REIT Roundup: Healthpeak, Omega, LTC Release Q1 Results

by Jeff Shaw

HUNT VALLEY, Md., IRVINE, Calif., and WESTLAKE VILLAGE, Calif. — The first results have started to come in for publicly traded companies during first-quarter 2020, with REITs Omega Healthcare Investors (NYSE: OHI), Healthpeak (NYSE: PEAK) and LTC Properties Inc. (NYSE: LTC) leading the way. The COVID-19 pandemic was in its early stages at the end of the quarter, with most quarantines starting properly in mid-March.

Irvine-based Healthpeak posted a profit of 54 cents per share and same-store net operating income grew 2 percent over the previous quarter. The company was very active prior to the pandemic, most notably restructuring its relationship with Brookdale in January in a series of transactions topping $1 billion.

However, the effects of the virus were very visible on occupancy. The company reported a 73 percent reduction in move-ins from April 2019 to April 2020, while move-outs increased 22 percent over the same period. Occupancy fell 300 basis points to 82.2 percent from March to April 2020.

Although the company is offering virtual tours, fewer people are taking them. Tours declined 50 percent in April 2020 compared to April 2019.

The company reported receiving 97 percent of rent payments, but noted Capital Senior Living only paid three quarters of its April rent and Harbor Retirement Associates has requested a rent deferral for its May $1.2 million payment. Healthpeak is “currently evaluating the request.”

The company noted that of its 222 seniors housing properties, 54 had reported cases of COVID-19.

Hunt Valley-based Omega reported a net income of $92.3 million on revenues of $253 million. The company’s profit increased more than $20 million over the same period in 2019.

“While we are pleased to announce strong first quarter results, we recognize that investors are more focused on how our operators are weathering the impact of COVID-19 on their facilities and how this is affecting their capacity to pay our rent,” says Taylor Pickett, CEO of Omega. “As well as dealing with an unprecedented pandemic, which has proved particularly dangerous to their frail and vulnerable residents, they have seen declining occupancy and significantly elevated costs combine to materially impact their financial performance.”

Omega, which focuses on skilled nursing, suspended its dividend reinvestment and stock purchase plan in April to try to keep more cash on hand during the crisis.

Westlake Village-based LTC Properties also reported a profit, making $63.4 million in the first quarter. Like Omega, the company terminated its stock repurchase plan in March. The report did not comment any further on COVID-19.

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