Q4 2020 Sabra Health Care REIT Inc Earnings Call
And do the other.
Hey, Bill.
And as well.
Yes.
Sure.
And she is valuable.
And <unk>.
[music] balance shown and <unk>.
And then.
Ladies and gentlemen, and today's conference call is scheduled to begin shortly please continue to standby and thank you for your patience.
Just one day.
Yes.
And.
And all of them.
[music] yet.
And we.
And for Us.
[music] channel.
Yes.
No.
Yeah.
And.
Yeah.
You can.
The game and you can at all or do you know and book.
Well you tell.
Tell me.
And then with your growth.
Shale play.
And one thing can be too and.
It doesn't take in and that's it.
Hi.
[music], Hey, Betsy and I go.
And they buy it.
So on the volume.
[music] zone and <unk>.
Things are going over.
And as you know.
And they will.
[music] shower and easy.
The volume.
[music] zone.
Debt.
And is too long and will.
[music].
Yeah.
Ladies and gentlemen, thank you for standing by welcome to the Sabra Health care REIT fourth quarter 2020 earnings conference call at.
At this time all participant lines are in a listen only mode.
After the Speakers' presentation there'll be a question and answer session to ask a question. During the session you will need to press star one and your telephone.
Please be advised for today's conference is being recorded and you're acquiring further assistance. Please press star zero and.
And now I'll turn the conference over tourists and good day, Michael cockpit Executive Vice President Finance and Chief Accounting Officer. Thank you. Please go ahead Sir.
Thank you.
Before we begin I want to remind you that we will be making forward looking statements and our comments and in response to your questions concerning our expectations regarding our future financial position and results of operations, including the expected impacts of the ongoing COVID-19 pandemic our expectations.
Regarding our tenants and operators and our expectations regarding our acquisition disposition and investment plans.
These forward looking statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially including the risks listed in our form 10-K for the year ended December 31, 2020 that was filed with the SEC yesterday.
As well as in our earnings press release included as exhibit 99, one to the form 8-K, we furnished to the SEC yesterday.
We undertake no obligation to update our forward looking statements to reflect subsequent events or circumstances and you should not assume later in the quarter for comments, we make today are still valid.
In addition references will be made during the call to non-GAAP financial results.
<unk> are encouraged to review these non-GAAP financial measures as well as the explanation and reconciliation of these measures to the comparable GAAP results included and the financials page of the investors section of our website at Www Dot Sabra health Dot com.
Our form 10-K earnings release and supplement can also be access and the investors section of our website.
And with that let me turn the call over to Rick Metros, Chairman and CEO of Sabra Health care REIT.
Thanks, Mike and good day to everybody and thanks for joining us and I appreciate it.
First let me start by once again thanking our operators who've just other than may.
King job.
Sure and resilience and dedication and here we are a year later, who would have thought.
And and then finally, they are at a point, where we really see the light at the end of the tunnel.
And perhaps some real positivity, which I'll talk about and a few more minutes.
Oh for women.
Work force, all the caregivers and other frontline employees and a.
Facilities, who continue to show up every day.
And and.
And execute on our mission of providing care to the elderly.
And I'd also like to express for a continued appreciation for state and federal government for continuing to provide support primarily to the skilled sector, but also to the senior housing et cetera for living sector as well and then finally I want to call out the Texas operators, who on top of everything else Shouldnt have had to go through what they went through.
And recently with.
With the weather.
All day.
Difficulty and without cause.
And Fortunately.
All the facilities have emergency backup generators, there was minor tomorrow damage if any.
And so they are fine from a physical plant perspective, only one of our facilities had to evacuate and that was for a very short period of time and there were a few facilities that had short blackouts, particularly from glass for a very long the bigger problem really was staff.
And just being able to get in and driving on the roads and all of that but we're past most of that right now, but again on top of everything else for them to have dealt with that was really difficult. So when I Express my appreciation to all of our operators and caregivers and Texas.
And also want to thank the Sabra staff, we're still working from home almost a year later.
And then just don't Miss would be productivity has been fantastic and.
And we've actually onboard and seven.
And southern new team members during the pandemic.
Which was challenging working from home, but we all made it happen we provided enhanced benefits to our staff and we've done I think some interesting things too.
To improve connectivity and just really staying in touch with each other and try and maintain the culture that we've worked so hard and developing here.
And finally, a couple of other things.
And as that pertains for the company and as we've had some significant for changes.
And what we've added three new board members clip quarter, and cocoa and Katie Kuzak Curtis.
Growth for all of our efforts to enhance the diversity of our board and they bring some really unique and itchy and skill sets that we're lacking on the board before and the areas of health care policy and investment banking data analytics and ESG.
And last but certainly not at least one other.
Congratulate Mike Costa for being promoted to Chief Accounting Officer, Mike's been with us since the beginning.
The creation and Sabra and.
It's always done an amazing job.
A great team.
And.
Couldn't be more pleased.
Having had the opportunity to work with Michael for his years and now to see him get promoted to Chief accounting Officer.
So I noted ESG with one of our new Board members a second ago, we are going to be released within the next few months are normal.
Inaugural ESG report and started working on this initiative.
Well before the parent debt.
And with floats and things down for the next few months, we will have our first report released.
Rating agencies.
Really pleased with all the work that we've done through.
And through the pandemic.
And to have Fitch come out and the firm already and remove the negative outlook with the pandemic still still something that we're all dealing with relative.
Fantastic outcome.
He also affirmed our ratings as well so we feel really great about that and Harold will talk more about that.
Now onto some of our tenants.
Everybody has seen that there was an announcement are alive and debt.
Jack Allison.
And why is moving.
Over to become the CEO of Sunrise and deal.
And he's been the COO he's been there really seems to be getting.
Dan.
And Jack rather and.
We have fantastic relationship with Dan.
And a great job building, a really deep debt.
And so we feel.
More than comfortable and feel very.
Very strongly that and do a great job as CEO, we don't expect there to be.
And any changes that are notable.
Anybody on the outside with instrumental and building a culture, there and that will continue.
All other lines that Jack established we also expect a potential we expect a resolution to the JV this year.
And.
Not really details to share at this point other than TPG.
<unk> and his let us know.
And you'd like to resolve that this year, so we'll be working with TPG and <unk>.
And the decision on whether we retain or by the five and 51 per cent out where we exit the portfolio.
For us to be able to.
Buy out the 51% that's owned by TPG, and I think as everybody knows and.
And then make notwithstanding we really like the portfolio and we like the asset team is great.
