Last week, Senior Housing Properties Trust announced its third quarter earnings showing that net income was $29.1 million, or $0.25 per share, for the quarter ended September 30, 2008, compared to net income of $20.6 million, or $0.25 per share, for the quarter ended September 30, 2007.  The results include the gain on sale of three properties in its portfolio along with an impairment charge on a facility that the company intends to sell in the 4th quarter.  The third quarter included a large number of acquisitions and sale/lease back arrangements adding a significant number of new units to the company’s inventory.

The SNH’s conference call discussed that their independent living and nursing facilities were showing decreases in occupancy rates while the assisted living facilities showed an increase in occupancy.  Management discussed its acquisition pipeline for the 4th quarter and noted that opportunities are slowing as many operators have tried to get their sales pipelines closed before the end of the year.

Dave Hegarty, the President of SNH, shared his thoughts about the current economic environment and its affects on their company.  “What it’s really doing is it’s affecting the confidence level of seniors who are typically private pay and whether they’re willing to make the decision to move into these retirement communities knowing that either they haven’t sold their house or that they’re looking at their investment portfolio and seeing it decreasing in value and wondering if it’s going to keep going that way. So it’s shaken their confidence and that has pretty much, the brunt of that has been felt on the independent living side of things. Like I say assisted living seems to be holding up very well and the skilled nursing, I think to some degree, is probably a flawed business model anybody with private pay resources is not going to skilled nursing if they can avoid it.”

The National Academy of Elder Law Attorneys (NAELA) and SNAPforSeniors® recently announced the launch of the NAELA Senior Housing Locator, an online navigational tool with listings for licensed senior housing communities in the country. This tool will now have access to the NAELA Senior Housing Locator through a link on www.naela.org . The online tool allows users to search a database of more than 60,000 senior housing listings by city, county, ZIP code, street address or facility name. NAELA leaders see it as an important addition to its suite of resources, as members often help seniors during the transition from the home to senior housing.   The partnership is similar to other arrangements that SNAPforSeniors has made with other elder care providers. 

http://www.naela.org/ViewFullArticle.aspx?ArticleID=294

Forbes Magazine and CFO.com both recently ran stories that painted a bleak picture for the outlook of Sunrise Senior Living (SRZ).  Sunrise recently reported a $68.7 million third-quarter loss and that it does not expect to meet certain financial covenants before they come due at the end of 2008.  The company is trying to refinance these facilities but in the current environment that appears to be challenging.  As revenues decline / stay flat, Sunrise’s costs continue to go up leaving the company faces cash flow shortfalls for its operations.  Will Sunrise need to sell some of its properties to generate cash flow or more importantly can anyone buy a property and finance it?  Unless something happens soon, Sunrise could be on the road to a restructure through a bankruptcy filing. 

Empire State Development recently announced that the former elementary school known as Academy Place in the Village of Gowanda will be converted into a mixed-use commercial and residential structure.  With a total of $10.2 million being invested in this restoration project, Academy Place will offer the Gowanda community much-needed affordable senior housing, a day care center for children and adults and space for business, office, education and community activities.

“The importance of projects such as this for our communities cannot be underestimated,” said Dennis M. Mullen, Upstate President, Empire State Development.  “As Gowanda faces an urgent need to retain and create jobs for younger residents, while meeting the needs of its growing senior population, this project allows the community to address the differing needs of both segments of its population.  ESD recognizes that the success of our communities’ futures rest in being able to adjust and reinvent themselves.  This includes determining appropriate, effective and efficient ways to re-use existing infrastructure.”

This renovation project is designed to encourage commercial, residential, retail and industrial development, as well as promote affordable housing choices and opportunities in Gowanda.  ESD awarded this project a Restore New York Community Initiative Round II grant of up to $1.5 million to offset construction costs. This new facility is expected to be complete by December 2009.

Constructed in 1929, Academy Place was considered surplus property by the owner (the Gowanda Central School District) and has been seen as an eyesore and a financial burden in the community.  The Village of Gowanda, in partnership with Healthy Community Alliance, Inc. (HCA), the not-for-profit sponsor and developer of the project, identified the adaptive re-use of Academy Place into a mixed-use structure to meet various residential and commercial needs, which were not currently being addressed in the community. 

The first floor of the newly renovated facility is expected to house a child and adult day care center for up to 76 children and 12 adults, office space for Developmental Disabilities Services and HCA, a congregate meal site for senior citizens and community space for general public use.  The second and third stories will be developed into 32 residential units to be used as affordable housing for the growing local senior citizen population.  Community Place LLC will own the commercial portion of the building and Academy Place Apartments, L.P. will own the residential portion.

http://www.empire.state.ny.us/press/press_display.asp?id=977

Oregon Business News recently printed an emailed letter from Sunwest’s CEO, Jon Harder, to U.S. Senator Gordon Smith’s office that pleaded for assistance.  According to the article, Harder’s lawyer confirmed its authenticity but the tone of the letter paints a shocking picture of the challenges it faces with its lenders and its operations.  If Mr. Harder’s debt service coverage numbers are correct, it would seem that its primary lender is being unreasonable unless there are other items that have not been shared which may be contributing to the hard tactics employed by its lender.  The scariest part to consider is that if Sunwest is have this much difficulty and its numbers are that good, they have nowhere to turn to for refinancing.

http://www.oregonlive.com/business/index.ssf/2008/11/sunwest_managements_senior_hom.html

Members of SEIU 6434, United Long-Term Care Workers’ Union have negotiated new collective bargaining agreements that will make improvements for hundreds of caregivers and the residents in their care at several California nursing homes. In all, seven new contracts covering over 700 workers provide on average wage increases of $1.50/hr over three years, employer contributions to an education and training fund, increased contributions to employee healthcare, and in two homes, contributions to employee family healthcare. Better pay and benefits have shown to result in lower staff turnover, which ensures a more experienced, stable group of caregivers for residents.

The changes being made to improve resident life at nursing homes are possible largely in part from collaborative efforts between the union, senior advocates, religious and community leaders, and nursing home operators to pass the Nursing Home Quality Care Act (AB 1629) which provides additional funding for nursing home facilities. SEIU Local 6434, the United Long-Term Care Workers’ Union, represents over 160,000 long-term care workers (nursing home and homecare workers) in 10 California counties.