Signs of Trouble?
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Anthem Memory Care has been a hot topic during recent quarterly investor calls held by LTC REIT and not all in a positive fashion.
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Anthem Memory Care is in default on their master lease with LTC Properties
LTC REIT held their Q2 2018 Earnings Call on August 9, 2018 and here is an excerpt from LTC REIT's Q2 2018 Supplemental Operating and Financial Data summary report...
"During 2017, we issued a notice of default to Anthem resulting from Anthem’s partial payment of minimum rent. Anthem operates 11 operational memory care communities under a master lease. We are currently not pursuing enforcement of our rights and remedies pertaining to known events of default under the master lease and our guarantees, with the stipulation that Anthem achieve certain levels of performance and pays an annual total amount of approximately $5,200 toward their obligations of the master lease through December 31, 2018. We receive regular financial performance updates from Anthem and continue to closely monitor Anthem’s performance obligations under the master lease agreement."
(NOTE: The summary report figures are given in thousands.)
"During 2017, we issued a notice of default to Anthem resulting from Anthem’s partial payment of minimum rent. Anthem operates 11 operational memory care communities under a master lease. We are currently not pursuing enforcement of our rights and remedies pertaining to known events of default under the master lease and our guarantees, with the stipulation that Anthem achieve certain levels of performance and pays an annual total amount of approximately $5,200 toward their obligations of the master lease through December 31, 2018. We receive regular financial performance updates from Anthem and continue to closely monitor Anthem’s performance obligations under the master lease agreement."
(NOTE: The summary report figures are given in thousands.)
2020 Update
LTC REIT held their Q2 2020 Earnings Call on July 31, 2020 and here is an excerpt from LTC REIT's Q2 2020 Supplemental Operating and Financial Data summary report...
"Anthem is currently being accounted for on a cash basis. As a result of Anthem’s default under its master lease in 2017, they are on a cash basis. We anticipate that Anthem will pay annual cash rent of $9,900 million through 2020. However, the COVID-19 pandemic may adversely impact Anthem’s operating cashflow and ability to pay rent. We receive regular financial performance updates from Anthem and continue to monitor Anthem’s performance obligations under the master lease agreement."
"Anthem is currently being accounted for on a cash basis. As a result of Anthem’s default under its master lease in 2017, they are on a cash basis. We anticipate that Anthem will pay annual cash rent of $9,900 million through 2020. However, the COVID-19 pandemic may adversely impact Anthem’s operating cashflow and ability to pay rent. We receive regular financial performance updates from Anthem and continue to monitor Anthem’s performance obligations under the master lease agreement."
LTC REIT's Financial Reports...
June 2017 - LTC REIT's Q2 2017 Supplemental Operating and Financial Data summary report
September 2017 - LTC REIT's Q3 2017 Supplemental Operating and Financial Data summary report
December 2017 - LTC REIT's Q4 2017 Supplemental Operating and Financial Data summary report
March 2018 - LTC REIT's Q1 2018 Supplemental Operating and Financial Data summary report
June 2018 - LTC REIT's Q2 2018 Supplemental Operating and Financial Data summary report
September 2018 - LTC REIT's Q3 2018 Supplemental Operating and Financial Data summary report
December 2018 - LTC REIT's Q4 2018 Supplemental Operating and Financial Data summary report
March 2019 - LTC REIT's Q1 2019 Supplemental Operating and Financial Data summary report
June 2019 - LTC REIT's Q2 2019 Supplemental Operating and Financial Data summary report
September 2019 - LTC REIT's Q3 2019 Supplemental Operating and Financial Data summary report
December 2019 - LTC REIT's Q4 2019 Supplemental Operating and Financial Data summary report
March 2020 - LTC REIT's Q1 2020 Supplemental Operating and Financial Data summary report
June 2020 - LTC REIT's Q2 2020 Supplemental Operating and Financial Data summary report
(NOTE 1: Just search for "Anthem" in the PDF report.)
(NOTE 2: The summary report figures are given in thousands.)
September 2017 - LTC REIT's Q3 2017 Supplemental Operating and Financial Data summary report
December 2017 - LTC REIT's Q4 2017 Supplemental Operating and Financial Data summary report
March 2018 - LTC REIT's Q1 2018 Supplemental Operating and Financial Data summary report
June 2018 - LTC REIT's Q2 2018 Supplemental Operating and Financial Data summary report
September 2018 - LTC REIT's Q3 2018 Supplemental Operating and Financial Data summary report
December 2018 - LTC REIT's Q4 2018 Supplemental Operating and Financial Data summary report
March 2019 - LTC REIT's Q1 2019 Supplemental Operating and Financial Data summary report
June 2019 - LTC REIT's Q2 2019 Supplemental Operating and Financial Data summary report
September 2019 - LTC REIT's Q3 2019 Supplemental Operating and Financial Data summary report
December 2019 - LTC REIT's Q4 2019 Supplemental Operating and Financial Data summary report
March 2020 - LTC REIT's Q1 2020 Supplemental Operating and Financial Data summary report
June 2020 - LTC REIT's Q2 2020 Supplemental Operating and Financial Data summary report
(NOTE 1: Just search for "Anthem" in the PDF report.)
