Q1 2021 LTC Properties Inc Earnings Call
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Good morning, and welcome.
LTC properties first quarter analyst and Investor call.
Participants instantly and listen only mode.
Assistance, please signal from Stephens byproduct and as far can you followed by tomorrow.
Today's presentation will be opportunity to ask questions. Please note that this event is being recorded.
And I would like to turn the conference over and Thats, what the social CEO. Please go ahead.
Thank you operator, and welcome to everyone. Joining us today for LTC is 2021 first quarter conference call with me on the call are Pam Kessler, and co President and Chief Financial Officer and.
Clinton mainland co President and Chief investment Officer.
For the last year I started our call by offering thanks, and gratitude to our operators from <unk>.
All they have done to keep their patients residents and staff face today is no different now.
However for the first time and a long while I am cautiously optimistic and some of the more daunting challenges presented by the pandemic and the many many lives lost are mostly behind us and that we have entered the recovery stage.
With the high percentages of vaccinations and administered to the senior population.
Nursing centers and assisted living memory care communities should begin welcoming new patients and residents and increasing frequency from the lower levels that we've seen over the last 12 months, we don't know with any certainty when census numbers will return to pre pandemic levels, but.
Total evidence from some of our operating partners is encouraging.
As in 2020, some of our operators have needed rent deferrals and abatements.
First quarter rent and mortgage interest income collections were 86.5%, excluding the first quarter reduced 2021 rent Escalations. We provided two eligible operators in the form of rent credits and credits were provided to give eligible operators and <unk>.
Additional working capital during the first quarter of 2021.
And are expected to have and approximate.
$530000 impact on our 2021 GAAP revenue.
And and approximately $1 3 million dollar impact on our 2021 and fad.
Approximately $292001 2 million, respectively was recognized during the first quarter.
We expect to recognize a decrease of approximately 170000, and 133000 and GAAP and bad revenue, respectively, and the second quarter and a much smaller amount and this last six months of 2021.
Currently we don't anticipate providing additional across the board relief, but we'll continue to review relief requests if any on a case by case basis, keeping in mind, the operators ongoing operations and rent coverage and corporate financial health and liquidity.
And we will discuss the specifics of current rent deferrals and abatements a bit later.
One additional way we helped our operators through the pandemic is by providing attractive financing to our operators through our smart design program.
Program create safer physical environments for our residents family and staff by utilizing state of the art infection control protocols, including air filtration and bipolar ionization UV sanitation devices custom divider and touchless equipment, we have.
And working in partnership with Avenue development to assist our operators with turnkey and customizable retrofitting options.
To date Smart design is being implemented and 13 of our communities.
Next I'll talk briefly about senior lifestyle, we are making progress and transitioning this portfolio with several of the transactions expected to close and the second and third quarters.
As we disclosed in a recent 8-K filing senior lifestyle has not paid rent in 2021.
Clint will provide details on this portfolio shortly.
Regarding an update on senior care centers I'll refer you to the same 8-K, which was filed with the SEC on April 19th.
Although the M&A market has not changed much since we last spoke and we do not believe that LTC will engage in any large transactions in the immediate future.
Deal flow has picked up meaningfully.
Over the last month in particular, we've seen a healthy uptick and inbound inquiries regarding preferred equity and mezzanine financing.
We are performing due diligence on a host of these opportunities, which we believe have reduced risk profiles and strong returns, especially for development projects, whose success is not dependent on immediate lease up for current census.
With respect to more traditional acquisitions. However, we are seeing more and more potential investments where pricing does not accurately represent what we see as the current value of the underlying properties we have the.
The ability to act quickly and investment opportunities as they arise and if they are accretive and provide value to LTC and our shareholders.
I believe that LTC remains well positioned and an industry that despite the pandemic has strong long term fundamentals, which point to an increasing need for senior housing and care solutions.
We are starting to see some stability and our operators. However, it is too early to predict the timing of a full recovery.
In light of the matters discussed above and together with the uncertainty regarding the senior care bankruptcy, we do not plan to provide guidance again until occupancy and census increases gain additional traction.
