Buy or sell? Analysts skeptical of ProMedica-Welltower deal
But
And they raised questions about how a regional health-care provider like
The acquisition will make
In discussing the deal with analysts Thursday,
"He tried to spin it as they're not buying skilled nursing properties, they're investing in the company --
"Having said that, they're still buying skilled nursing homes. They might have a 10-year triple net lease or whatever, but in the end, they own the properties," he said. And "they're paying a pretty steep price for an 8 percent [rate of return] for skilled nursing homes."
"From
"If you're going to spend
"I would say that the deal is interesting. And HCR has always been viewed as a high quality operator. But I would say that with the deal, the public markets look pretty hard at skilled nursing deals just because there's been some headwinds in that [sector],"
Skilled nursing home property investment doesn't provide the high returns that it once did due to lower federal reimbursements and shorter stays in nursing homes, he added.
However,
The rents will add
"... For
"If you're in providing health care and can dictate where [patients] go and discharge patients to your skilled nursing facilities, that should give you a leg up," he said.
"Skilled nursing has been starved for capital for some time. ManorCare used to be the gold standard, so hopefully they can get back to that level," he said.
While
"I think after that they won't have an AAA+ rating anymore. They could drop three notches with that amount of debt,"
However,
"They've always been a pretty smart group. They've always made smart moves,"
"I won't upgrade to a buy or sell [recommendation]. There's too much uncertainty," he said. "But there is a lot of opportunity too."
Contact Blade Business Writer
Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Comments that violate these standards, or our privacy statement or visitor's agreement, are subject to being removed and commenters are subject to being banned. To post comments, you must be a registered user on toledoblade.com. To find out more, please visit the FAQ.
___
(c)2018 The Blade (Toledo, Ohio)
Visit The Blade (Toledo, Ohio) at www.toledoblade.com
Distributed by Tribune Content Agency, LLC.
Risk Analysis Journal Issues 14 Research Articles in April 2018 Edition
Willis Towers Watson Bolsters Its Position in Global Life Market With Appointment of Mark Brown
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News