Sabra’s Hot for Senior Housing Heading Into Second Half; Q2 Net Income Nearly Triples

Headed into the second half of 2012, Sabra Health Care REIT Inc. (NYSE:SBRA) is planning to turn its attentions to the senior housing market, said its chairman and CEO Rick Matros during REITWeek 2012: NAREIT’s Investor Forum.

Sabra’s portfolio is currently dominated by skilled nursing assets, but it may start looking more diversified in the next few months. The best investments, says Matros, are skilled nursing, assisted living, and memory care, and there’s growing demand for senior housing and medical office buildings. 

The REIT is planning on driving its returns going forward by “executing on the pipeline,” he says, which contains “at least as much senior housing as skilled nursing.”


“We are really focused on branching out more into senior housing,” he affirmed. 

The healthcare sector has always been compelling to Matros, he said, originating from a passion to working with the elderly. Since then, his interests have spread to other aspects of healthcare as well. 

In the REIT’s second quarter earnings report, Matros said that “for the first time, we expect our acquisition activity to demonstrate our commitment to expand Sabra’s portfolio into senior housing.”


Sabra posted a net income of $5.9 million for the second quarter ended June 30, 2012, nearly triple the previous year’s $2.1 million. Net income per diluted share was $0.16, doubled from $0.08 a year ago.

Revenues increased 34% to $25.1 million compared to $18.8 million in the same period last year.

“We had a very productive second quarter as well as an active start to the third quarter considering our acquisition activity, refinancing, and the add on to our senior notes,” said Matros in the earnings report. “Operationally, our tenants had a nice quarter with strong improvement in rent coverage and an improvement in occupancy in our skilled nursing/post-acute portfolio, despite this quarter being soft throughout the industry.”

The REIT purchased four skilled nursing facilities in two separate transactions for a total of $25.7 million during the second quarter. It also originated an $11 million first mortgage wtih an option to purchase the skilled nursing facility securing the loan. 

Funds from operations (FFO) for the second quarter reached $13.5 million or $0.36 per diluted share, compared to $8.4 million, and $0.33 per diluted share, in the second quarter of 2011. 

Looking forward, Sabra expects to achieve its guidance on acquisition volume.

View the earnings report here.

Written by Alyssa Gerace

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