It has been our board's practice to support a dividend payout ratio of approximately 80% of fad.
As a result of the financial support we are providing some of our operators and the significant lease defaults of senior lifestyle and senior care, our 2021 dividend payout ratio will likely exceed the 80% target.
However, we see our 2022 fab recovery as we are able to totally transitioned the senior lifestyle portfolio to more stable operators and the issues involving LTC and the senior care bankruptcy are resolved.
Before turning the call over to Pam I'd like to recognize our newest board member Cornelia Cheng.
Her addition brings to 50% the number of LTC directors, who are women.
Helium will be instrumental as we further develop our diversity and ESG initiatives.
With that please go ahead Pam. Thank you Wendy total revenue declined $6 1 million compared with last year's first quarter impacting our results with the decreased rental revenue related to non payment of lease obligations by senior lifestyle, partially offset by rent received from 11 properties from this portfolio that were true.
Dish and Reis.
Our results were further impacted by abated and deferred rent granted in the quarter, a reduction and property tax revenue and a one time, 50% reduction of 2021 rent and interest escalation to provide eligible operators with additional working capital in recognition of increased costs due to COVID-19. Additionally.
Additionally, we wrote off straight line rent receivable related to the transition of and operators lease to cash basis accounting. The decrease was partially offset by rent from acquisitions and completed development projects and higher rent payments from anthem.
Interest expense decreased by 738000 due to lower interest rates under our line of credit and the 2021 first quarter, partially offset by lower capitalized interest.
During the 2021 first quarter, we sold a closed assisted living community and Florida and recognized a loss of 861000 <unk>.
Comparatively during the first quarter of 2020, we sold 21 skilled nursing properties and recognized a total gain on sale of $43 9 million.
As a result of the items discussed net income available to common shareholders for the first quarter of 2021 decreased by $49 7 million, primarily due to a gain on sale and the prior year period and the revenue declines already discussed this was partially offset by lower interest expense NAREIT.
NAREIT <unk> per fully diluted share decreased 12.
262 cents and the 2021 first quarter compared with 74 cents and the 2020 first quarter.
Excluding the straight line rent receivable write off <unk> <unk> per fully diluted share was <unk> 64 cents this quarter compared to 74 cents last year. During the first quarter of 2021, we received $1 6 million related to the payoff of a mezzanine loan and 936000 and related to the payoff of a note receivable.
Additionally, we borrowed $17 million under our unsecured revolving line of credit at one three per cent.
Moving onto our investment activity.
During the 2021 first quarter, we invested the remaining $8 million of our $13 million preferred equity commitment to develop a 267 unit independent living and assisted living community and Vancouver, Washington.
The preferred equity investment earns and initial cash rate of 8% and a 12% IRR and is accounted for as and unconsolidated joint venture.
We also funded $1 million and capital improvement projects and properties, we own and 158000 under existing mortgage loans.
Have a remaining commitment under a mortgage loan of $1 6 million related to the expansion and renovation on one property.
We also paid $7 million and regularly scheduled principal payments under our senior unsecured notes and paid $22 $4 million and common dividends.
Subsequent to the end of the first quarter, we repaid $5 million under our unsecured line of credit, including this repayment, we have $8 2 million and cash $498 1 million available under our line of credit.
Under which $101 $9 million outstanding and $200 million under our ATM program, providing LTC with liquidity of $706 3 million. As a reminder, we have no significant long term debt maturities over the next five years.
At the end of the 2021 first quarter, our credit metrics remained strong with net debt to annualized adjusted EBITDA for real estate of five one times and annualized adjusted fixed charge coverage ratio of four six times and a debt to enterprise value of 28, 6%.
Next I'll touch on rent deferrals and abatements as Wendy mentioned, we collected 86, 5% of first quarter rent and mortgage interest income excluding the 50% reduction of the 2021 rent and interest escalation provided two eligible operators and the form of rent credits and the first quarter, which reduced cash revenue by.
And $1 2 million and GAAP revenue by 292000 and.
