Sunrise Jumps Out of the Red in Q1, Occupancy Levels Linger

Sunrise Senior Living, Inc. (NYSE:SRZ) reported net income Wednesday of $2 million for the first quarter ended March 31, 2012, a marked improvement over last year’s net loss of $17.7 million, helped by positive income from operations.

The senior living community owner and operator brought in total operating revenues of $335.7 million, up from $320.3 million in 2011. Operating expenses rose slightly to $334 million. However, unlike the first quarter of 2011, when Sunrise posted a loss from operations of $7.8 million, the company brought in $1.6 million from operations.

Diluted net income per common share also improved to $0.03, from a loss of $0.32.


“We are very pleased by our strong quarter and by the progress we are making to keep Sunrise at the forefront of caring for seniors, for years to come,” said Sunrise CEO Mark Ordan in a company press release.

The company reported its average unit occupancy for stabilized properties was flat at 88.2% in the first quarter of 2012 compared to the previous quarter and up 60 basis points from the previous year; in line with the industry average, according to NIC data.

Average daily revenue per occupied unit for stabilized properties rose 2.9% to $220.86 in the quarter. NOI for stabilized properties increased 8% to $147 million; NOI including lease up properties increased 10.1%.


Among asset purchases and transfers, Sunrise noted the purchase and sale agreement in Santa Monica AL, LLC. Under the agreement, the company had a venture partner who owned 85% of the membership interests in Santa Monica AL, LLC. Sunrise owned the remaining 15% membership interest. According to the purchase and sale agreement, Sunrise purchased the partner interest for an aggregate $16.2 million. Santa Monica indirectly owns one senior living facility located in Santa Monica, California.

Sunrise also noted a deal announced May 1 under which subsidiaries of ventures between an institutional investor and Sunrise sold 16 communities to Ventas Inc. for a purchase price of $362 million. Sunrise received $28 million of cash at closing and  will remain the manager of the 16 communities under the pre-existing terms relating to management fees and contract length—which range from 18 to 27 years.

Written by Alyssa Gerace

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