It's taken a hit during the pandemic is going to take time and recover and so this just has to work for us economically we're not going to do it just to do it.
And so whether we can get there with TPG and have a true.
Fans action.
Beneficial to our shareholders.
And remains to be seen so stay tuned for more on that and I'll talk a little bit more about that as well.
In terms of the stimulus and a.
Point out that there is still $33 billion left and the HHS from that hasn't been distributed and that's a J O numbers. So thats a very specific accurate number.
$33 billion is actually going to increase because there's quite a number of hospital providers.
The process and returning back to HHS sales of 33 billion and it's actually going to increase we think relatively significantly so.
Stay tuned on that as well.
And discussions, but we don't know what's going to happen with allocation yet on that but it certainly makes us feel pretty good.
Does that level of money sitting there still.
As you all probably know the public health Emergency Act was extended for another coal we're actually optimistic that the public health Emergency Act will be extended for the year, but technically it can only be extended and quarterly increments.
But that's the dialogue that's going on and that of course carries with it sequestration and continued way for the three day stay and ethanol.
Also want to note that we're very pleased with president and bottoms nominations and savvy other share for HHS Secretary and continue to Brooks for sure for CMS administrator.
And we look forward to having a productive relationship.
And with those folks assuming that their nominations are confirmed.
Now moving on to vaccines updated stats.
Since the start and if you ended December the numbers and improve really dramatically and the aggregate were close to about 80% of our patients and residents.
Having received at least one if not two shots of the vaccine and certainly have only received one obviously and you are scheduled to receive for second and.
Staff, which was.
And are 40% and the aggregate is now for about 60%.
And I think we're seeing with staff, what we would've expected to see and that is as they saw the residents and patients as they provide care for and their colleagues who got the vaccine for me.
Okay, and there werent any side effects.
The increase.
And increase their confidence and so those numbers picked up dramatically and we continue to expect those numbers to improve we have a number of operators that are actually over 90%.
Residents patients and employees.
And so.
It's just all good news.
Cohort restrictions for facilities due to the vaccine rollout, which will provide additional interest for occupancy improvement due to these restrictions admissions are limited simple simply due to for lack of availability of beds and facilities, which so much isolation and that's been necessary. So we've always focused on surgeries and the hospital's being and capacity.
And having regular admits for our admission flow.
<unk> occupancy and certainly those are huge factors, but the cohort restrictions have been equally maybe that equally significant but very significant as well because of the number of rooms that too.
Too bad, but we can only use one debt for those isolation protocols. So is that normalization and starts to accelerate with all those facts, we will be uptake and vaccines. Then we should see a normalization of the environment and the facilities, having more group activities. That's going to also lessen the amount of labor that we have.
And should automatically start improving the margin even ahead of occupancy improvement.
In terms of communities that have been impacted by Covid, that's improved dramatically since early January.
And the peak of the reach and Serge only two new facilities and have had positive COVID-19 tests last week and only to the week before so just dramatic improvement for that mortality and cases has come down dramatically as we've seen nationwide and long term care facilities, we see per se.
Portfolio as well so really all good news there.
And I just want to mention home health, because it's come up a lot on some of the earnings calls and it's been part of the narrative that's out there.
And in terms of the home health impact and whether or not health.
That's all for.
Skilled nursing and senior housing one I would point out that there is nothing new and this narrative this isn't their herd and thats been in existence for well over a couple of decades, it's been impacted by the different fee pandemic has had on home health and sniff occupancy and so clearly home health has benefited during the pandemic, particularly with <unk>.
But all.
License to care for life care patients.
GAAP discharge and go back to home and frankly, we think it's a good and if home health and take more patients because we do have a demographic crisis looming we have.
Decline and supplying on skilled and they're already access issues that are going to be exacerbated throughout the country in terms of skilled nursing and so we actually as a society and as the country need home health to be taking more and they take and historically from an acuity perspective, however that said.
And the paradigm isn't going to change.
Acuity differences between the settings and home health, you've got by definition interim visits by nurses and therapists and and skilled nursing facilities for 'twenty.
For seven is very intense and we see the same and assisted living and obviously now as intensive skilled nursing got much more intense.
And home with the rise and acuity over the last 10 years for assisted living for nurses around the clock therapists and.
And there every day.
So the paradigm doesn't change and we expect to see things normalize more as everything.
Everything else normalizes, and we move capacity and Derek on guidance Harold will talk in detail about about guidance, but we determined that it was best only to pay our Q1, primarily because of the managed portfolio.
And Genesis is out there we're not sure how that's going to resolve.
Either so if you could talk more about that.
But those were really really for two issues. We do think that based on the most recent statistics that we are close to bottom.
Managed occupancy coming down we can take the $168 4 million and investment activity in 2020 with a blended cash yield of just under 8%. Our acquisition pipeline currently stands at about 1 billion and a half primarily senior housing, but actually some interesting opportunities that we're looking out there, we're seeing more behavioral and addiction.
The Attunity is and we.
We're just starting to see some skilled opportunities not a whole lot there still.
And the Keystone.
Now moving to some operating statistics skilled occupancy dropped about 200 basis points from February 2020 through the end of 2020 skilled mix. However, improved 530 basis points during that point during that time, which was a very important mitigate for our operators for this point in 2021.
And Keith.
The client has.
Effectively stopped and.
Prop seven operators bottomed out actually at the end of December and they are up 210 basis points for the second week of February from the end of December.
With industry and the aggregate was actually down 850 basis points.
A 250 basis points from February 2020 through year end the day because of the industry in general has recovered 200 basis points and the two months since.
And they hit bottom.
Well so.
It's kind of too early to really project, but we've got aggregate data points for the industry and for our top operators, both improving by about 100 basis points per month.
We'd love it actually obviously, if you can stay on that and that sort of track.
And because we have really good shape by the end of this year.
As some of you know that we've talked to the conferences that we've had we projected debt skilled would be back more around the first quarter of.
'twenty 'twenty, two or pretty close to back. So we'll see if we can actually if we could actually be debt.
Our senior housing lease portfolio held up actually really quite well during that period with occupancy dropping 20 basis points and that's really a function of having small operators and.
Very specific markets.
And then 65 facilities that are and those and at least category.
And so they actually held up pretty well senior housing leased EBITDAR coverage slipped from 131 to one to five and.
Unlike the skilled.
And.
Skilled coverage EBITDA and coverage, which improved to $1 93 that was obviously in large part due to all the assistance that we've gotten on the senior housing REIT side, there was much less assistance and and the skilled space. So we would have expected that to drop zone.
