Craig M. Bernfield, CEO and Chairman of Aviv REIT, Inc. (AVIV), Interviews with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - July 25, 2013 - The Wall Street Transcript has just published its Medical Real Estate Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: REIT Access to Capital - Affordable Care Act and Reimbursements - Hospitals, Senior Housing, Skilled Nursing and Acute Care - Medicare and Medicaid Reimbursements - Consolidation Activity - Health Care REITs

Companies include: Aviv REIT, Inc. (AVIV) and many more.

In the following excerpt from the Medical Real Estate Report, the CEO and Chairman of Aviv REIT, Inc. (AVIV) discusses company strategy and the outlook for this vital industry:

TWST: Have you given formal guidance for the rest of the year?

Mr. Bernfield: We did. We had provided investors with a pretty clear expectation of what we would do in 2013, because that was very relevant to their underwriting of the offering. Our AFFO guidance for 2013 is $1.73 to $1.77 per share, and that includes the impact of the $220 million of investments that I spoke about. Since the beginning of the year was focused on completing the IPO, we expect most of our acquisition activity and investment activity will be in the second half of the year, and a lot of it may be toward the end of the year. But our pipeline is active, and again, we're working with new and existing operator relationships, and we're optimistic that the second half of the year will be busy with new investments.

TWST: You noted a minute ago operations and real estate being more intertwined. There are some key differences from an investor's standpoint between owning a REIT like Aviv and owning an operator. What would you point out in that regard, particularly in terms of exposure to reimbursement and similar concerns?

Mr. Bernfield: A REIT is an entirely different vehicle than an operating company. As a REIT, we own the real estate, and 100% of our business is our properties being triple-net leased to third-party operators. As a REIT, we're not running the properties, so we're insulated if there is variability in the cash flows at the operator level; we're getting triple-net rent. We also have organic growth from 2% annual compounded escalators across the portfolio, so we're getting our rent regardless.

Of course, we're focused on the performance of the facility so we can eat well and sleep well. Our rent coverage today is at 1.7 times, so that indicates that there is a tremendous cushion for the operators to pay the rent, as well as for the operators to do well and prosper, and we do like wealthy tenants because they're able to pay the rent, and they're also ambitious when it comes to growing their business platforms.

The operators have direct exposure to changes in reimbursement, although the reimbursement, contrary to headlines, has actually been quite good over my 25-year career in this business, and also in the last five years when the headlines have been kind of ominous, the reality has not been bad. Most of the states have been supportive of the reimbursement for nursing homes, and the federal government, through the Medicare subsidy, has also been, net-net over that five-year period, positive, so that's a reality for the operators. They have to deal with the government, but our experience is that...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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