A REIT is a REIT is a REIT, right?
California-based LTC is a health care REIT [real estate investment trust] of about $2 billion investing in about 180 health care properties, half of which are skilled nursing facilities (SNF). And while new co-presidents Clint Malin and Pam Kessler plan to continue the REIT’s mission as a long-term capital provider, they and their colleagues are reimagining the role they can play in helping their existing and potential operating partners.
Here are three things SNF operators should know about the work LTC is doing during these unprecedented times, starting with a new look at an old phrase: “open for business.”
Remaining “open for business”
When the COVID-19 pandemic struck heavily in March, the leaders at LTC began to look more creatively at how they could assist operators, by first looking at their major needs. One of them is something that is not necessarily in the domain of a triple-net REIT — which is why their work in this area with SNF operators was so vital.
“We remain dedicated to supporting our operators, and early on, that meant helping them source PPE,” Kessler says, referring to the vital personal protective equipment of masks, gloves, gowns, and other items that operators suddenly realized were essential for maintaining health and safety within their facilities.
Leaders within LTC created a secured portal where all of their operators could collaborate to help each other find the best sources for PPE plus other resources such as staffing solutions, protocols/best practices and links to government assistance information.
“You remember, in those early stages, that was the main critical area where everybody needed help,” Kessler says.
Additionally, LTC collaborated with operating partner Juniper Communities to create Virtual Connections, an online hub for free activities, entertainment and resources, both spiritual and wellness-minded, targeted toward seniors.
LTC’s work in the early portions of the coronavirus pandemic was of that nature: looking not at what a REIT traditionally does, but standing back and looking at the cross-section between their full professional capabilities and the emerging, urgent needs of their operating partners. Sourcing PPE was one such solution. Working with operators that needed deferred rent was another. Advocating for government assistance for both SNF and senior housing operators was a third.
“We had not gotten that detailed into the advocacy side,” Malin says. “It’s really been more financial support to these organizations and their underlying lobbying efforts, but this was probably one of the first times where we got engaged into corresponding with members of Congress. A lot of letter writing.”
Results have varied. SNF operators have been helped quite a bit by various parts of the CARES Act, while private pay senior housing has been more of a challenge for Congress to determine a payment mechanism.
Differentiation of LTC
Still, as this work has played out, operators have appreciated LTC’s unrelenting support, including in the traditional ways of supporting projects. As COVID-19 throws much of everyday life and standard practices into question, LTC is proceeding with caution throughout its normal procedures as a REIT.
Cap rates and operating margins remain a source of uncertainty, for instance, as do occupancy and labor pressure. SNF operators have been managing the sometimes impossible task of how to handle patients with COVID. There are a lot of factors in flux.
As a result, the REIT is focusing a bit more than usual on short-term investments. Yet they have not slowed down their workload and their support of existing and potential operating partners.
“As a long-term capital provider, we have not backed away from underwriting projects,” Malin says.
New co-presidents steering LTC to the future
For Malin and Kessler, 2020 was already going to be a year of change. In May, Malin, the chief investment officer, and Kessler, the chief financial officer, became co-presidents of their long-time REIT. They will retain their respective roles, and Chief Executive Officer Wendy Simpson will continue to lead the way.
But Malin and Kessler will also each bring their unique brand of leadership and deal-making to the table.
“Our plan is to continue LTC’s legacy and dedication as a long-term capital provider in seniors housing and care,” Malin says.
To learn more about why LTC might be right for you, visit LTCREIT.com.