125, EBITDA and.
That portfolio.
Is it a pretty good shape as well none of our operators have required any permanent restructuring so at this point.
I'll rent collections have been 99, 9% of forecasted rents.
Pandemic, and we don't expect that to change and finally, I want to point and our specialty hospital coverage and occupancy and unaffected by the pandemic and contribute a meaningful 11% of our NOI and with that I'll turn it over to Italia.
Thank you Rick.
And the fourth quarter of 2020, our senior housing managed portfolio continued to experience occupancy pressures as a result of the pandemic and the surge that followed the Thanksgiving and Christmas holiday season.
While government funding provided some mitigation from the financial pressures adoption of <unk> of the vaccine is the linchpin to getting the senior housing industry on the road to recovery.
Our operators have been intent on implementing vaccine clinics that their buildings educating and incentivising, both residents and staff to maximize participation and using their clinics and documented safety record and to demonstrate the potential residents that the fastest path to a normal lifestyle and move into a senior housing community.
CNS data compiled by next shows that Covid cases, and skilled nursing closely tracked cases and the general population from June 2020 until the launch of the Pfizer and then the Madonna vaccine.
December 2020, and January 2021, net change dramatically cases in skilled nursing began to decline just as cases and the U S. Spiked from the post holiday surge by early February new cases, and skilled nursing fell by 83% and <unk>.
Cases, and the general population and south 47% compared to late December when the Pfizer vaccine was launched after the launch and the vaccines gaps and skilled nursing.
And to decline and and have continued to do so dramatically while deaths and the general population spiked and have plateaued sense.
Skilled nursing is a leading indicator of the impacted vaccine and congregate living we have reason to be optimistic.
As at the end of the fourth quarter of 2020, approximately 14% of Sabra annual cash net operating income was generated by our senior housing managed portfolio approximately 49% of that relates to the communities that are managed by 11% and 37% relates to our holiday managed communities. The balance includes our Canadian port.
Palio and five assisted living and memory care communities and the U S.
To start I will provide highlights of the operating results for the managed portfolio, which includes both the wholly owned portfolio and sabra share of the unconsolidated joint venture and our same store sequential book quarter basis to illustrate the trends and the industry. These results exclude two recent acquisitions and one transition community and all.
Wholly owned portfolio consistent with the presentation and the supplemental information package.
I can see declined 280 basis points to 76, 4% and the fourth quarter of 2020 in line with the 270 basis point decline experienced in the third quarter over the prior quarter Rev.
Revenue per occupied room Revpar, excluding government grants received rose one 6% this quarter compared with <unk>.
And increase of one 7% and the previous quarter revenue decreased five 8% and the fourth quarter of 2020 compared to the third quarter inclusive of $1 $1 million and for point out for.
$4 million, respectively and for government funds received by eligible assisted living facilities. If we exclude the grant revenue and same store revenue declined one 9%.
Cash net operating income for the quarter decreased sequentially by 24, 9% to $14 8 million from $19 $7 million. Excluding the government grants cash net operating income would have declined by 12, 5% on a sequential basis.
Cash NOI margin decreased to 21, 3% from 26, 8% and the preceding quarter, excluding government grants cash NOI margin would have been 21% and our fourth quarter and 22, 5% and the preceding quarter.
In the fourth quarter, we saw the same occupancy and rate dynamic as we saw and the third quarter rising rates and continued decline in occupancy, resulting and a decline in revenue and a business with high operating leverage government funds received by eligible operators have had a disproportionate impact on cash net operating income.
And depending on the amount and the timing of receipts.
The and live and joint venture portfolio.
Of which sabra owns 49% had a challenging fourth quarter as a result of lower occupancy and operating revenue that was only slightly offset.
By the receipt of approximately $484000 and government grants.
Average occupancy for the quarter was 71, 6%, reflecting a four 2% decline on a same store sequential quarter basis, and a 10, 6% decline on a same store basis compared with the fourth quarter of 2019.
Revpar, excluding government funding was 4576, compared with 4000, and 411 or three 8% higher on a same store sequential basis, and three 6% higher on a same store basis compared with the fourth quarter of 2019.
Revenue was eight 6% lower on a same store sequential quarter basis, and eight 5% lower on a same store basis compared with the fourth quarter of 2019.
<unk> government funds revenue decreased by one nine.
And 9% on a same store sequential basis, and nine 8% on a same store basis compared with the fourth quarter of 2019.
Same store cash net operating income was $5 $2 million, a 43% decrease on a sequential quarter basis, driven by lower government funds in the fourth quarter without those funds and same store cash NOI would have declined 22, 3%.
Subsequent to the end of the quarter January 2021 occupancy was 68, 9% 140 basis points lower than December 2020 occupancy.
Since the pandemic began nearly all of our and live in joint venture communities had a resident or staff member test positive for COVID-19.
Late February only 10 communities had a resident or staff member with a positive test compared with 35 at the end of January and say, 70% decline.
All of the communities and the joint venture have completed their first vaccine clinic, and 50% and they've had their second clinic data. So far shows that 94% of residents and 64% of staff received the vaccine a significantly higher rate than industry average.
January 2021 saw a rise in moving this compared to the prior month, while move outs and remained at a reduced level similar to move outs for the holiday surge the GAAP between move in and move out started to narrow in January and that momentum has continued into this month.
The fourth quarter operating results for Sabra wholly owned and live and portfolio of 11 communities had similar themes and its performance.
Fourth quarter occupancy was 77% eight for 2% decline compared to the prior quarter and a 12, 5% decline compared with the fourth quarter of 2019.
Revpar in the fourth quarter, excluding government funding of $549000 was 6029.
For <unk>, 7% higher than the prior quarter, and three 8% higher compared with the fourth quarter of 2019.
Revenue was $3, 3% lower on a sequential quarter basis, and five 1% lower compared with the fourth quarter of 2019, excluding government funds revenue with nearly flat on a sequential quarter basis, and 10, 7% lower compared with the fourth quarter of 2019.
Cash net operating income was $1 9 million, a 32, 2% decrease on a sequential quarter basis helped slightly by the government grants without those funds and same store cash NOI would have decreased 32, 6% for the same period.
More recently.
January occupancy was 68, 4%.
510 basis points below the prior month, while only two of our wholly owned and live and communities currently have a resident or staff member who is positive for COVID-19, that's down from six at the end of January all 11 communities were touched by Covid during the post holiday surge and the combination of and increase.
And resident gaps and move and restrictions, resulting from the start had an outsized impact on occupancy and live and also incurred higher costs associated with the surge, including labor cost as well as increased PPE needs.