Additionally, during the quarter, we provided $1 1 million and rent deferrals net of repayments and 600000 and rent abatements as Wendy mentioned senior lifestyle has not paid us rent, thus far in 2020, one, but we did receive rent from the operators to whom we transitioned former senior lifestyle communities to date and.
In April 2021 rent deferrals net of repayments totaled 367000 and rent abatements were 319000. Additionally, we provided 133000 and abated rent in April through a rent credit related to the rent escalation reduction already discussed we also have agreed to provide.
And rent deferrals and abatements of up to 800000 for each of May and June 2021, now I'd like to turn the call over to Clint.
Thanks, Tim.
I'll start my discussion today with an update on our senior lifestyle portfolio after.
After transitioning and 11 of the 23 properties from the first quarter, we transitioned one additional property and April this property, a 48 unit memory care community in Castle Rock, Colorado was transitioned to grateful senior living and operator, new to LTC.
This agreement is for a five year term with a purchase option exercisable. After the first year of the weeks cash rent starting in year two of the leases will be $150000 300000, and your three and escalating by 2% annually thereafter.
There are no 11 buildings remaining in the portfolio.
Of these we expect to re tenant three by the end of the second quarter and one by the end of the third quarter.
Three additional properties and the portfolio or under contract for sale with an expected closing in Q2.
That leaves four remaining buildings.
One was closed and is expected to be sold for an alternative use and the third quarter and we are evaluating options for the remaining three which have a total book value of approximately $3 4 million.
We will provide more details all of these transactions after they have been completed.
Next I'll provide some color and our.
Most recent development projects that are now operational Weatherly court operated by fields senior living and Oregon.
And accepting residents last September.
At March 31 occupancy was 24%.
Up from 23% on February 15, and 10% on October 20 <unk>.
Ignite medical resorts and Blue Springs, located and Missouri begin welcoming patients last October at March 31 occupancy was 64 per cent. The same at February 15th and 23% on October 20 <unk>.
We currently have three properties under development. They are all on schedule and on budget.
Moving now to Brookdale, whose master lease was scheduled for exploration on December 31 2021.
We have recently extended the term by one year now maturing on December 31 2022.
Brookdale first renewal option will begin on January one 2022 and go through April 32022.
Rent terms under the amended master lease did not change.
Last year, we extended a $4 million capital commitment to Brookdale.
Which remains available through December 31, 2021 at a 7% yield.
To date, we have funded $2 1 million of this commitment as a reminder, we only have one other lease that expires. This year. The sniff operated under this lease is under contract for sale with closing expected in the second quarter.
Next I'll discuss our portfolio numbers with the caveat that given the pandemic and the challenging environment. It has created we don't believe coverage is a good indicator of future performance at this time and our focus mainly on occupancy trends, which I will discuss shortly.
Q4, trailing 12 month, EBITDA arm and EBITDAR coverage as reported using a 5% management fee was $1, one three times and <unk> 93 times, respectively for our assisted living portfolio <unk>.
Excluding stimulus funds received by our operators.
Coverage was one times and eight times respectively.
Excluding the senior lifestyle from our assisted living portfolio.
As reported EBITDA arm and EBITDAR coverages would increase to 123 times and 1.02 times respectively.
Excluding both senior lifestyle and stimulus funds EBITDAR and EBITDAR coverages would be 1.12 times and <unk> 91 times respectively.
For our skilled nursing portfolio as reported EBITDA arm and EBITDAR coverage was one nine times and 145 times respectively.
Excluding stimulus funds coverage was 151 times and 1.07 times respectively.
Now for some occupancy trends and which are as of March 31.
For our private pay portfolio occupancy is as of that date, specifically and for our skilled portfolio occupancy is the average for the month because of our partners have given this data to us on a voluntary and expedited basis.
The information we are providing includes approximately 70% of our total private pay units and.
And approximately 91% of our skilled nursing beds.
Private pay occupancy was 71% at December 31, 71% at January 31.
70% at February 28, and.
72% at March 31.