(NOTE 2: The summary report figures are given in thousands.)
Please check out information obtained from the LTC REIT corporate investor information page which highlights the financial difficulties that are being encountered by Anthem Memory Care...
(NOTE: Just run a text search for "Anthem" in the PDF transcripts to skip to discussions related to them.)
(source: http://ir.ltcreit.com/presentations.aspx?iid=102970)
(NOTE: Just run a text search for "Anthem" in the PDF transcripts to skip to discussions related to them.)
(source: http://ir.ltcreit.com/presentations.aspx?iid=102970)
August 10, 2017 - LTC Properties, Inc. Q2 2017 Earnings Call
- Transcript
- Audio Replay (the discussion about Anthem Memory Care starts around the 14- minute mark of the audio file)
November 9, 2017 - LTC Properties, Inc. Q3 2017 Earnings Call
- Transcript
- Audio Replay (the discussion about Anthem Memory Care starts around the 5-minute mark of the audio file with the question and answer session starting around the 21:45 mark)
March 2, 2018 - LTC Properties, Inc. Q4 2017 Earnings Call
- Transcript
- Audio Replay (the discussion about Anthem Memory Care starts around the 5-minute mark of the audio file with the question and answer session starting around the 19:30 mark - an Anthem Memory Care rent question/answer starts at 25:15 mark)
May 10, 2018 - LTC Properties, Inc. Q1 2018 Earnings Call
August 9, 2018 - LTC Properties, Inc. Q2 2018 Earnings Call
November 6, 2018 - LTC Properties, Inc. Q3 2018 Earnings Call
March 1, 2019 - LTC Properties, Inc. Q4 2018 Earnings Call
May 10, 2019 - LTC Properties, Inc. Q1 2019 Earnings Call
August 9, 2019 - LTC Properties, Inc. Q2 2019 Earnings Call
November 1, 2019 - LTC Properties, Inc. Q3 2019 Earnings Call
February 21, 2020 - LTC Properties, Inc. Q4 2019 Earnings Call
May 4, 2020 - LTC Properties, Inc. Q1 2020 Earnings Call
July 31, 2020 - LTC Properties, Inc. Q2 2020 Earnings Call
Note about the lease-up figures discussed during these quarterly investor calls...
All of the facilities operated by Anthem Memory Care in Illinois contain sixty-six units, so you can do the math to determine what the "improving" occupancy rates mentioned actually equate to. The "number of months to stabilization" figure provided in the financial summary reports is misleading to a degree. That figure is supposed to reflect the time taken to achieve a 90% occupancy rate at a given facility. However, if that fails to occur within 24 months then Anthem Memory Care stops reporting the actual occupancy rates and just moves the facility over to the stabilized facility list. |
This website is not seeking to unfairly bash Anthem Memory Care - just reporting the facts that exist and wondering what the future will hold for the single-family residential neighborhood should this facility fail.
Grace Point Place in Oak Lawn has now been open since May 2018 and occupancy stood at 73% at the end of March 2020. That's after twenty-two months of operation for a facility that was supposedly required to meet the demand in the area. It would appear that Anthem Memory Care either misjudged the market or their private pay model does not fit the market.
According to Wendy Simpson, the Chairman, CEO & President of LTC REIT, there is no guarantee that it will not be sold to resolve the loan default situation.
Perhaps the "what if it fails" concerns that were raised by area residents during the community meetings and public hearings were not so far-fetched after all.
Please check out the articles that have been published by others regarding the financial difficulties that are being encountered by Anthem Memory Care and other long-term care facility operators...
Grace Point Place in Oak Lawn has now been open since May 2018 and occupancy stood at 73% at the end of March 2020. That's after twenty-two months of operation for a facility that was supposedly required to meet the demand in the area. It would appear that Anthem Memory Care either misjudged the market or their private pay model does not fit the market.
According to Wendy Simpson, the Chairman, CEO & President of LTC REIT, there is no guarantee that it will not be sold to resolve the loan default situation.
Perhaps the "what if it fails" concerns that were raised by area residents during the community meetings and public hearings were not so far-fetched after all.
Please check out the articles that have been published by others regarding the financial difficulties that are being encountered by Anthem Memory Care and other long-term care facility operators...
