Skilled nursing landlord Sabra Health Care posted a more than $77 million loss for the first quarter of 2019, stemming partly from its dealings with a troubled operator. But company officials said they remain enthusiastic about the field for the balance of 2019 with a “perfect storm” approaching soon.
The Irving, CA-based company recorded a more than $103 million impairment of real estate charge during this year’s first quarter, due in part to damage facilities sustained during hurricanes last year. About $92.2 million of that is tied to its dealings with Senior Care Centers, which filed for bankruptcy in December.
Sabra said it remains bullish on the skilled care space, however, with increasing occupancy and five of its top seven operators showing improved rent coverage. CEO Rick Matros said that forces seem to be aligning for SNFs, including the recently announced 2.5% market basket update, upcoming Patient-Driven Payment Model, increasingly favorable population trends, and decreasing bed supply.
“In the skilled space, you’ve almost got a perfect storm coming,” he said Thursday.
Sabra completed the sale of 28 facilities formerly operated by Senior Care Centers in April for $282.5 million. It also collected a $5 million settlement payment from its once-largest tenant. Of the 10 remaining SCC properties, Sabra plans to switch tenants at seven and sell the other three.
SCC filed for bankruptcy in December, hampered by inadequate Medicaid rates and ballooning rent costs.