For skilled nursing average monthly occupancy for the same time periods respectively.
67%.
67%.
65% and 65%.
With respect to 2021 growth our pipeline is more active than it's been and some time with opportunities predominantly and private pay and <unk>.
Including and mix of existing operating partners and those new to LTC.
We are pleased to be seeing improved deal flow and we are making and increasing number of bids, but we can't provide specificity with respect to win these deals or what kind of deals will be closed as the market has not yet returned to normal and sales cycles have been elongated.
And as I said last quarter. When we are confident that we can complete deals at the right price for the right return, we will use our liquidity to provide strong regional operators with a gross capital they need.
For now we are focusing on smaller investments with what we believe to be a better risk reward profile, including mezzanine loans and preferred equity financing.
Several of which we have completed throughout the course of the pandemic.
Partnering with regional operators is an important part of our ongoing strategy and we will continue to build relationships with those that have good operating track records and our experts and their local markets and regions with that I will turn the call back to Wendy for her closing remarks.
Thank you Pam and Clint.
And the disruption caused by the pandemic up ended the world and more specifically our industry and resulted in unprecedented unchartered.
And unpredictable operating cycles. However, the pandemic also highlighted the many deep strength within our industry and the people who provide care to those in need of those particular services. There are countless stories of heroism and bravery of which we should all be proud.
As I said at the outset of today's call. We are moving forward with cautious optimism as a result of the ramp up of the vaccine rollout government focus and attention and ending the pandemic and and industry that continues to work steadfastly to stabilized occupancy and <unk>.
Restore consumer confidence.
If we've learned one thing.
It's that we are resilient it is that resiliency that will help us through recovery as we work.
To return to pre pandemic normalcy.
You all know by now that I am very proud of our operators and the LTC team, we have built something to last.
And while we were tested over this last year and continue to be tested our culture of treating operators as partners and maintaining a solid balance sheet will serve us well as we continue to find accretive ways to enhance our portfolio diversify our investments.
And serve as a gross partner of choice.
And now we'll open the call for your questions.
And I'll begin the question answer session to ask a question my personal and wanted to touch Comed zone.
And to the Speakerphone, please pick up your handset before pressing the teams.
With all your question. Please press Star then two.
And we will pause momentarily to assemble the roster.
Gross margin come from.
And Oh.
Please go ahead.
Hi, good morning out there.
I was just hoping we could start a little bit with the senior care. If you could give her a potential range of.
Decreases and.
And the rent for the new tenants.
Sure.
And negotiating with relative to the.
Kind of in place leases or just to get a sense of the quantum of potential.
Decreases and the rental rate.
This is Clint at this point, we're not able to give that information and with the bankruptcy filing and assessing the timing of a transition thats something to it and process and as we get more clarity on that we'll provide updates.
And next quarter, but we're not able to provide that information today.
Can you disclose if there was any letters of credit applied and the first quarter, but it may not be available to pay risks and the second quarter.
Yes, we discussed a letter of credit that we drew down on last quarter, but we did not give the amount.
And we don't have enough data right now.
Okay.
And for switching.
Switching topics to Brookdale.
Can you provide any color as to why they only renewed for a year.
I mean is that okay.
Should we take that as a point of caution maybe that there wasn't a longer extension at this time.
And I don't want to speculate on Brookdale and intentions, but I I led to believe we are similar to last time with the pandemic. They wanted us locking into a 10 year renewal. They wanted to evaluate the current environment and my assumption is the same holds true for this extension.
So I don't have I don't have any speculation or any thoughts beyond that.
Okay and just.
One last quick one for me.
On the Florida disposition and.
NOI that was lost from itself and what were the proceeds.
The proceeds were $1 million was $1 million $1 million and those two and how I'm, sorry, two and half two and half $2 5 million and the proceeds and.
It was in the senior care lease.
So.
Proceeds lost I mean, theyre not paying.
So I'll start it was not and your care knowing she's wrong on that no. It was not and senior care. It was another operator and.
