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Senior Housing Properties (SNH) Message Board

  • waterski4689 waterski4689 Dec 30, 2011 4:28 PM Flag

    how will lost Sunrise leases affect SNH?

    Does anyone know how the loss of these leases in 2013 will affect SNH? Can the y leaase to someone else?

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    • First of all, keep in mind that SNH will continue to collect rent on these properties for the next two full years, so whatever happens will really only affect 2014 and beyond. While there's not a lot to go on here, SNH did say that the 10 Sunrise properties are covering their minimum rent by 1.6x on a weighted average basis, which seems decent considering occupancy is only 87%. Absent material changes in coverage, it seems likely that the current base rent levels are sustainable in 2014 (indeed, Sunrise has already offered to renew under current terms), regardless of whether Sunrise remains as the operator or the properties move to someone else. Even with Sunrise/Marriott exercising their renewal option on 4 of the 14 properties (likely the strongest ones), SNH should still do ok with the remaining 10 properties in question. Keep in mind too that these 10 properties only represent 3% of SNH's total NOI, so it's not going to have a big impact on company performance. Hope this is helpful.

 
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