TheStreet.com posted a video interview with Granger Cobb, CEO of Emeritus Corp. and he tries to explain why he thinks the senior housing business is ignoring the market’s turmoil. The piece discusses that Emeritus is only down 5% this year, which is better than the broader market. Cobb states that moves by seniors into their facilities are needs based moves and he states that occupancy rates were up in the second quarter.
The debt load of Emeritus is high and the question remains as to whether Emeritus will be able to refinance / roll-over its short term debt or convert that debt into long term financing in today’s credit market. If the market has seen seniors postponing or cutting back on expenses such as medicine and food, can we suggest that people are holding back moving into assisted living as a means to cut expenses or are they just waiting for their homes to sell?