There was no NOI and in 2017, or 2000, and Alright, and then 2019 and 2020 and that 2020, yes, yes, okay, sorry, among the three of US we can get a right answer.
And I'll be referring to and what we discussed that were solid and currently I'm sorry.
Selling one right now out of senior care and.
And that one also has no.
Revenue on it currently okay. Thank you it's been a long year and its Friday morning.
Thank you.
Yes.
Thank you and our next question comes from Jordan Sadler of Keybanc. Please go ahead.
Okay.
Thanks, Good morning, guys.
So I wanted to follow up on senior care did you say did you book a full quarter of rent.
From a crew of full quarter of rent and the first quarter from senior care centers.
Yes, and thereon and cash basis.
So yeah, we drew down on the letter of credit and we booked a full quarter of rent.
Okay. So theres no.
And so essentially the same red and <unk>.
And senior care centers.
Got it.
And then.
The other question on them and now this is super early days, but from what I remember of the process.
We have a short window to reach.
Reject or affirmed and beliefs.
And we come to that point or do you have a line of sight to.
And what day, it will have to accept or reject the lease.
<unk>.
And it will Jordan.
Typically a 60 day period to assume or reject and there can be extensions granted by the court to that date based on certain circumstances, but one thing that differs from this filing as opposed to last time.
And as theirs.
Sub chapter five.
And the provision and chapter 11.
Really it was born out of COVID-19 to expedite a bankruptcy processes. So this is under a sub chapter five which is new.
And destructive Theres, a trustee appointed by the judge to effectively attempt to mediate and resolution between the parties.
But the 60 days is the timeframe allotted to make that election to assume or reject.
Okay, and then just just because.
This is a little bit unusual to us because.
And it's atypical to see the same borrower tenant.
File twice in two years, obviously, extenuating circumstances, and a sense, but.
We kind of get the history, a little bit with you guys.
Is it.
And your understanding and.
But this would.
And given us a chapter 11.
Didn't want to try and protect and hold onto these properties as humanly again.
And so the.
The objective and the motive and <unk>.
11 is to get rid of some other debt.
That's not.
The Lucent and beliefs.
Payments or the rent right, there's like working capital loans or some other debt and place it look to you.
Out from under.
We're not aware I mean, we're not aware of.
Or what their objective is and the filing of what Theyre trying to satisfy so others ambulate on their motivation well we can.
Jordan to the press release, they had mhm.
And I don't know Jordan, if you saw their press release I think it was in May right beginning of May and beginning of May Okay I'm.
And I'm, sorry, beginning April or beginning of April.
Yes.
And thank you.
And I know I know.
And I don't mean to Virginia.
And it's.
Unusual so.
In terms of.
And that's L C.
I know you can't really speak to.
The remaining properties that have not yet transition, but just curious Glenn is the what we're seeing with the property that you did transition so.
Year, one rent and $1 50.
300 and year three 2% there is that.
Good.
Indication.
As a proxy for what might happen with the other leases.
No. This is unique to this one asset in Colorado.
Well it was effectively zero rent in year one.
It's really when we get them and purchase option to make hopefully they can make improvements to occupancy and then be able to purchase a building.
And the second year.
So we think it's likely that our purchase option will be exercised and.
And a 12 to 24 months to purchase the asset that's really the intent behind this some on this asset specifically, it's a small asset 48 units and as I mentioned and my my comments with a 48 unit memory care community.
Okay.
And then lastly, just on <unk>.
CMS and news surrounding <unk>.
And we were a little bit surprised by that and the potential.
Call it a claw back or adjustment.
Hum.
And what are sort of the current expectations. What are you guys thinking.
Might happen as you talk with and.
And the industry groups and some of your partners.
But I don't think it was a it wasn't a surprise to us there's always been the potential for Recalibration I think that's been talked about since the commencement of PDP and.
So that <unk> always assumed earlier was met with Melbourne and do either.
And the table from next year.
And one would think that you can pass the pandemic because there was an abnormal operating environment. So you would think that probably wouldn't have happened.
And after we've had a period of time beyond the pandemic.
