s that haven’t So renewed year get it’s

dump are them We us waiting for the here to toss sitting not ball.

bring the state. We’re one portfolio. so doing it’s one that planning would The not at operators asset nicely grouped on possibly what portfolio is strategic look we in to in

I grouped cash putting majority the assets. positive if capital are we stated, And assets nicely the been flow. all assets, So believe, they as into them. of of we’ve not are the

with as So for through but get Journal or information it prepared Brookdale. be can us, a disruptive are or Street through the we be we rumors we Wall either might little the can as

Now, not Brookdale is us appropriate. which and what’s calling on, telling going is us

don’t change, to if So, have we to. that we’re we we’re hoping prepared a make have but

Wendy Simpson

experienced very We’re in transitioning assets.

Clint Malin

one that to the And operators the perspective of that is -- thing diversification asset, that from there were occur. a to addition definitely if

Austin Wurschmidt

that respect in meaningful sort of market the know was in this really again, these there, in And this the don’t certainly of I And of event exposure options senior process there’s I that’s you sort rent secondly, if former where of range the just I on of thoughts then, prepare then, of think lot year. outcomes? the helpful. for covered, was but realize reset? taking are what it portfolio, potential enough evaluating uncertainty place. but are a November lifestyle No, to of with the assets something to

Clint Malin

Pam the of as budget looking us the at growth at to I up we’re has coming of that has Well, lot think grown. be will But occupancy come The encouraging a is that expense marketing mentioned, provided occupancy part and dollars. soon.

there’s operators those on some ramped then occupancy going increase as and hopefully, looking So, rate marketing up increases will moderation and XXXX, into NOI margins. that has dollars at

Wendy Simpson

your increases is, increases seen happened rent have happening experienced and we’ve the think that operators The pulled rent as What I they January next. the Yes. than rise first and forward do, and rent rapid the bit But are frame typically December. earlier build been costs the in happening right? has is rents, forward will time is little then operating lagging now. this industry or well. the you’ll in pulled right typically a They’re about in get take and be revenue January the November have So, some through increases expenses. results, that the to coming industry increases forward time pulled to planning

moderate to see this margins that next we seen year expect compression So, because margins of year. we’ve should

Austin Wurschmidt

you on out that talk with you increases being average So, operators, and rental shaking rate do your see for said, when to January? pull where

Wendy Simpson

single digits what high So we hear mostly. is

mid double also… Some markets low can but get digits. primarily, to digits, single high And hearing we’re

Austin Wurschmidt

Thanks Very helpful. for everyone. time, the

Wendy Simpson

being levels rent, labor significant are but of seen cost that’s at you’ve base care also also where looked just through increases increases. not Yes, cost because

Austin Wurschmidt

Thank Understood. sense. Makes you.

Wendy Simpson

Austin. Thanks,

Operator

you. Thank

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

Michael Carroll

Yes. Brookdale. just back to transition to Thanks. I wanted

I that what definition -- what positive. the are after that Is I said some assets color positive those is statement meant? that? provide cash flow rent cash flow after guess, Wendy CapEx that or you is the think can rent, it after guess, I and on or

Clint Malin

the have internally management X% to with these are the management this, been Well, at say I fee that evaluate fee expense allocated associated not buildings would on we we probably full X%. that this. use

I operating say, as I consideration, would take mean, well So, that as covering when they you into expenses are, rent.

Michael Carroll

paid then, backdated pay the what’s that in little able that? level a back government be to that they’re And too? need able that fund guess, to bit can be going get great. October. we the Anthem, in they fourth to do to know rent they go to mean, I quarter? to I confidence Okay, I achieve

Clint Malin

funds the they flows performance. mean, also cash recover ago, as started to and months a their few -- in previously, Anthem government gave mentioned and flowed I have we ebb occupancy the and incentives temporary would helpful. is But be we operating first rent reduction and that

they improving get the is receiving. year they So, can hopefully, there they benefits before of and that. not reliant end the where to are flow upon some cash And are solely back

the to we’re we’re So, to and improvements glad from ERC money get started excited -- starting that see see seeing well. as the credit we’re flow, flow to cash also they we’re actually -- that

So we’re encouraged by both.

Michael Carroll

great. Thanks. Okay,

Clint Malin

Thank you.

Operator

question comes Please Tao the Stifel. Our from ahead. with next Qiu line of go

Tao Qiu

a Texas morning. about question the ask discussion rate side. Hey. Good on wanted to I the you SNF

in a state been I larger timing some talk may be Texas, think Medicaid but later about of has the there the increase year. the in

the of do if health would secondarily, get know increase extension So how of the about And we next At time, end be? first part first significant is, that that the rate will same the public think emergency, don’t we you in that year. another question quarter my the thinking timing.

