Four months after becoming president of HCP Inc. (NYSE: HCP), Justin Hutchens has decided to leave the major senior housing real estate investment trust (REIT) to become CEO of HC-One, one of the largest care home operators in the United Kingdom.
Hutchens will remain at HCP through June 1, the Irvine, California-based company announced Monday morning.
“Though we are disappointed to lose such a talented and experienced executive, we are fortunate that Justin has helped build a strong operational infrastructure within HCP, backed by a deep pool of talent, that positions us well for future growth,” said Executive Chairman Mike McKee, in a press release. “We look forward to continuing to work with Justin, both through the transition and in his new role at our client HC-One, and we wish him every success.”
Hutchens first joined HCP in 2015 as executive vice president and chief investment officer. HCP now has initiated the process of recruiting a new CIO.
Prior to HCP, Hutchens was CEO of NHI Inc. (NYSE: NHI), a Murfreesboro, Tennessee-based REIT.
He joined HCP following a period of upheaval for the organization, which had seen its share price slide amid ongoing trouble for its primary skilled nursing tenant, HCR ManorCare. Hutchens helped oversee the spin off of the ManorCare assets into a separate REIT, Quality Care Properties (NYSE: QCP).
At the same time that Hutchens ascended to the president role, Tom Herzog became CEO of HCP. The two leaders articulated a three-part strategy for creating “HCP 3.0,” with a focus on portfolio rebalancing, balance sheet metrics, and cash flow and shareholder dividends.
“While the opportunity to become the CEO of HC-One is exceptionally exciting to me, this was nonetheless a difficult decision given my extremely rewarding experience at HCP,” Hutchens stated. “I’ve been fortunate to work with a management team and Board of Directors of exceptionally high caliber, and I believe HCP’s portfolio has been repositioned to achieve great success. I’m proud of my contributions and remain highly confident in HCP’s growth prospects moving forward.”
HC-One employs more than 14,000 staff members and cares for more than 10,000 residents, according to the company’s website. It was launched in 2011 and operates dementia, nursing, residential, and specialist care facilities across the United Kingdom.
Hutchens will take the reins at HC-One from current CEO and Chairman Dr. Chai Patel, who founded the company. Again, Hutchens will be entering a company as it pivots from a turnaround effort.
“Justin’s appointment completes the succession planning at HC-One,” the company stated in a press release. “Aged 42, he is to lead HC-One through the next crucial phase in its journey from turnaround to transformation.”
HC-One formed out of the collapse of Southern Cross, Britain’s then-largest care home provider. The company currently is owned by an investor group that includes Atlanta-based Formation Capital—which in 2007 was one of the private equity firms that acquired U.S. long-term care giant Genesis HealthCare (NYSE: GEN).
HCP also owns some HC-One real estate and debt. The REIT has 36 properties under triple-net lease with HC-One, representing 2,055 beds currently at 1.31x coverage, Vice President of Finance and Investor Relations Andrew Johns told Senior Housing News.
The debt investment totals $345 million at an 8.3% interest rate that currently is pre-payable, according to Johns.
Written by Tim Mullaney