Mid February and all of these communities have their first vaccine clinic and have had already completed their second clinic with 94% of residents and 64% of employees receiving vaccine.
While it will take time to rebuild occupancy back to the pre pandemic levels of 90 plus percent and January we saw a reduction of about 25% and move outs in tandem with an increase in move ins of about 150 per cent compared with the prior month.
This momentum along with vaccine clinics, driving a rapid reduction and infection lays the groundwork for occupancy to rebuild.
Holiday retirement operates 22 independent living communities for Sabra, and one of which with transition to holiday and the fourth quarter of 2019 note that these properties were not eligible to receive government support distributed to assisted living providers. All of the following operating results are presented on a same store basis and.
For the transition property.
Holiday portfolio occupancy was 88% and the quarter, one 7% lower on a sequential basis, and 7% lower compared with the fourth quarter of 2019.
<unk> par with 2000 and $518 flat to the prior quarter, and one 3% higher compared with fourth quarter 2019.
Revenue declined two 2% compared to the prior quarter and six 9% compared with the fourth quarter of 2019 and cash net operating income was $6 $1 million, a three 4% increase on a sequential basis and 10, 1% decline compared with fourth quarter of 2019.
Subsequent to the end of the quarter, excluding the one transitioned community January occupancy was 79, 8% compared to 87% in December 2020, a 90 basis point decline.
Over the last year, all 22 properties that holiday managers for Sabra have had a resident staff member our private home health aide test positive for COVID-19.
As of mid February.
17 communities have recovered and are in various stages lifting restrictions such as dining argues that reduced capacity limited visits and reopening of the beauty Salon independent living communities were not eligible for government aid and.
And prioritized on premises vaccine clinics and order to continue to keep its residents say holiday is needed to be creative and organizing and negotiating vaccination strategies holiday. Currently has 13 of our communities with confirmed vaccination partners and five of those community communities have already.
Held five initial clinics for residents and and.
And associated with 78% and 37% vaccinated respectively.
And the fourth quarter of 2020 holiday saw a rebound and sales activity with lead move ins and move outs tracking between 95 and 99% for the fourth quarter and 2019, we are now seeing a GAAP between move outs and move ins narrow significantly.
And on the heels and vaccine distributions, reflecting the same trends that we spoke about and admire them.
Sienna senior living manages eight retirement homes, and Ontario, and British Columbia for Sabra and the fourth quarter. The Sienna portfolio had 79, and 5% occupancy flat on a sequential basis and eight 8% lower compared with the fourth quarter of 2019, Revpar was 2000 and $488.
Two and 5% lower than the prior quarter, and and two 2% lower compared with fourth quarter 2019 for.
Fourth quarter revenue was $4 $5 million, 2.5% lower than the prior quarter, and 11, 9% lower compared with fourth quarter 2019, driven by occupancy declines and.
And our fourth quarter cash net operating income was just over $1 million, a one 3% decline on a sequential basis, and a 44% decline compared with fourth quarter 2019.
More recently January occupancy was 78, 5%, a 30 basis point decline compared with the prior month.
Only one of our retirement homes have had a confirmed case of COVID-19, and while Canada experienced a surge in Covid cases, after Canadian Thanksgiving and October the impact on our portfolio has remained minimal.
British Columbia, and Ontario are and the early stages of rolling out vaccine connects to retirement homes after having prioritized and sorry. After prioritizing long term care residents and staff and is not yet clear when retirement homes will be receiving vaccines, although at least one of our C&I homes, and Ontario has already had 80%.
And of staff vaccinated.
Ladies and ramped up to nearly double what they were in the fall even without the catalyst and vaccine distribution move ins are increasing to match move outs, which remain driven by death and the need for higher level of care.
We have noted in prior quarters that senior housing rates appear and elastic our operators have consistently maintained rates because it prospective residents decision to move and is being driven by qualitative rather than quantitative factors. They are seeking a change and lifestyle whether out of need or desire, while we speak about pent up demand and high.
Lead volume and the fact is that converting leads to move and is more challenging when potential residents are concerned about the lifestyle day will have when they move in.
Between February 2020, and January 2021, our senior housing managed portfolio inclusive of non stabilized assets lost 10, one percentage points and occupancy.
Occupancy remains the largest variable driving the operating results of our senior housing managed portfolio, but what are results from the fourth quarter point too is that the holiday surge and Covid cases has not had a uniform effect on our managed portfolio.
The largest occupancy occupancy declines were in assisted living particularly in December 2020, and January 2021, lower moving rates during the holidays and higher death rates among more vulnerable residents drove that outcome.
Covid infections that surged and the general community impacted our assisted living communities and the people who work there, resulting and increased labor PPE and related costs, particularly in those months.
While our assisted living operators did receive some government support it was significantly lower and the fourth quarter and didn't offset the simultaneous higher cost and lower revenue experienced in December 2020 cash.
Cash net operating income margins, which are for it and our system versus independent living we're even further compressed.
The first step and reversing this trend is to maximize vaccinations, which is underway both our portfolio as well as broader statistics indicate the residents are eager adopters. If skilled nursing is a reasonable precedent, we have visibility and understanding occupancy losses, Covid cases should decline within a month falling fault.
Owing the vaccine clinics and in fact, we have shared that we are seeing a steep decline and cases with fewer cases will come fewer move outs.
Again, something we have discussed which will begin to return to pre pandemic levels and extend length of stay.
Achieving high vaccine adoption rate among staff will help reduce labor costs, which spiked during outbreak during an outbreak. These along with normalized PPE expenditures will help stabilize expenses and support net operating income.
Rebuilding occupancy will take more time it requires converting leads to leases and convincing potential residents of the value that senior housing brings to their life and <unk>.
Vaccinated population will allow for fewer and fewer restrictions within the community, which will allow restaurants to gradually resumed the lifestyle that brought them to independent or assisted living and the first place operators will now have evidence to show that living and their community is not only enjoyable.
But also say for whether it is in the face of the pandemic or and natural disaster.
I will now turn over the call to Harold Andrews, Sabra as Chief Financial Officer.
Thank you Tanya I'll give an overview of the numbers for Q4, and then provide additional color on our guidance for the first quarter of 2021 for.
For the three months ended December 31, 2020 REIT.
And we recorded total revenues rental revenues and <unk>.
And why of $152 $1 million $110 $7 million and $124 million respectively.
These amounts represent increases from the third quarter, primarily due to a third quarter $14 $3 million write off of straight line rent receivables and above.