Yes, we didn't think they would use 2020 and 2021 as the dataset of which to make a permanent decision that would seem.
Logical.
But they always put that out there that there's going to be a recalibration.
Alright. So these inc. Is the current thinking that this could be implemented.
For fiscal year 2022.
And.
And the ultimate adjustment.
To the right come sort of October <unk> of this year.
And we're not sure when and as far as the actual implementation I mean, it's still evolving as far as the Recalibration and that's something we're going to follow but and I think you would have to get some good.
Recovery returned to normal fee data on which to make that decision and.
No we were not speculating on when that's going to happen and either of our asset classes.
And it's very fair.
Alright, guys. Thank you.
Thank you welcome thanks.
Thank you and our next question from Tayo, Okusanya Mono, Oh, I'm, sorry, who.
Please go ahead.
Hello, well good chart.
Oh, Hi, guys how are you.
Okay. Thank you.
And so I wanted to first talk about just kind of skilled nursing recovery again, because youre kind of talking about ethane.
And see some fines and both asset classes of things stabilizing.
But on the skilled nursing side could you just talk a little bit about.
Recovery.
And with your tenants, what kind of occupancy kind of rebound and kind of being seen since January and.
And and whether that kind of gives you confidence I think again.
And the industry data seems to suggest that.
And I was kind of bouncing back I'd like and a 100 bps a quarter, but I'm not quite sure. If you guys are seeing 100 bps per month, but I'm not sure. If your tenant is seeing that whether they are kind of leading that lagging that and if you could kind of talk about you know.
Just what they are seeing.
Sure I.
And I gave the.
The average monthly Occupancies for the last four months and we have seen that it has hasnt continued to decrease though it we hope and we bought this draft.
And in discussions with operators and some market they are seeing a little bit of an uptick others have been flat so it depends on.
And the market, but positive thing that we're looking at right now hopefully that that decrease has trust.
But it just seems like really different from what the data is kind of set about the industry for the first quarter I guess I'm struggling with why such a big difference.
Hi.
And in January Youre hearing that there was a retail turned to normal discharge patio.
Yeah like the industry data seems to suggest that things trough in January and and kind of February March and kind of sort of hundred bps increase.
Per month, and it just seems like your tenants and kind of see that your portfolio and see that.
And most of our tenants we are still in the middle of the surging in January and February.
Okay, that's fine.
And second question, if you could indulge me.
And we've got the wrong states.
We have a lot of assets and Michigan, and Michigan had a difficult.
And a difficult time from winter, yes, yes, yes.
And then the dividend again I appreciate the commentary you made about around that Wendy I guess my question is what kind of assumptions are you.
Making about recovery and make you feel confident that.
One you don't have to do anything with it and then net to you kind of return back to your target dividend payout by 2022.
Well we are at this this is Pam we're assuming that there is a recovery and that the challenges our industry are facing currently.
And our temporary and.
And that with the green shoots that we're seeing and and the industry that we will return to normal occupancy and.
And with normal margins.
And the asphalt with senior care and senior lifestyle will be transition contributing yet.
Thank you and all by 2020 two so that's like 12 to 18 months out do you think we're going to be at a point and move up kind of back to normal.
Right.
Okay.
Appreciate it. Thank you. Thank you.
Thank you and again if you have a question. Please press Star then one.
Our next question from Michael Carroll RBC capital markets. Please go ahead.
Yes. Thank you I want to talk about the Brookdale I guess renewal and I think when do you said last time, it's just that they execute execute and renewal option. They could get the 50% credit on the rent escalators I guess census, with short or do they still qualify for that credit or is that different now.
Since it's only like a shorter term renewal.
They've got the credit it was a 100 to $133000.
So they got the credit and Mike.
There.
And as Clint said, they're using money too.
Improve the buildings or their census is as good from what we are getting reported.
We thought it was a positive move by Brookdale.
Brookdale.
Analysts take a different view sometimes.
Yes.
No I mean, I guess and redoing for an extra year. During this environment is always good.
And then I guess Pam.