PHE goes of may the when to quarters between X So, the have Medicaid and new pocket. air rate ends effect, the we in X

your or your SNF it’s do coverage in largest, that second that largest what the curious does to portfolio? the side, market Just given the on

Clint Malin

and the rate the Care base increased out Texas time almost has months one head of now. advocating substantial is ago item for base a Health years rate rate. increase not meeting had amount any pointed base But in increase a state XX a Texas Association the It’s Well, been the that of of for few was with in obviously without huge. in an is this. Texas We we’re

plus look that more at pressure look think increase. staffing puts historically, a standpoint, rate you being the all pressures are at from I -- when experienced that inflationary So, at that a to on that the state

of definitely would lobbying some then helping of be and where for Association and it efforts Trade their of been supporters years we’ve working a with there’s that But without State base this success. increase, is hopefully, XX after will this year, years no be Texas positive place for rate rates. been has the and So, Medicaid Again, taken from significant. a few fund the year of

Tao Qiu

you emergency? air So, I guess, the health between about the and any rate Clint, what Do pocket public foresee the two, increase in in timing?

Clint Malin

money through state at, looking could the the It’s is coming from additional the of but on at dollars for timing be the state the to is the looking continuing state FMAP those well? would say well Texas. pandemic order the hard to So, that’s health as also emergency potentially also as and that

Tao Qiu

Got you. That’s you. Thank helpful.

Clint Malin

you. Thank

Operator

you. Thank

of next the Our go Credit from Please line ahead. comes with Suisse. question Okusanya Tayo

Tayo Okusanya

the morning I Good Yes. there. out for noise. background apologize any of

again, similar a be So, occupancy some moderation a will at for where, pickups of you compression of into discussion that lot in levels operators versus quarter on in pressure or rent lower seems but pre-pandemic. XXXX. margin look had you as coverage, nice It today profitability about margins occupancy, the in

how of operating to overall should least of for your up really help? tenant And health risk temporarily deals margin the about how least businesses going you base? Any at forward against need impaired? thinking -- So, overall additional end that underwriting we seems at backdrop, the if also, be be of these potential

Wendy Simpson

enough start approach, think if occupancy margins what be increasing, reflected they but the see increase I experienced you’re referencing right? seeing margin think than don’t the year, through the this And I to expenses anybody’s Well, -- made as you financial that were kind I the they should know in ball to approach That’s earlier just the or call compression, continue norms, when to the So at in as revenues but if so, they I they’re to they assuming is on in going were that’s increase. decline increase that been operators’ comment good XXXX because our and coverage, and about don’t in pre-pandemic we in rent which certainly math. of the you’re what to don’t crystal that’s should expecting start predict increases rate statements, higher XXXX. increase the roll they’ve

Tayo Okusanya

and a can the staffing a recession, look about one attractive you through at needs-based healthy in security just from the hoping industry challenge, see has definitely talking is state I pretty Florida of economic be then, And going as there, for level, into think thing which industry operators had And with our to but with Florida a I’m XXXX, a and nobody distress from what is they helpful. seen of investment our like with times recent standpoint. business, job a that rate came that Medicaid PruittHealth,

also think pressure wage helps a out standpoint. I that So, from

Wendy Simpson

end We’re not pandemic. calling the the of

If and RSV, to through bans. that So hearing I to flu, think season got what the this we we’ve RSV can older and our affect get we’re once, industry do admissions get COVID now to flu that that’s at going well. people which as all

if those instituted for nursing. fall, surge margins delay or skilled that very recovery. occupancy and living the hoping assisted could those be it margin because decreases were We’re because to a won’t of But again that harmful does increase both not in the continue

Tayo Okusanya

temporary and pandemic. the was the permanent also, talk then of than us about some to give during forward And that’s making a helpful. thing of thing from Could going that there regulatory if kind place That’s update on it was regulation -- a skilling rather in going any perspective, happen? you potentially kind that

Clint Malin

have potentially We would update any don’t that if happen.

a lot to but the not that would I happen, may think hospital operators case. be the I’m sure like the skilled on of side that

side, care So stay So, increase would have probably that before that to something you would that if like effectively don’t managed you But same had your happen. be census, provision care managed on managed you sometime get patient. that right? that accomplished the X-day care through regulatorily, the

Tayo Okusanya

Thank very much. you Great.

Clint Malin

Thank you.

Operator

conference to for time. questions back additional I closing this no Wendy remarks. any to would are Simpson waiting at There the you. Thank pass like

Wendy Simpson

Thank Have a Happy weekend and great you a Halloween. Bye, all today. bye. for us joining

Operator

today’s of conference you enjoy your rest That all call. concludes I hope the day.

lines. your disconnect now may You

LTC Properties (LTC) 29 Oct 222022 Q3 Earnings call transcript