Stamford, Connecticut-based Land & Buildings Investment Management LLC seems to have changed its tune with respect to Brookdale Senior Living’s (NYSE: BKD) turnaround potential.
Specifically, Land & Buildings is optimistic about recent leadership changes that have taken place at Brookdale, though the activist investor still believes the nation’s largest senior housing provider should consider selling its owned assets.
In a letter to Brookdale’s board of directors and shareholders on Friday, Land & Buildings founder and Chief Investment Officer Jonathan Litt praised the promotion of Lucinda Baier to president and CEO, noting the move “brought a breath of fresh air to the company.”
Additionally, the activist investor is “hopeful [Brookdale] is on the right track, and believe[s] Ms. Baier’s leadership and no-nonsense approach will prevail, despite the significant challenges of turning a company around after years of underperformance.”
Still, Baier still has “much to prove to the investment community to gain trust and credibility,” the letter adds.
Currently, it makes sense for Brookdale to consider broad real estate monetizations now that the HCP Inc. (NYSE: HCP) and Ventas, Inc. (NYSE: VTR) lease consent issues are resolved, according to Land & Buildings. Additionally, Brookdale’s real estate portfolio is probably valued in the mid-teens dollars per share at undemanding valuations, the investor predicts.
Friday’s letter is the latest in a long string of interactions between Land & Buildings and Brookdale.
In December 2016, Land & Buildings advised Brookdale to monetize its assets through a sale of its owned real estate. At the time, Land & Buildings claimed shares of Brookdale stock were worth a minimum of $25, though the share price was just $12.72.
Then, in January 2017, Litt wrote in an open letter that he was “encouraged” by rumors that Brookdale was in discussions to be acquired by private equity giant Blackstone Group.
Later, in July 2017, Brookdale said that it had reached an agreement with Land & Buildings to appoint Marcus E. Bromley as an independent member of its board of directors.
As of market close on Friday, Brookdale’s share price had risen 2 cents to $7.64.
Written by Mary Kate Nelson
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