» Cambridge Realty Capital Companies recently arranged $24 million in Housing and Urban Development loans to refinance skilled nursing facilities with a total of 549 beds in three states. The loans will go to Alden Northmoor Rehabilitation and Health Care Center in Illinois and four North American Health Care Inc. properties in California and Utah.
Health Care REIT is buying the remaining 20% equity interest in a Merrill Gardens 38-property portfolio, the two companies announced the final week of June. The additional $173 million investment will give full ownership to the REIT, which has agreed to a triple-net lease with Emeritus Senior Living to manage the properties. A third-quarter closing is anticipated.
The final segment in an ongoing, four-part PBS/Frontline series “Life and Death in Assisted Living,” takes a close look at the acuity levels of residents who live in Emeritus assisted living communities, and questions whether the communities are equipped to provide the level of care needed.
Delving deeper into a recent wrongful death case involving California Emeritus community Emerald Hill, which the investigation spotlights throughout its TV and print series, reporters look at an Emeritus company practice, its take on the “back door.”
“Emeritus was intensely focused both on persuading people to move into its buildings and dissuading them from moving out,” the report states. “They did not want paying customers to, as they put it, go out the back door.”
Quoting from emails and input from employees, the report hones in on the company’s efforts to keep residents within the communities, claiming those efforts were without regard to increasing acuity levels. Emeritus responded to the claims via interviews and its website, stating the policy meant to retain residents to the best of the communities’ abilities.
Emeritus has responded in detail to the report on its website under a new heading “Emeritus Facts.” The site refutes many claims the company says were made throughout the Frontline report, including its description of the company’s “back door” policy.
“False,” Emeritus says in response to the claim Emeritus prevents residents from leaving even if their care needs require a higher level of care.
“‘Close the back door’ is a term used commonly throughout the senior living industry. Emeritus employees may use the term to highlight the importance of providing a high quality of service to residents to ensure that the residents do not choose to move out because they are dissatisfied with customer service or any aspect of their lifestyle or situation at Emeritus,” the site reads. “We do monitor move-outs so that we can identify and correct any issues and enhance resident satisfaction.”
The company refutes close to two dozen points in detail.
The segment points to the Emeritus wrongful death case in particular as an example of a resident with medical needs that grew with time, but who remained in the community for several months before ultimately moving to a nursing home, finding some staff felt they were not equipped to treat the patient’s needs, and quoting from court documents where the community’s director said she was in “over her head.”
“Nancy Cordova, who ran the Emerald Hills facility during Joan’s stay, was asked a pointed question by a member of the jury. Was it fair to say, the juror asked, that Cordova, responsible for 80 or so residents, many of them with dementia, was ‘in over her head’? ‘I think that would be fair to say,’ answered Cordova.”
Emeritus refutes the claim and others.
“Emeritus does not employ any sales methods or directives intended to encourage staff to recruit residents with more acute care needs,” the company says. “As an industry, we’re seeing a trend of people delaying the decision to transition to senior living, possibly due to the struggling economy.”
Written by Elizabeth Ecker
Net income and funds from operation (FFO) dropped for Sabra Health Care REIT, Inc. (NASDAQ:SBRA) in the second quarter ended June 30, 2013 as new senior living construction activity picked up. The REIT currently has an approximately $300 million development pipeline.
FFO dropped 64% to $0.13 in the second quarter compared to $0.36 one year previously. The REIT also reported a net loss attributable to common stockholders per diluted common share of $0.09. In 2012′s second quarter, Sabra had a net income attributable to common stockholders of $0.16.
However, second quarter normalized FFO rose to $15.6 million, or $0.41 per diluted common share, compared to normalized FFO of $13.7 million, or $0.37 per diluted share in the same period of 2012.
Revenues increased to $32.3 million from the previous year’s $25.1 million. Net cash provided by operating activities declined almost 5% to just under $23 million.
Recent activities include the $6.2 million acquisition of a Virginia assisted living community in the second quarter, and a new pipeline agreement with Meridian Realty Advisors. Sabra has previously spoken toward its strategy of building new assets as assisted living acuity rises.
“Although deal activity was light for the quarter, our pipeline showed an increase in activity by the end of the quarter and continues to be healthy at approximately $300.0 million, comprised of approximately 65% senior housing assets and 35% skilled nursing/post-acute assets,” said Rick Matros, CEO and chairman of Sabra, in the earnings statement. “We expect to hit our targeted range of investments for 2013 and we reaffirm our guidance as well, which excludes the impact of future investment activity.”
On July 29, the REIT agreed to terms on a non-binding term sheet on a forward purchase program with Meridian to acquire newly constructed senior housing, memory care, and skilled nursing properties that Meridian will develop. The agreement provides for the acquisition of up to 10 facilities with an estimated total cost of $100 million through 2015, including capital commitments for predevelopment.
