The Ensign Group and Healthpeak Properties detailed third-quarter earnings results on Friday calls with investors and analysts.
The Ensign Group
Ensign Group CEO Barry Port said the San Juan Capistrano, CA-based company once again saw a record quarter.
“We’re particularly impressed with these results given that we’ve added 53 new operations across several markets in our recently acquired bucket,” Port said. “Our model leans heavily on local clusters and existing operations to support our newly acquired operations, and yet these local clusters have shown their strength by simultaneously integrating the new operations into their clusters while achieving outstanding results in existing operations.”
Most of the transactions occurred in Colorado and the Midwest. According to President and Chief Operations Officer Spencer Burton, the newly acquired properties now account for more than 14.4% of Ensign’s total service revenue.
According to an Ensign press release, company’s recent acquisitions include the following leased operations:
- Prairie Ridge Health and Rehabilitation, a 102-bed skilled nursing facility in Overland Park, KS;
- City Park Healthcare and Rehabilitation Center, a 125-bed SNF in Denver;
- Desert Willow Health and Rehabilitation Center, a 106-bed SNF in Pueblo, CO;
- Junction Creek Health and Rehabilitation Center, a 133-bed SNF in Durango, CO;
- Pelican Pointe Health and Rehabilitation Center, a 104-bed SNF in Windsor, CO;
- Riverbend Health and Rehabilitation Center, a 100-bed SNF in Loveland, CO;
- Broadview Health and Rehabilitation Center, a 100-bed SNF located in Greeley, CO;
- Westlake Lodge Health and Rehabilitation Center, a 107-bed SNF in Greeley, CO; and
- Linden Place Health and Rehabilitation Center, a 110-bed SNF in Longmont, CO.
Standard Bearer also announced the following real estate acquisitions, all of which are operated by an Ensign affiliate effective as of the acquisition date:
- Holly Heights Care and Rehabilitation, a 133-bed SNF in Denver;
- Greater Southside Health and Rehabilitation, a 76-bed SNF in Des Moines, IA; and
- St. Joseph Rehabilitation and Care Center and Skyview Villa Assisted Living, a campus with 83 skilled nursing beds and 20 assisted living units in Norfolk, NE.
The third-quarter acquisitions “were all carefully selected amongst the many opportunities available to us and were chosen because of the huge clinical and financial potential,” said Chad Keetch, Ensign’s chief investment officer and executive vice president.
Ensign’s growing portfolio now consists of 323 healthcare operations, 30 of which also include senior living operations, across 14 states.
Company executives said they actively are looking for performing and underperforming operations in several states.
“We continue to see a very healthy pipeline of new acquisition opportunities and are making progress on several additions that we expect to close in the fourth quarter and into next year. We remain committed, especially in times when there are lots of opportunities in front of us, to remain disciplined and grow in a healthy way,” Keetch said.
Executive Vice President and Chief Financial Officer Suzanne Snapper noted that the company’s liquidity remains strong, with approximately $532.1 million of cash on hand and $572.1 million of available capacity under its line-of-credit.
“[This] gives us over $1 billion in dry powder for future investments,” Snapper said.
“We also own 122 assets, out of which 117 are held by Standard Bearer and 98 of which are owned completely debt-free and are gaining significant value over time, adding even more liquidity to help with our future growth,” she said.
During the quarter, same-store occupancies increased to 81.7%, which is 2.8% more than in the same quarter in 2023, “establishing a new high water mark for same store occupancy,” Porter said.
“This is especially noteworthy during a quarter where we historically have experienced seasonally softer occupancies,” he said.
Snapper noted that the company is “increasing and nearing” its 2024 earnings guidance to between $5.46 to $5.52 per diluted share.
“We are also raising our annual revenue guidance to between $4.25 billion to $4.26 billion. We have evaluated multiple scenarios and based upon the strength in our performance, the positive momentum we have seen in occupancy and skilled mix as well as the continued progress on agency management and other operational initiatives, we feel confident that we can achieve these results,” Snapper said.
Healthpeak Properties
Healthpeak Properties saw same-store net operating income growth of 14.2% in its portfolio of continuing care retirement communities in the third quarter, Chief Financial Officer Peter A. Scott said Friday on the real estate investment trust’s first-quarter earnings call.
“Year-to-date, our same-store growth is approximately 20%, which is well ahead of the expectations we set earlier in the year,” Scott said.
He attributed the same-store growth to occupancy and rate growth, “coupled with moderating expense growth.”
The Denver-based real estate investment trust has no intention of selling off its CCRC portfolio anytime soon, President and CEO Scott Brinker said. The segment has experienced steady growth since Healthpeak purchased it 15 years ago, he said.
“We have a really strong portfolio, a great operating partner in LCS and a team that manages it very, very effectively,” Brinker said.
Selling off the portfolio would not be strategic to the company’s overall platform, he said.
“As we’ve said in the past, it’s a great business, but if public investors want access to senior housing, they have other great companies they can turn to,” Brinker said. “So if and when the price made sense, we would look to recycle capital out of it.”
He reiterated, however, that the company is in no hurry to sell.
“The dynamic today is the public market investors are a lot more excited about that segment than the private market. So that’s not a great time to sell,” Brinker said. “If that dynamic ever reversed, we would obviously consider transacting. But for right now, we’re fully focused on growing NOI [net operating income], which we have been.”
Oct. 23, Healthpeak Properties declared a quarterly cash dividend of $0.30 per share.
