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In light of the COVID-19 outbreak-led market mayhem, National Health Investors, Inc. (NHI - Free Report) , commonly known as NHI, issued a business update related to monthly contractual rent collections and average occupancy from its three largest senior housing operators, Bickford (contributes 17% of annualized cash revenues), Senior Living Communities or SLC (16%) and Holiday (11%). The three partners represent around 56% of the company’s senior housing units
Particularly, its rent collections have been strong, with May rent collections coming in at 100%. Moreover, the company has collected 99.4% of rent in June to date. Previously, it announced April rent collections of 99.7%.
Notably, NHI’s senior housing business has been adversely impacted by the COVID-19 pandemic. The company is witnessing incidences of COVID-19 outbreaks, reduced in-person tours and declines in move-ins in light of the COVID-19 outbreak-related protocols and sheltering-in-place mandates. This along with escalated move-outs has been impacting occupancy rates at its senior housing portfolio.
In fact, the company reported negative occupancy trends from its three partners from March to May. Specifically, on a combined basis, the three partners witnessed average occupancy decline of 150 basis points (bps) from March to April.
Individually, Bickford same-store portfolio, consisting of 41 properties, reported occupancy of 86.6% in March, declining 130 bps and 240 bps to 85.3% and 84.2% in April and May, respectively.
SLC, which operates nine properties for NHI, had occupancy of 80.6% in March but dropped to 79% in April and May. Delays in multiple entrance fee sales have likely resulted in the decline in occupancy.
Lastly, Holiday, operating 26 properties for the company, also witnessed a continued decline in monthly occupancy. Occupancy as of the March end was 86.7%, falling to 85% and 83.2% in April and May, respectively.
Although strong rent collections from senior housing operators are expected to contribute to revenue growth, discouraging occupancy trends in its senior housing portfolio will likely impact second-quarter earnings.
Apart from the coronavirus outbreak-led occupancy woes, the senior housing market has been reeling with high-supply conditions in certain markets and rising labor costs. This is concerning for NHI because elevated supply usually curtails landlords’ pricing power and limits growth in occupancy level.
Moreover, shares of this Zacks Rank #3 (Hold) company have lost 19.6% over the past year, wider than the industry’s decline of 6.3%.
Stocks to Consider
Alexander Baldwin Holdings, Inc.’s (ALEX - Free Report) Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has been unchanged at 83 cents over the past month. The company currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
City Office REIT, Inc.’s (CIO - Free Report) FFO per share estimate for the ongoing year has been unchanged at $1.11 over the past 30 days. The company currently sports a Zacks Rank of 1.
Gladstone Land Corporation’s (LAND - Free Report) FFO per share estimate for 2020 has been unchanged at 68 cents over the past month. It currently carries a Zacks Rank of 2 (Buy).
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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NHI's Rent Receipts Strong, Senior Housing Occupancy Falls
In light of the COVID-19 outbreak-led market mayhem, National Health Investors, Inc. (NHI - Free Report) , commonly known as NHI, issued a business update related to monthly contractual rent collections and average occupancy from its three largest senior housing operators, Bickford (contributes 17% of annualized cash revenues), Senior Living Communities or SLC (16%) and Holiday (11%). The three partners represent around 56% of the company’s senior housing units
Particularly, its rent collections have been strong, with May rent collections coming in at 100%. Moreover, the company has collected 99.4% of rent in June to date. Previously, it announced April rent collections of 99.7%.
Notably, NHI’s senior housing business has been adversely impacted by the COVID-19 pandemic. The company is witnessing incidences of COVID-19 outbreaks, reduced in-person tours and declines in move-ins in light of the COVID-19 outbreak-related protocols and sheltering-in-place mandates. This along with escalated move-outs has been impacting occupancy rates at its senior housing portfolio.
In fact, the company reported negative occupancy trends from its three partners from March to May. Specifically, on a combined basis, the three partners witnessed average occupancy decline of 150 basis points (bps) from March to April.
Individually, Bickford same-store portfolio, consisting of 41 properties, reported occupancy of 86.6% in March, declining 130 bps and 240 bps to 85.3% and 84.2% in April and May, respectively.
SLC, which operates nine properties for NHI, had occupancy of 80.6% in March but dropped to 79% in April and May. Delays in multiple entrance fee sales have likely resulted in the decline in occupancy.
Lastly, Holiday, operating 26 properties for the company, also witnessed a continued decline in monthly occupancy. Occupancy as of the March end was 86.7%, falling to 85% and 83.2% in April and May, respectively.
Although strong rent collections from senior housing operators are expected to contribute to revenue growth, discouraging occupancy trends in its senior housing portfolio will likely impact second-quarter earnings.
Apart from the coronavirus outbreak-led occupancy woes, the senior housing market has been reeling with high-supply conditions in certain markets and rising labor costs. This is concerning for NHI because elevated supply usually curtails landlords’ pricing power and limits growth in occupancy level.
Moreover, shares of this Zacks Rank #3 (Hold) company have lost 19.6% over the past year, wider than the industry’s decline of 6.3%.
Stocks to Consider
Alexander Baldwin Holdings, Inc.’s (ALEX - Free Report) Zacks Consensus Estimate for 2020 funds from operations (FFO) per share has been unchanged at 83 cents over the past month. The company currently flaunts a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
City Office REIT, Inc.’s (CIO - Free Report) FFO per share estimate for the ongoing year has been unchanged at $1.11 over the past 30 days. The company currently sports a Zacks Rank of 1.
Gladstone Land Corporation’s (LAND - Free Report) FFO per share estimate for 2020 has been unchanged at 68 cents over the past month. It currently carries a Zacks Rank of 2 (Buy).
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>