Market lease intangibles for Genesis and signature and remove those tumors to a cash basis for revenue recognition. Excluding this write off total revenues declined $5 5 million rental.
<unk> declined for $2 million and <unk>.
<unk> declined $9 6 million in Q4 compared to Q3.
These declines were due to a $3 $7 million decrease and collections related to leases accounted for on a cash basis.
Note that the third quarter of 2020 had a $2 2 million increase over the second quarter and waste collected from cash basis tenants.
And these fluctuations and collections and storm from a handful of cash basis tenants.
And in some phase of transition with stabilization period and pay rent based on cash flow available for payments, which can fluctuate quarter to quarter due to fluctuations and cash flows at the operator level Tim.
10 minutes with this type of arrangement represent just 2% for total revenues during the fourth quarter and we do not see the reduction of cash collections this quarter as a new trend.
Total revenues and NOI were also impacted by a $1 $2 million reduction and revenues from our wholly owned senior housing managed portfolio compared to the third quarter, including a $6 million reduction and government grant income.
NOI was further impacted by the results of the and lighter joint venture, which was lower compared to the third quarter by $4 million, including the reduction and government grant income of two and a half million dollars.
We recognized $1 1 million of government grants income during the fourth quarter.
$6 million related to our wholly owned portfolio was recorded in revenues and <unk> 5 million related to utilize and joint venture that was recorded as part of losses from non consolidated joint venture.
And finally, COVID-19 related costs and our senior housing managed portfolio totaled $3 million for the quarter.
$5 million increase compared to the third quarter, lowering our NOI and the fourth quarter compared to the third quarter.
Of the current quarter expense $2 million related to the and lot of the joint venture while 1 million was incurred in our wholly owned portfolio.
And so both for the quarter was 87 and $5 million normalized.
Normalized basis was $88.
And $4 million or 42 cents per share.
Compared to normal flow of $98 8 million or <unk> 48 per share for the third quarter of 2020.
<unk>, which excludes from multiple and certain noncash revenues and expenses was $87 2 million normalized.
Normalized basis was $86 9 million or <unk> 41 per share.
Compares to normalized <unk> of $95 1 million or <unk> 46 per share and the third quarter of 2020. These.
These declines and normalized <unk> and normalized <unk> for primarily relates to reduction in Hawaii from.
And from $9 $6 million previously discussed.
For the quarter, we recorded net income attributable to common stockholders of $37 $1 million for 18 per share.
G&A costs for the quarter totaled $8 1 million compared to $7 $2 million and the third quarter. Two day costs included $2 $3 million and stock based compensation expense for the quarter compared to just $9 million and the third quarter. This increase was due to updating our performance based vesting assumptions are managed.
Equity compensation, and the third quarter, which resulted in lower expense in that quarter.
Current cash G&A cost of $5 $8 million were four 7% of NOI for the quarter in line with our expectations.
To have a strong liquidity position as of December 31, 2000, $21 billion of cash and availability on our line. This puts us in an excellent position to take advantage of acquisition opportunities that present in 2021 and beyond.
As we have consistently reported maintaining our target leverage of below five five times continues to be a key priority for us.
And we're very pleased to see that the recent changes.
And our Fitch rating going from a negative outlook to stable as well as the reaffirmation of our ratings and S&P.
Maintain and Leverages a critical component of our current ratings we.
We have continued to manage this through the pandemic.
Declines and royalties on net.
And this portfolio during 2020.
Net and we issued three 6 million shares.
And of common stock under our ATM program during the quarter and an average price of $16 and <unk>.
Per share generating gross proceeds of $16 1 million for $4 $9 million of commissions. Additionally, we utilized the forward feature of the ATM program and preparation for fund certain upcoming investments.
And $1 1 million shares and initial weighted average price of $17 and 44 net of commissions remained outstanding under the forward sale agreements are.
Our leverage remains below our targeted for eight eight times, excluding the JV debt and increased slightly to 549 times from five four times, including our share of joint.
Joins the true debt.
At the end of 2020, we have $235 million available under the ATM program.
And we were in compliance with all of our debt covenants as of the end of the year and continue to have strong credit metrics as follows our interest coverage was five <unk> times fixed charge coverage 514 times total debt to asset value of 35% and unencumbered asset value unsecured debt, 282% secured debt to asset value.
Just 1%.
February 2021, the company's board of directors declared a quarterly cash dividend of <unk> 36 per share.
Dividend will be paid on February 26, and common stock was a record as of February 12.
The dividend represents a payout of approximately 71% of our ASF, though.
73% of our normalized <unk> per share.
And now for a couple of comments on Q1 2021 guidance as noted in our press release issued yesterday.
Natural effects. The COVID-19 pandemic has made it more difficult accurately forecast for future earnings primarily within our senior housing managed portfolio. As a result, we have limited our guidance for the first quarter of 2021.
We expect the following amounts per diluted common share for the <unk>.
<unk> ended March 31, 2021 net.
Net income 16 to 17 cents <unk> 39 to <unk> 40.
And <unk> 30 to 39 cents.
With those estimates are based on certain key assumptions spelled out in our supplemental I would like to bring attention to just a few.
And the estimates above do not include any anticipated fronts from the provider relief fund for our senior housing managed communities.
Expect to receive some meaningful amounts with Disney and the amount and timing is very difficult.
As we've seen continued pressure and the early part of the first quarter, we expect our senior housing and managed portfolio average quarterly occupancy to fall within the following ranges wholly owned 75, 4% to 77, 4% and you can for.
All other joint venture, 66% to 68% net.
Expect to close.
<unk> totaled $39 million with them.
The average initial cash yield of eight 2%.
We anticipate funding investments using the revolver along with match funding the equity component.
GM program.
And the aggregate.
The issue approximately $100 million of equity under our ATM program to fund acquisitions, and our goals of maintaining leverage and five five times, which would include the non consolidated joint venture.
Just on expected annualized adjusted EBITDA of approximately $480 million as of March 31, 2020.
Finally, I would like to point out that our calculation of net debt.
Annualized adjusted EBITDA is based on a trailing 12 months adjusted EBITDA.
March 2021 will be for 12 months impacted by the pandemic.
This is important to our management of leverage because each quarter as each quarter passes since the start of the pandemic, we are dropping off a quarter of higher pre pandemic EBITDA generated by our managed portfolio and replacing it with a significantly reduced EBITDA that has been negatively impacted by the pandemic.
