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Senior Housing Properties (SNH) Message Board

  • mt_suit mt_suit Oct 27, 2000 1:33 PM Flag

    ING upgrades BEV

    from Hold to Buy.

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    • << Thus, we can deduce that both IHS
      and
      Mariner continue to see a benefit in leasing
      these properties ie. they must be
      profitable or
      they would have relinquished the leases in BK as they
      are
      entitled to do. >>

      I don't have any
      experience with how the bankruptcy process works. The MT 2Q
      earnings press release suggested that courts might cancel
      leases on some MT properties run by bankrupt operators.
      I doubt that an operator can arbitrarily and
      unilaterally walk away from a lease or other contractual
      obligation.

      << On the other hand, they did relinquish the SNH
      leases.Is it
      fair to assume that theses SNH leases were
      less profitable? >>

      The only information
      from SNH was that the net operating revenues would be
      less than the rental income formerly
      received.

      SNH moved very early to get back those properties and
      received compensation from IHS and Mariner in exchange for
      cancelling the leases. Industry prospects looked more dismal
      in the Spring. It's possible that SNH could have
      done nothing, received rent, and continue to receive
      shceduled rent as IHS and MPAN emerge from bankruptcy. It's
      possible that IHS and MPAN regret those deals because of
      the assets that they gave up to SNH. It will take
      some time to judge whether repossession was a good
      idea.

      I dont know standard real estate management
      practice regarding bankrupt tenants. RMR is generally
      conservative and they may feel that removal of problem tenants
      is always the best way to preserve property
      values.

      << Do you really see 10 times greater upside than
      downside on SNH? Why? >>

      1) return to normal
      business conditions
      2) return to normal market
      valuation

      I bought SNH in my wife's account at 8 1/4. She has
      never lost money on a stock.

    • <<Thus, we can deduce that both IHS and
      Mariner continue to see a benefit in leasing these
      properties ie. they must be profitable or they would have
      relinquished the leases in BK as they are entitled to do. On
      the other hand, they did relinquish the SNH leases.Is
      it fair to assume that theses SNH leases were less
      profitable?>>

      Lots of factors at play here. First, SNH moved
      aggressively to take control of the homes. We have no way of
      knowing if IHS and Mariner would have rejected the leases
      in absence of such a move by SNH. It's possible the
      operators would have preferred to keep the homes but SNH
      made them an offer too good to resist. There's really
      no way to know.

      Why did they do it? SNH says
      to stabilize the homes and avoid the uncertainties
      of BK court proceedings. Cynics would say RMR jumped
      at the opportunity to funnel dollars into their own
      pockets via 5 Star. I remain undecided and will be
      scouring the 10Q for clues.

    • I am continuing my DD of MT and have stumbled
      onto an issue that relates to SNH. I would appreciate
      your comments. In the MT 6/30/00 10Q, it states that
      both Mariner and IHS, tenants of MT (and SNH) are
      current in their rent (not their mortgages). Thus, we can
      deduce that both IHS and Mariner continue to see a
      benefit in leasing these properties ie. they must be
      profitable or they would have relinquished the leases in BK
      as they are entitled to do. On the other hand, they
      did relinquish the SNH leases.Is it fair to assume
      that theses SNH leases were less profitable? If so,
      how much less? Is this not the key question with
      respect to SNH's 3rd qtr.?

      Do you really see 10
      times greater upside than downside on SNH? Why?

    • << I own alot of
      SNH.
      >>

      Me too, but I don't own an insane amount because I'm
      waiting to see the upcoming 10Q with details of the
      repossessed homes. If it looks good and the stock doesn't
      move then I'm willing to buy more before
      year-end.

      Over the next year I think the worst case for SNH is
      down 1 point and the best case is up 10 points. Even
      if it goes nowhere we still collect the
      dividends.

      My guess is that this little dip came from tax
      selling. If SNH can get back over 10 in November then
      December selling should be limited. If SNH is around $9 at
      11/30 then it will dip again in Dec.

    • Do you know which nursing-home-reits have leased property to BEV?

    • Good news mt_suit. Thanks again for keeping us
      posted. Those ****ing HMO's got a much larger share of
      the additional medicare $ that Congress just
      approved. Still some $ is better than nothing. I believe
      Clinton will sign.

      • 1 Reply to COOLREIT
      • Cool sez: "Those ****ing
        HMO's got a much
        larger share of the additional medicare $ that
        Congress
        just approved. Still some $ is better than
        nothing"

        The impression I get from company reports is that
        nursing home occupancy rates are quite high (usually over
        90%). With no new construction it wont be too long
        before the industry is at capacity. Rates will
        inevitably rise as poeple compete for scarce space.

 
SNH
23.03+0.53(+2.36%)3:18 PMEST

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