Strong Fundamentals in the High End of the Senior Housing Market: Expert Analyst Omotayo Okusanya Discusses Where Health Care REITs are Focusing with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - July 30, 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: Healthcare Realty Trust Inc. (HR), Brookdale Senior Living Inc. (BKD), Emeritus Corp. (ESC), Ventas Inc. (VTR), Health Care REIT Inc. (HCN), Senior Housing Properties Trus (SNH) and many more.

In the following excerpt from the Medical Real Estate Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Are you seeing many of the health care REITs using the RIDEA structure? Doesn't that expose them more to the operations, versus simply collecting rents?

Mr. Okusanya: You have seen two names be pretty aggressive in regard to using the RIDEA structure: Ventas (VTR) as well as HCN (HCN) have been pretty active in using the RIDEA structure. Senior Housing Properties Trust (SNH) is also starting to ramp up on the RIDEA side as well.

All the RIDEA activity that they are involved in is senior housing related, so there is no reimbursement risk associated with that. That's purely being attracted to the growth opportunities in regard to rental increases as well as occupancy increase you could see on a going forward basis.

I think the news of senior housing fundamentals being soft in 2Q could raise some questions for some of these REITs that now have these RIDEA operating platforms, but as I mentioned earlier, what you generally see, for Ventas and HCN in particular, is that their RIDEA senior housing operating platforms are very focused on the high end of the market, where you are still seeing very strong fundamentals.

TWST: What are your top stock picks and recommendations right now?

Mr. Okusanya: In an interesting twist, this is probably the first time we have spoken when I don't have a "buy" rating on any of the health care names. That highlights my caution over the next 12 months on this idea of, in a rising rate environment, you generally tend to see health care underperform, and these are names that are already trading at premium valuations. It's very difficult for me to have a "buy" rating on any of our health care names at this point, although I would say I still have a...

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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