Where does it keep our net debt to annualized adjusted EBITDA below our target of five five times, we expect to issue additional equity during the first quarter of 2021 to again account for the lower trailing 12 month adjusted EBITDA, We expect and we ended the quarter.
To summarize this impact.
I've had on our equity issuance based on our Q1 2021 guidance, we will issue approximately $150 million of equity since the beginning of the pandemic to offset the loss of EBITDA from our managed portfolio as compared to the trailing month adjusted EBITDA, one year earlier or as of March 31.
2020.
However on a very positive note, while we move through the trough and occupancy and begin to rebound the expected increase in EBITDA from our managed portfolio will begin to naturally further delever the company and provide us with even stronger balance sheet and the potential for outsized growth and earnings per share as we continued demand.
Leverage.
And the fashion going forward from there.
With that I will open it up to Q&A.
And as a reminder to ask a question.
And as a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key please standby, while we compile the Q&A roster.
Our first question comes from Josh <unk> with Scotiabank. Your line is open.
Hey, Thanks, So could you provide some more insight into the current acquisition pipeline and what investment opportunities Sabra seats today.
Just looking at Q1 guidance. It looks like you guys are going to raise over $100 million from the ATM program had some availability under a lot of credit and 40 now and will be used for investments. So is that remaining capital being raised and just meant to delever and and kind of keep leverage levels, where you want them.
Yes, most of the raise is too.
And maintain our balance sheet, we wanted to be but it also pre funds and potential acquisitions as well so.
You have to think of it sort of and both ways.
And if there is an opportunity now.
And we raise money on the ATM.
And that's going to keep our leverage down and give us room for leverage to go up slightly and still book, even though our target as we match for the acquisitions.
And probably if you wanted to note some of the specific cards and things, we're looking at and the pipeline.
Sure. We're looking at senior housing assets that we can buy at reasonable prices and at this time.
Spoken in the past about.
And the population of of assets out there that have been.
<unk> had their lease up.
Yes.
Projections.
Delayed if you will because of Covid and so theres an opportunity to acquire newer assets.
That have some upside to them and so that's that's a lot of what we're seeing because <unk>.
And the need liquidity at various time for various reasons.
So we're seeing that kind of opportunity where as Rick said earlier, we're seeing other opportunities in other sectors, as well, including behavioral and a little bit and skilled nursing.
Got it Thats helpful. And then how are you guys, comparing the and live and JV buying up the other portion compared to just traditional acquisitions I know it looked like that portfolio had some more occupancy challenges and Q4 and you guys are also factoring in some more occupancy loss in Q1 versus the whole.
And the owned portfolio. So how are you guys underwriting that occupancy NOI recovery and comparing that with other acquisition opportunities.
Yes, so one really has nothing to do with the other were already and the JV. So that's just going to be and negotiation with TPG and as I mentioned in my opening remarks, it could have to be something that works for us economically.
We're not going to do a deal just to do it.
And that's going to be dilutive to our earnings so.
Just to conclude and separate things and how we look at others moving.
That portfolio really well and we have a lot of confidence the team.
And everything that they have and placement infrastructure perspective to rebound and what's been unfortunate for them is unlike all of our other operators.
You really have a national footprint and so the surgery. So that they just couldnt catch a break every time you have water area.
Sure and getting a little bit better there and another geographic area and over half their states credit with given the restrictions the cohort restrictions either so.
And separate thing how would you look at when we look at the individual.
Senior housing opportunities that we're currently looking at that we just look at where they're at.
With the current NOI is what.
And with their lease up looks like and we.
We underwrite everything.
And should neutral basis, and then we just see for works.
Okay.
Great. Thank you.
Yes.
Thank you. Our next question comes from Juan Sanabria with BMO capital markets. Your line is open.
Hi, good morning, and thanks for the time.
Just hoping you could talk a little bit Rick about.
The occupancy recovery, both in skilled nursing and seniors housing and.
Seem to acquire and maybe a longer recovery and seniors housing.
And so the TPG has taken at least.
Seem to be a little bit more optimistic about skilled nursing, but if you could just give us some some benchmarks and how long do you think you can get back to pre COVID-19 levels for those two major food groups that did growth yes.
Yes. So my thinking has been that the first quarter of 'twenty to be back on skilled nursing tool were pre COVID-19 or pretty close close enough that you feel comfortable.
Get there and I think it's probably not before the middle of 'twenty two.
Yeah.
Sure.
From the senior housing piece.
And obviously, you can take a little bit longer.
Particularly with the and live and portfolio because what happens during the surge, but their pent up demand is still there pent up demand.
Well a lot of the same dynamics.
Health the skilled space should help senior.
Senior housing space, including the lives and as well with easing of restrictions for the isolation protocols and such.
And being able to have a real tours and group activities and and all those kinds of things so.
And just thinking it'll take longer if you've got on the skilled side.
And intensely need based and we also expect debt as occupancy picks up it will be shippers and they would've otherwise been because we've had a delay going into hospitals first.
And that goes to senior housing senior housing as well.
But hey, health and certainly the operators that we have.
And their acuity ticked up pretty dramatically over the past several years, so much more needs based models and they never did which is why we have confidence and it's good.
And then rebound.
Just going to take time and I'd also point out COVID-19.
Talked about this before we think the safety factor for senior housing is going to be a big deciding factor in terms of admissions coming back in.
And that wed like to see.
And the case of a couple of our tenants just by way of example, and.
And holiday.
And.
And incredible job from a safety perspective and license infection rate is 2%.
Cohort and assisted living is 4% to 7% and then.
Living which you would expect to be lower because they are healthier for us of 1% and holidays. So I think those statistics are going to be really critical from a marketing perspective and help those portfolios to recur.
Is that from here, what's real quick followers.
Thank you Rick maybe just a quick modeling question for Harold or cash.
Cash rent payments from those few tenants.
On a cash basis.
What's the assumption and the first quarter guidance relative to the fourth quarter payment.
Yes, it should be pretty consistent with fourth quarter for for Vas.
The vast majority of our cash flow I'd say all of them, but one or two and I'm actually expecting an uptick and.
And collections and the first quarter over the fourth quarter.
For those two so my expectations would be slightly up not dramatically, but slightly up over the fourth quarter.
And maybe just one last one for Rick Whats the view on these dual capacity rooms, you referenced and skilled nursing and coming back and.
And any hesitancy by the regulators or whatnot.
Do away with those given some of the lessons learned from the pandemic.
No I think well.
A couple of minutes a day.
In terms of import and making one there is a difference between the semi private rooms, and the awards that have free bets and for.
And for birds eye.
I think over time, you're going to see.
