Despite anticipation of consolidation among skilled nursing facilities within the senior housing sector, LTC Properties CEO said this week the company is not expecting widespread consolidation at all.
In an interview with REIT.com, LTC Chairman and CEO Wendy Simpson said consolidation among skilled nursing providers is likely to happen on a regional basis, rather than a greater national basis.
“I’m not sure about the skilled nursing area if you’re talking about consolidation in operators,” she told REIT.com during REIT World 2013 in San Francisco. “I just don’t see a skilled nursing company coming public or getting larger. I am seeing some regional consolidation: large regional operators buying other large regional operators.”
LTC Properties is more likely to target opportunity within private pay assets, however, Simpson said.
“We got into development because we wanted to have more investments in the private-pay assets. We were finding that to purchase an already built and operating asset was very expensive in excess of replacement,” she said. “We started working with operators to build some properties, memory care and skilled nursing in some areas. We have quite a pipeline going for 2014, and some of it will go into 2015.”
The impact of health care reform and the push for greater efficiencies are also having an impact she told the publication.
“The push to the most cost-efficient level of care is still happening,” she said. “What we’re looking for in our building and the properties that we’re buying is the newer property – the property that will be the property of choice in the area. So, we’re looking for the more sophisticated operator in the region – the strongest one with the most associations with the local hospitals and the referral sources. We see health care [reform] will direct care more than in the past.”
Written by Elizabeth Ecker