August 11, 2017
https://seekingalpha.com/news/3288676-ltc-properties-falls-nearly-4-percent-downgrade
https://seekingalpha.com/news/3288676-ltc-properties-falls-nearly-4-percent-downgrade
August 13, 2017
https://seniorhousingnews.com/2017/08/13/anthem-fails-to-make-rent-ltc-halts-future-development/
https://seniorhousingnews.com/2017/08/13/anthem-fails-to-make-rent-ltc-halts-future-development/
August 14, 2017
https://seniorhousingnews.com/2017/08/14/standalone-memory-care-providers-struggling-occupancy/
https://seniorhousingnews.com/2017/08/14/standalone-memory-care-providers-struggling-occupancy/
November 9, 2017
https://seniorhousingnews.com/2017/11/09/ltc-tenant-anthem-back-track-occupancy-improves/
https://seniorhousingnews.com/2017/11/09/ltc-tenant-anthem-back-track-occupancy-improves/
November 10, 2017
https://www.mcknightsseniorliving.com/news/anthem-making-good-progress-on-challenges-ltc-ceo-says/article/706734/
https://www.mcknightsseniorliving.com/news/anthem-making-good-progress-on-challenges-ltc-ceo-says/article/706734/
March 4, 2018
https://seniorhousingnews.com/2018/03/04/ltc-offloads-sunrise-portfolio-sees-anthem-improvements/
https://seniorhousingnews.com/2018/03/04/ltc-offloads-sunrise-portfolio-sees-anthem-improvements/
May 10, 2018
https://seniorhousingnews.com/2018/05/10/ltc-looks-ahead-anthem-portfolio-turnaround-continues/
https://seniorhousingnews.com/2018/05/10/ltc-looks-ahead-anthem-portfolio-turnaround-continues/
August 9, 2018
https://seniorhousingnews.com/2018/08/09/ltc-ceo-triple-net-leases-not-evil-thrive-gets-1-4m-rent-deferment/
https://seniorhousingnews.com/2018/08/09/ltc-ceo-triple-net-leases-not-evil-thrive-gets-1-4m-rent-deferment/
August 22, 2018
https://seniorhousingnews.com/2018/08/22/memory-care-inventory-surged-occupancy-sank-last-four-years/
https://seniorhousingnews.com/2018/08/22/memory-care-inventory-surged-occupancy-sank-last-four-years/
November 6, 2018
https://seniorhousingnews.com/2018/11/06/ltc-properties-faces-near-term-senior-housing-acquisition-drought/
https://seniorhousingnews.com/2018/11/06/ltc-properties-faces-near-term-senior-housing-acquisition-drought/
November 7, 2018
https://www.mcknightsseniorliving.com/home/news/ltc-investigates-market-operator-issues-in-quest-for-occupancy-answers/
https://www.mcknightsseniorliving.com/home/news/ltc-investigates-market-operator-issues-in-quest-for-occupancy-answers/
March 3, 2019
https://seniorhousingnews.com/2019/03/03/ltc-focused-on-troubled-tenants-positioning-for-acquisitions/
https://seniorhousingnews.com/2019/03/03/ltc-focused-on-troubled-tenants-positioning-for-acquisitions/
July 29, 2019
https://seniorhousingnews.com/2019/07/29/hard-hit-memory-care-sector-faces-slow-road-to-recovery/
https://seniorhousingnews.com/2019/07/29/hard-hit-memory-care-sector-faces-slow-road-to-recovery/
August 9, 2019
https://seniorhousingnews.com/2019/08/09/ltc-completes-thrive-transition-fine-tunes-acquisition-strategy/
https://seniorhousingnews.com/2019/08/09/ltc-completes-thrive-transition-fine-tunes-acquisition-strategy/
August 12, 2019
https://www.mcknightsseniorliving.com/home/news/ltc-moves-last-thrive-community-to-affinity-as-it-looks-to-diversify-operator-base/
https://www.mcknightsseniorliving.com/home/news/ltc-moves-last-thrive-community-to-affinity-as-it-looks-to-diversify-operator-base/
November 1, 2019
https://seniorhousingnews.com/2019/11/01/ltc-sees-stable-q3-as-tenant-cleanup-continues/
https://seniorhousingnews.com/2019/11/01/ltc-sees-stable-q3-as-tenant-cleanup-continues/
February 21, 2020
https://seniorhousingnews.com/2020/02/21/with-new-operators-in-tow-ltc-to-dig-deep-to-find-deals/
https://seniorhousingnews.com/2020/02/21/with-new-operators-in-tow-ltc-to-dig-deep-to-find-deals/
February 24, 2020
https://www.mcknightsseniorliving.com/home/news/ltc-properties-expects-to-dig-deep-for-transactions-older-buildings-senior-apartments-of-interest/
https://www.mcknightsseniorliving.com/home/news/ltc-properties-expects-to-dig-deep-for-transactions-older-buildings-senior-apartments-of-interest/