Wanted to see what.
They're going to want to see those go away.
And that's actually already happened and Massachusetts, So I think we'll see that elsewhere as well and.
<unk> will be corresponding reimbursement changes as well to go and all of those sales as the operator and continue through and a viable business in terms of.
What's happened and so that's sort of something to think about and look forward to going forward, which is also going to exacerbate. The access issue that we're starting to see and different markets before the pandemic and industry was projected to be essentially full.
Somewhere around the middle of the decade so.
So thats going to exacerbate that problem, but in terms of what's happening today and the pandemic.
No I think that.
The vaccine changed everything in terms of the concern and regulators had about easing restrictions. So and I also think it's fair to say that when you Steven.
The numbers in terms of cases and mortality dropping so dramatically so quickly.
You pointed out.
And vaccine, but its more than the vaccine.
And we still have a lot of patients that's true.
And skilled nursing facilities and the Medicaid for long periods of time, we think about short stay for the Medicare.
But we've got a lot of longer term patients and there and a lot of the patients and residents and these two.
So and as both skilled and senior housing.
Have.
Already had COVID-19, who are aware of it.
Or they've had and were unaware of it because there was total testing for for the first number of months, Mr. Rob and the testing as far as the antibody testing and facilities.
So the buildup of those ore bodies with the existing population combined with the vaccine I think is why we saw such a dramatic improvement and cases of mortality dropping okay deposits. Just the vaccine was it happened very quickly and there are conversations ongoing more specifically to your point with.
With CDC about.
Not having national guidelines for restrictions easing.
A certain percentage of the population has been vaccinated for their peer discussions so that hopefully it can be.
Addressed and a more uniform basis, because right now as you can imagine it's quite different from state to state and even within states different regulatory localities.
Thanks, Rick.
Thank you. Our next question comes from Nick Joseph with Citi. Your line is open.
Thanks, and just wondering what the timing is on a decision in terms of and ligand at least current expectations for any timing.
I'm guessing here, a little bit because TPG.
It's really driving driving the process.
If I was going to guess I would say.
And we arrive at a decision and the next several months.
And then.
In terms of closing the deal whether youre out or you're in it's usually.
80 day period, because of all the regulatory approvals.
Thanks for that.
About more broadly I guess price pricing for senior housing and particularly like a national portfolio like that how do you think about it versus pre COVID-19 values.
Well.
And we all know how <unk> driven pricing over the past few years, but I think for us.
And certainly if youre going to buy something before its recovered.
It's got to have a much higher yield.
Six handles and everybody got used to.
So I think for us it's going to be a very.
Specific exercise.
And looking at their current NOI.
Being as conservative conservative as possible in terms of recovery and there may be some other mechanisms that can be built into a transaction that gives the portfolio more time to recover without us being out of pocket, but I don't want to get ahead of myself here, because those and negotiations that we have to.
And with TPG.
Thank you.
Thank you. Our next question comes from Rich Anderson with <unk>. Your line is open thanks.
So on and.
And.
And how binaries is the decision is it in or out or is there a rainbow of.
Opportunities within being and are completely out could it involve third parties whats on the table or is it pretty straightforward.
Alright.
Yes.
Sure Rich I would say.
And the decisions being made to do something it's pretty binary between buy or not volume.
That's not to say that you couldnt structure a deal.
And provided some level of earn out or some other mechanism.
Bridge the gap, if you will between where NOI is today and where NOI is expected to be in the future.
All of those things and kind of on the table, who knows where it might land and I don't think that there's an opportunity for more perspective too.
Bring it on other investor.
Alongside Us and I also think that it's just going to come down to TPG.
Good day.
Require for it.
We're not and that's.
US for somebody else to be.
And how we can structure for Bruce picking up and something we'll be working on.
And with them.
Okay, and then when you compare the occupancy level of the JV, which is.
Not more than the 11 of wholly owned assets.
Is there any reason why there shouldnt ultimately be a full recovery and or the 11 assets that you own and a wholly owned basis.
For the outlier positive assets and net real occupancy number kind of steady state for the for the JV is something below those 11.
Paul you and take that.
Sure.
So it's a couple of things I'd start with Big picture.
And 11 wholly owned or and a very small geographic area or other kind of Pennsylvania, Delaware.
And so that already changes the profile versus and a portfolio of 158 that our spread from east coast to and.
All across the country to the West coast. So that's the first thing. The second thing is there is much more memory care and the wholly owned and there is and the joint venture and that also effect and it will it affected COVID-19 spread within the buildings and.
Because I am sure others have spoken at greater length, and we have about memory care and and how how it's much harder to manage COVID-19 spread and memory care.
But also people far fewer people are moving out Jeff just cause of the lifestyle.
On a memory care, so that also changed changed buys.
Given that the 11 wholly owned have performed.
Etc high level in terms of occupancy 90, plus in fact, we even had 95% occupancy.
Several quarters ago.
And I expect that that rebound will I think that I think that 90 ish area is probably going to be where it heads back because the loss was quite specific and quite specific and timeframe.
I think that the joint venture.
There is.
I think it is just different and it's going to be a balance of the local markets and the environment and.
What's happening with respect to Covid, and vaccines et cetera, and the competitive landscape and those areas across the country.
Okay.
Really it's a matter of time, Richard it's not a matter of and result, we don't see any reason for Eric.
The JV is not going to be back to where it was okay. And then quick for you how old the $100 million of equity for the first quarter.
And I am getting like a and imply cap rate and your stock around eight ish or so.
And I see you're comfortable with that and the interest of deleveraging but.
Are you kind of be kind of quick to get into that ATM.
To capture that pricing and take the risk off the table what happens if god forbid some disruption of the stock and.
You have to.
Rethink the equity raised component of the story for first quarter, yes.
Yes.
And we'll get into it when it makes sense for us, but I would point out risk and it is our interest to do that but we do have cushion we've got Christian.
Leverage metrics, so while we'd like to get it done and keep it right, where we're at and for a little bit behind on that it's going to be a big part of it would be a big deal relative to our ratings with Fitch.
And S&P, but we're going to we're going to get in there and do it as quickly as we care, but also keep in mind that we're going to monitor the performance of the managed portfolio because performance starts to pick up and we can see a pathway to improved EBITDA more quickly than we might be 50 today and we can we can temper that is.
Well, Okay, that's perfect thanks, and thanks, everyone.
Thanks Rich.
Our next question is from Stephen is that liquid with Barclays. Your line is open.
Great. Thanks, and Hello, everyone and maybe just a question here for Rick just on Covid and the skilled nursing setting.