The preferred equity investments will earn an annual 15% preferred rate of return.
“We’ve developed a long-standing relationship with the Meridian team having done repeat deals with them, and we look forward to entering into the new forward purchase program with Meridian and continuing our long-term relationship,” said Matros.
While occupancy in Sabra’s skilled nursing and post-acute care portfolio was down 80 basis points year-over-year, its senior housing portfolio occupancy increased by 320 basis points.
“We expect to see rent coverage continue to improve particularly in the Genesis portfolio as a result of the realization of synergies, the unexpected mitigation of sequestration, and improving skilled mix,” Matros said. “We also expect to announce additional development programs, primarily in assisted living and memory care asset classes.”
View Sabra’s second quarter earnings report.
Written by Alyssa Gerace
Kindred Healthcare, Inc. (NYSE: KND) announced Wednesday that it has sold seven nursing centers for approximately $47 million to affiliates of Signature Healthcare, LLC.
The facilities—five of which are owned and the remaining are leased—contain 900 licensed nursing beds and are located outside of Kindred’s 21 designated Integrated Care Markets.
Collectively, the nursing centers generated revenues of approximately $63 million and earnings before interest, income taxes, depreciation and amortization of approximately $7 million for the year ended December 31, 2012—where the facilities had an aggregate rent expense of $2 million.
Kindred had previously announced its intention to sell eight facilities to Signature Healthcare, but it was unable to satisfy all closing conditions for the sale of one facility and elected to remove it from the transaction, according to a company release.
With the proceeds from the transaction, Kindred intends to pay down the outstanding balance under its revolving credit facility, which was an estimated $350 million at March 31, 2013.
“We are pleased to complete this tax-efficient transaction, which further accelerates our repositioning strategy with the goal of improving our long-term growth, profitability and financial position,” said Kindred CEO Paul J. Diaz.
“We will continue to sharpen our focus on our Integrated Care Market strategy that enabled us to better Continue the Care for our patients and provide high-quality clinical outcomes throughout an entire post-acute episode,” he added.
RBC Capital Markets served as the exclusive financial advisor to Kindred on the Signature transaction.
Written by Jason Oliva
New research suggests moderate exercise may be the best method for combatting cognitive decline in those at risk for Alzheimer’s disease, through improving the efficiency of brain activity linked to memory.
Researchers from the University of Maryland School of Public Health conducted a study on 17 participants with mild cognitive impairment—a diagnosis that signals greater risk for Alzheimer’s—and recently published the results in the Journal of Alzheimer’s Disease.
Two groups of physically inactive older adults between the ages of 60-88 began a 12-week exercise program that included regular walking on a treadmill, with guidance from a personal trainer. One group of participants had MCI, while the other group had healthy brain function.
The levels of exercise used for the study are in line with physical activity levels recommended for older adults, consisting of moderate intensity exercise several days a week totaling about 150 minutes.
Not only did both groups improve their cardiovascular fitness but about 10% by the end of the program, they also improved their memory performance and demonstrated enhanced neural efficiency while engaged in memory retrieval takes.
“We found that after 12 weeks of being on a moderate exercise program, study participants improved their neural efficiency—basically they were using fewer neural resources to perform the same memory task,” said Dr. J. Carson Smith, assistant professor at the University of Maryland School of Public Health’s Department of Kinesiology. “No study has shown that a drug can do what we showed is possible with exercise.”
Tests and imaging to measure participants’ brain activation were conducted before and after the exercise program. Brain scans taken after participants completed the intervention showed a decrease in the intensity of brain activation in 11 brain regions while correctly identifying famous names, such as Frank Sinatra or other celebrities they’d be familiar with.
The brain regions that showed improved efficiency were the same areas of the brain that lead to Alzheimer’s diagnoses, including the precuneus region, which involves episodic memory, and the temporal lobe.
“People with MCI are on a very sharp decline in their memory function,” Dr. Smith said, “so being able to improve their recall is a very big step in the right direction.”
Written by Alyssa Gerace
The leader of Florida’s long-term care ombudsman program is under investigation and has been placed on administrative leave under strict conditions, according to local reports. Harold J. Crochet has run Florida’s LTC ombudsman program since 2011. Last Friday, he was placed on paid leave by Elder Affairs Secretary Charles T. Corley, according to a memorandum obtained by the Miami Herald.
A new House bill aims to improve the nursing home survey process, enhance whistleblower protections for surveyors and establish an advisory committee for CMS that would include skilled nursing facility administrators, directors of nursing and other stakeholders. Rep. Lucille Roybal-Allard (D-CA) introduced the bill on Tuesday.