LTC Properties Inc. (LTC) – a healthcare real estate investment trust (:REIT) – recently announced the completion and subsequent opening of a skilled nursing property in Amarillo, Texas. With the opening of this 120-bed property, the company replaced its existing 90-bed skilled nursing facility.
The new property has been rented out to an indirect affiliate of Fundamental under a master lease deal, which included 2 properties with a total of 316 beds. Notably, LTC Properties projects annual incremental cash rent of approximately $0.7 million from the asset. Hence, it is a strategic move that will finally aid in improving the company’s bottom line in the future.
Notably, according to the Centers for Medicare and Medicaid Services (CMS), national health expenditures will increase by 3.8% in 2013 and 7.4% in 2014. Also, as per CMS, senior citizens are the largest customers of healthcare services, with 75-year and older segment of the population spending over 200% more on healthcare services than the population average, on a per capita basis.
Moreover, LTC Properties remains relatively immune to the macroeconomic problems faced by other sectors, as even amid challenging economic conditions, consumers need to spend on healthcare services while curtailing discretionary purchases. Hence, in a steadily booming healthcare sector, the current effort offers decent growth potential going forward.
LTC Properties currently carries a Zacks Rank #3 (Hold). Better performing REIT stocks that are worth a look include CubeSmart (CUBE), DCT Industrial Trust Inc. (DCT) and Host Hotels & Resorts Inc. (HST), all of which have a Zacks Rank #2 (Buy).
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