So you guys did mention the dramatic drop and Covid patients and sniff and early 'twenty, one and that generally should be net positive and the big picture.
And I'm curious if you can provide a little bit more qualitative color just around the notion that some snafus actually do want to treat COVID-19 patients and the sniff setting maybe.
Maybe just to help us frame this better quantitatively as well.
And just roughly what percent of the sniffs and your portfolio are.
And we seek and to treat COVID-19 patients, presumably in a post acute basis versus what percentage of the steps really want and nothing to do with COVID-19 patients at all and are either isolating or a discharge and these patients to other care settings.
And so it's a it's a relatively small percentage that are actively pursuing COVID-19 patients and <unk>.
Trying to set up units and things like that.
It's definitely not higher than 20%.
But I would say we have.
Very few operators that just weren't and nothing to do with it.
So the majority are comfortable with taking care of Covid patients. It's just that it's only a small percentage of those folks that are.
We working with hospital partners and a lot of that was also driven by the hospitals in particular markets seeking out actively seeking out partners.
And but hopefully that's not a long piece.
Thanks for the business and.
For for operators to do that on a longer term basis, just under the assumption that you may always have a little bit of this.
And from time to time, it's going to just depend on facilities configuration and not prevent them from hitting the overall occupancy growth because of the isolation requirements.
Okay.
And that's definitely helpful. Appreciate the extra color. Thanks.
Yes.
Thank you. Our next question comes from Lukas <unk> with Green Street. Your line is open.
Thanks.
Curious on the acquisition pipeline are those concentrated in any markets or are they kind of distributed.
And they're all over the course.
Okay.
And then the coverage metrics on page five of your stuff I know the unstable is since they're not in there and I'm. Just curious do you have a rough number of percentage of total NOI or range, that's not reflected in those coverage metrics.
Yes.
It's less than 10%.
Non stabilized.
And then excluded from those figures.
Okay.
And then last one for me is the specialty hospitals looks like occupancy has taken a nice uptick over the last few quarters is there anything kind of COVID-19 related driving that or is it just.
Unique issues at the properties and just curious what's driving that.
There's really there's nothing COVID-19 driving share.
Relatively unaffected by Covid.
Have very dynamic populations.
We've seen a lot of fluctuation.
And up and down.
With those assets a little bit different and.
We've got the behavioral assets and there we've got.
Children's hospital and they're in.
So there's a couple of different things, but.
But a lot of it's driven by the behavioral facilities. So it's just it's just the dynamic population.
Unaffected so.
Great. That's it for me thank you.
Thank you. Our next question comes from Joshua <unk> with Bank of America. Your line is open.
Yeah, Hey, guys.
Rick just curious on that.
Alive and JV have you guys considered maybe selling your stake when TPG kind of looks to exit.
Is that something you've thought of.
I can take part of it they have drag along rights with us and so they have more control over.
So we've looked at obviously selling our interest before but I, just don't see that as being a potential outcome here.
Okay.
And Josh you may not recall, but.
And it seems like a decade ago now started in the summer early fall of 2019, we took a look at other potential JV partners.
<unk>.
TPG and really nothing really came of that.
So we thought about it and actually pursued and awhile back.
Okay. So you've thought about selling your stake and the path and just.
It hasn't worked.
And I wasn't sure because it does seem like on the shop side like there is pretty good pricing and maybe where you guys and trading it.
All right and maybe potentially accretive.
But.
Okay.
And we're right that they have you just can't see somebody.
Our interest and then how we TPG sells about and not being able to share.
Yes.
Oh well.
I thought I thought maybe it'd be easier and if someone could take the whole the whole portfolio right.
Yes.
Instead of just like someone get and TPG stake.
Well, it's a problem is it isn't just a matter of the whole portfolio because TPG has the management company as well and a lot of the.
Parties that you would expect to come to the table for.
For our new JV weren't necessarily interested in op growth.
And so.
And just complicated.
Okay. Okay.
And then I wanted to follow up on from your comments earlier about the recovery to pre COVID-19 occupancy levels.
And what was your I'm, sorry, if I missed it what was your expectation for kind of a trough on senior housing occupancy.
Not so much the level, but I guess timing.
I'm just trying to get a sense of like how quickly the recovery comes after that trough to get the kind of the pre COVID-19 levels.
And that you thought they would get to.
I think we're close to bottom on senior housing now primarily because of the debt because axiom rollout so.
I think going into March.
And we pretty much should be a bottom and maybe you just for.
And with what we've seen on the skilled side we've.
We have had some period of time.
Where we just sort of stay flat before we started picking up.
And so maybe things are relatively flat and the month of March and in April and we start to see some pickup from obviously im guessing and I guess, it's no better or worse than anybody elses, because that's kind of what it feels like.
Right now because we do think that the.
Impact for the vaccine rollout.
And our senior housing excluding independent living.
Sure.
Follow somewhat the same pattern that we're seeing other skill price.
Okay. Okay, and then do you have.
And just kind of a steady march higher or do you kind of feel like it.
Big surge and the summer and then.
And the seasonal dynamic.
I think it for I think it's more of a steady March I think skilled.
<unk> picks up a little bit more quickly.
Skilled dropped more than senior housing as well.
<unk> I think picks up more quickly just because of the nature of the individuals that get admitted and for skilled facilities and so many of them are and worse shape now because of the delays. So I think for that reason and you've got and even though you've got a needs based model and assisted living.
There is some.
Choice, there still as well depending on.
For the operator is and how high the acuity is so it's more of a steady March on.
And our senior housing.
Okay I appreciate that thanks, guys.
Thank you and this concludes the question and answer session and I would now like to hand, the call back over to Rick matrix for closing remarks.
Thank you all for joining us today I know it went a little bit long, we'll do our best to.
Sure enough the front and for Q1 as we start moving past. This we just wanted to provide as much detail as possible and I appreciate everybody hanging in there and we're available to have some offline conversations if there were some additional follow up questions for modeling or anything else that you all have in your mind.
Have a great day, thanks very much.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
And now.
And once you net.
Okay.
And then.
And when you're all by ourselves.
And <unk>.
One day.
And when that debt.
And you can be a and b.
And <unk>.
And I think it's true.
And to maintain.
And good industry.
Bad debt.
For years.
Yes.
Yes, no and then.
And again.
And now in Spain.
Yes.
Net.
And clearly.
But I think Richard.
GAAP.
Volume.
Yeah.
No debt.
And you see.
And.
Thank you Doug.
The margin.
[music].