With the sale of 23 non-core properties to date in 2022, Invesque has continued executing on its strategy to simplify its portfolio and move to predominantly private-pay senior housing.
Chairman and CEO Scott White said Wednesday during a third-quarter earnings call that he was pleased with the sales transactions completed over the past 18 months and continues to be excited about where the publicly traded healthcare investment company is headed.
“Our efforts are now focused on our private-pay seniors housing portfolio,” White said. “We continue to see occupancy and overall financial improvements across our Commonwealth [Senior Living] and other senior housing portfolios, and we expect that to continue in the fourth quarter and into 2023.”
In the third quarter, Invesque sold 13 properties totaling $108 million. Last quarter, the company announced the sale of the majority of its medical office portfolio. The company further reduced its medical office footprint over the past 30 days, including an agreement to sell its Brantford Medical Center in Ontario and a potential sale of its three remaining medical office buildings in the United States, which are likely to close in the first half of 2023.
To date, the company has sold 23 properties for $218 million, moves White called strategic in helping the company “move the needle” toward becoming focused predominantly seniors housing. Seventy-four percent of the company’s properties now are senior housing communities, he added.
Commonwealth portfolio continues positive momentum
The 28-property portfolio managed by Commonwealth Senior Living continued to see positive occupancy momentum in the quarter, White said, hitting pre-pandemic occupancy levels in July and achieving 80% occupancy for the first time in more than two and a half years as of Sept. 30.
The portfolio saw a 670-basis-point increase in occupancy during the first nine months of the year. Invesque’s overall senior housing operating portfolio saw 600 basis points in occupancy growth during the same period.
As of June 30, 12-month occupancy was 78% for Invesque’s triple-net lease properties and 75% for its total seniors housing operating portfolio. Director and Chief Investment Officer Adlai Chester said he expects occupancy to improve further in the fourth quarter.
Communities in the seniors housing operating portfolio raised resident rents 5% to 10% earlier this year, and Chester said he expects many of the company’s provider partners to implement rate increases of between 4% and 5% in the coming year to help offset increases in operating expenses.
“I remain optimistic about the continued occupancy and rate growth across our [seniors housing operating] portfolio, and am hopeful the significant labor challenges our industry has experienced over the last 18 months will begin to lessen in 2023,” White said.