And it's got to the senior Care's letters of credit I guess, what's the uncertainty about how big that is is it just because it is and bankruptcy theres a little bit more uncertainty of what LTC is able to get from that or I guess why is that less known.
You are correct, it's because they're in bankruptcy and we're not providing much comment around that and <unk> result.
Okay.
And then going back to senior lifestyles.
The I guess the timeline of the four planned transitions I know three is going to be and Q2 and one in July.
But I guess why is it taking a longer time as adjusted our licensing and transfer within those specific spaces, the problem or is it and operator thats trying to.
I was waiting for something different or is it I guess can you talk a little bit about that.
I would say licensure, Mike some states are longer than others and.
And then we do have the sale and as I mentioned, our sales cycles and process are a little bit elongated itself.
And those would be the items and the surge delayed some things you couldnt get surveys and things done during that time.
Yes early earlier on that was a little bit of a channel and just getting people into the buildings, but I mean that's.
And we're beyond that at this point, but nothing other than those items.
Okay and then the three assets that were you guys are still analyzing and what to do I guess, what's the status of that is that just youre getting offers line potential abuses and or sales and youre analyzing those or.
Or is it the license transfer I guess, what's the discussions around those assets.
And analyzing the options and we've got a couple that we're working on right now and hopefully next quarter, we'll be available to provide more details regarding the timing of that but again, we provided the net book value just for relevance associated with those those three assets.
Okay, and what's the gross book value on those three assets.
I don't have the gross book in front of me and we can get that information to you, but the net book I think it was more relevant.
Based on where built fourth is probably around six or $7 million mhm, yeah, we do.
Doubled and network I'd say, Mike, Yes, it's probably around $6 million to $7 million.
And because we built them and we built them into 19 nineties.
Okay, great. Thank you.
Thank you thanks, once I close PCC.
And.
And next we have a follow up question.
And I agree all of BMO. Please go ahead.
Thanks for the extra time.
A quick question on the rent received and the first quarter was there any.
Letters of credit applied outside of senior care.
Helped.
From a cash accounting perspective that may not recur in the second quarter.
No there was not.
Okay, and then just following up on I think.
Okay.
And at the end.
Hi, This question.
Did I hear correctly that you expect.
Full recovery.
For seniors and skilled.
And 18 months.
Yes, Dmitry margin perspective, we expect a full recovery yet, but we do not know the timing of that I mean mark.
Our crystal ball is not that sharp right now not that clear.
Okay.
Thank you.
Thank you again.
I have a question. Please press Star then one.
A question and as a follow up from book with Amato.
Please go ahead.
Hi, yes, guys.
And apart from <unk>.
Yeah.
Can you just talk a little bit about again some of these tenants you having a portfolio of that.
And again kind of inherited portfolio of all transition portfolio's occupancy was already kind of week.
Going into the pandemic and has gotten even weaker so when I think about names like anthem named like ignite.
And just talk a little bit about kind of what youre seeing with those tenants and how comfortable you feel.
And with the idea that and if those tenants you may not need additional help just because it kind of starting from a lower occupancy.
Is it kind of effect and get their portfolios together.
But I would say that for for anthem.
We have been working with them for a couple of years now to increase the rent, which we have a comp which we've done over the past couple of years, and we provided them some flexibility, but not not from.
Increasing that rent and too high so they had some flexibility on their cash flow going into two COVID-19. So we've not had to extend any incremental support to anthem beyond that.
For the majority of the other.
Operators that we've helped and provided.
Assistance, it's really been the same set of operators and it really as a result, as Pam mentioned previously on buildings that were and lease up but at this point its the same population.
We've talked about previously.
Okay, great. Thank you. So that's something that has not changed.
Okay. Thank you.
Thank you.
Thank you we have no further questions at this time and I would like to turn the call back over Wendy Simpson for any closing remarks.
Again, thank you very much from the time, you spent paying attention to our company and we look forward to speaking to you next quarter. Thank you.
Conference has now concluded. Thank you for attending today's presentation you may now disconnect.