Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: What are your preliminary thoughts on PACS and NHIS coverage post the prestige transition? A: Kevin Pascoe, Executive Vice President, Chief Investment Officer, stated that PACS is a smaller customer, representing less than 3% of revenue, with coverage over 2 times on an EBITDARM level. The properties recently transitioned, so full financials are not yet available, but no major revenue changes are expected. The situation is being monitored closely.
Q: Can you comment on the expected yields and the mix between fee simple and SHOP related in your pipeline? A: Kevin Pascoe explained that the pipeline includes a mix of debt, triple net lease, and SHOP investments. Expected yields are generally 8% or more, depending on risk and product type. As more SHOP investments are made, yields may compress slightly, but they remain confident in their current investments.
Q: Regarding the Spring Arbor portfolio, can you comment on the assets' RevPAR and the portfolio's breakeven occupancy? A: Kevin Pascoe noted that the Spring Arbor portfolio has strong RevPAR for its local markets, with breakeven occupancy typically in the 80% to 85% range. The properties are trending ahead of that, with room for growth, which is why an earn-out was offered for potential value creation.
Q: How do you view the potential impact of the recent election on your business, particularly regarding changes to the ACA? A: D. Eric Mendelsohn, President and CEO, expressed cautious optimism, noting that the previous administration had a favorable regulatory climate for the industry. He anticipates similar conditions under the new administration, which could be beneficial.
Q: With Andy Adams retiring, will there be an opening for another board member, and what's the update on the search for an independent board member? A: Eric Mendelsohn stated that the search for a new independent board member is ongoing, with a small group of finalists. The new member will be presented for the next proxy season. Whether Andy's seat will be replaced is still under discussion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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