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LTC Properties Inc. Message Board

  • hsm52b hsm52b Sep 29, 2000 1:40 PM Flag

    LTC common is a steal, buy and hold!

    Smart move sell some assets and pay off some debt. Any type of real estate is selling for a premium in todays market! This will make LTC financially stronger.

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    • Yes, it could be sooner. Without really good
      supply/demand data it's impossible to predict the "when". Even
      when there is pretty good data imbalances still seem
      to catch everyone by surprise (e.g. oil). I try to
      be conservative in my expectations -- if it happens
      sooner, I'm pleasantly surprised.

      I'm playing
      another supply/demand game -- KMAG, the leading
      independent supplier of hard disk media. That's the actual
      metal platters that go inside a hard disk. For various
      reasons the average number of platters inside a drive has
      dropped from 3-4 a couple of years ago to less than 2
      today. The number of drives has increased, but not
      enough to absorb the excess capacity (in an example of
      atrocious timing the disk media vendors went on a huge
      building spree in 1996-98). The result has been horrendous
      bloodshed. Quite a few bankruptcies. Not Chap 11 re-orgs,
      either, but total liquidations. Life for the survivors is
      no picnic. Prices drop weekly, profitability is
      impossible, having the best product means you might achieve
      cash flow breakeven.

      No new capacity has come
      online for years, nor will it. At some point there will
      be a shortage and prices will spike. Unfortunately
      KMAG is the only public company in this sector and
      they're staggering under a huge debt load. So I only play
      it with spare change.

    • I think that you may be right about a future
      crisis in this sector and it might even come much sooner
      than you expect.

      About March of 1999, oil was
      $10 and natural gas was $1.00. For short periods the
      prices dropped below those figures. On inflation
      adjusted prices, both were at all time lows. Seeing that
      both cars and houses were getting bigger, I figured
      such low prices couldn't last.

      I especially
      liked natural gas because of electrical generation and
      fuel cells. I figured prices would get back to $2.00
      to $2.50 within a year. Well right now the price is
      above $5. Unbelievable!

      I guess oil and gas
      wells are depleted faster than nursing homes get torn
      down, but still things can turn around quickly

      You are right about one thing, won't be
      too many built over the next couple of years.

    • By the time we get ready to enter one of these (SNFs)there will be a crisis.

      They will probably hang us up by hooks on the wall.

    • "Any type of real estate is selling for a premium
      in today's market"?????

      If you are a
      commercial real estate broker stick to what you know. My god
      man MT is in the middle of a bloodbath selling off
      its healthcare ppties. At the present time these
      ppties are selling for 20-25% discounts to ORIGINAL

      As for four years to workout LTC??? If LTC must
      fully amortize this credit facility AND if proceeds
      from ppty sales must go to further reductions of debt
      then you stand still at best and as mt_suit says you
      contract at worst.

      In other words, LTC goes into a
      partial liquidation mode.

    • <<Any type of real estate is selling for a
      premium in todays market!>>

      Nursing home
      assets are selling at 20% below book in "todays market".
      You must be the world's most clueless commercial

      • 2 Replies to doggydogworld
      • hsm said: "Any type of real estate is selling for
        a premium in todays market!"

        Where do you
        live? Silicon Valley?

        doggy said: "Nursing home
        assets are selling at 20% below book in "todays

        In general I would agree and add movie theaters to
        the list of general property groups that are down.

        However, I think there might be quite a few nursing home
        properties that could be sold at a profit above book.
        Perhaps those in the forementioned Silicon Valley and
        perhaps a select few other markets where land value alone
        has sky rocketed, older properties that have been
        heavily depreciated, and here where I live. Here in south
        Alabama and probably south Georgia even more so, the
        nursing home industry is quite strong due to Florida

        That said, I was rather puzzled by the
        press release mentioning possible capital gains from
        property disposition. I wouldn't say it was impossible,
        but I will be surprised if LTC can obtain a net gain
        on property disposals.

        Does LTC have many
        properties in northern CA or near the Florida state line?

      • Exactly - Nice call dog

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