Senior Housing Properties Trust President: Investors Not Giving REIT Enough Recognition

As a senior housing owner, Senior Housing Properties Trust (NYSE: SNH) simply isn’t getting enough positive recognition, according to new President and COO Jennifer Francis.

“SNH is not getting the credit it deserves for our high-quality, well-occupied portfolio, diverse tenant mix in geographic footprint, investment grade-rated balance sheet and our track record of delivering shareholder returns,” Francis said on Thursday during a first-quarter 2018 earnings call with investors and analysts. “I plan to work in the coming months to emphasize the many positive attributes of our portfolio.”

David Hegarty, former president and COO of Senior Housing Properties Trust, stepped down from his post on April 30. He is set to remain an employee of The RMR Group Inc. (Nasdaq: RMR), which manages Senior Housing Properties Trust, until his retirement on September 30.


The Newton, Massachusetts-based real estate investment trust’s (REIT) first-quarter 2018 revenue of $275.8 million beat analysts’ expectations by roughly $2.1 million. Its first-quarter FFO of 45 cents was in line with analysts’ expectations.

The first three months of the year was an especially active time for Senior Housing Properties Trust, Francis said on the call, noting that the company acquired two senior housing properties, two medical office buildings and two life science buildings for an aggregate purchase price of about $155 million.

“This first quarter’s acquisition total surpassed our acquisition volume for all of 2017,” she said.


Additionally, the REIT entered into agreements in January to sell four senior housing communities leased to McLean, Virginia-based Sunrise Senior Living for $368 million. So far, Senior Housing Properties Trust has sold three of the four communities for $272 million, with the final community scheduled to close in the next few weeks.

Still, the quarter was not without some hiccups.

“There has been some drag on the [senior living rent] coverage as a result of senior living industry headwinds,” Francis explained. “We saw our Brookdale [Senior Living] coverage tick down a little bit.”

Brentwood, Tennessee-based Brookdale (NYSE: BKD) is the nation’s largest senior living provider, and is the midst of a turnaround, with a new CEO at the helm. It has recently re-negotiated its leases and engaged in portfolio re-positioning with other REITs, most notably hammering out a new master lease agreement with Chicago-based Ventas Inc. (NYSE: VTR). 

At the same time, SNH’s managed portfolio was negatively impacted by two specific properties—a continuing care retirement community (CCRC) in Laguna Hills, California, and a CCRC in Fort Myers, Florida.

The California CCRC is presently undergoing a multi-million dollar renovation, though the job is not scheduled to be finished for several months. The Florida CCRC was just renovated, but a new independent living and assisted living community opened in October 2017 a couple of blocks away.

“I think there’s no question new competition and new supply has hurt us, but…excluding those two construction projects…we would have been up 3% [in terms of managed portfolio same-store cash NOI], and we are encouraged by the results of our spend,” CFO and Treasurer Rick Siedel said on the call.

As of market close on Thursday, Senior Housing Properties Trust’s share price had risen approximately 1% to $16.38. 

Written by Mary Kate Nelson

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