Brookdale Senior Living (NYSE: BKD), the nation’s largest senior housing provider, recorded a net loss of $126.4 million for the first quarter of 2017—more than double the $48.8 million loss it posted this time last year.
The spike was due largely to $20.7 million of impairment charges, mostly related to the company’s transaction with private equity firm Blackstone Real Estate Advisors (NYSE: BXMT), according to an earnings announcement issued Monday. The transaction included an acquisition of 64 senior housing communities by Blackstone for $1.1 billion. Brookdale is a 15% joint venture partner in the deal.
On a more positive note, the company did see an increase in its year-over-year adjusted free cash flow. It went up by $35.6 million to $63.4 million when compared to the first quarter of 2016. Brookdale also saw an 8.5% growth in its adjusted EBITDA to $198.3 million in the first quarter of 2017, compared to $182.7 million in the first quarter of 2016.
“Our focused efforts on improving operational execution led to meaningful year over year growth in our first quarter adjusted EBITDA and adjusted free cash flow,” Andy Smith, CEO and president of Brookdale, said in a press release. “In spite of a highly competitive environment, we produced reasonable rate growth and strong expense control to achieve same community operating income growth in a seasonally weak occupancy quarter.”
In addition, the Brentwood, Tennessee-based Brookdale shared it is thinking of ways to increase shareholder value. Rumors have been circulating since early 2017 that Brookdale is negotiating to sell the company in whole or in part.
“We remain committed to creating shareholder value. Our previously announced review process remains ongoing,” Smith said in the press release. “At the same time, we are continuing to pursue portfolio optimization opportunities, as evidenced by our recently closed venture with Blackstone. This transaction and potentially others will strengthen our financial position and add further to free cash flow.”
Written by Alana Stramowski