Article Excerpt:
TWST: We would like to begin with a brief historical sketch of the company and a picture of the things you are doing at the present time.Mr. Hegarty: Our company, Senior Housing Properties Trust, is a real estate investment trust that focuses primarily on investing in the senior living industry, particularly the private pay sector, independent living, assisted living, continuing care retirement communities, and similar type properties. We are actually a spinoff of another publicly traded real estate investment trust called HRPT Properties Trust, and much of our original portfolio came out of HRPT dating back to the late 1980s. As a result, we have a significant amount of experience in this industry and have gone through several cycles of the senior living industry. Today, we find ourselves in a position where we are dedicating all of our resources toward investing in the private pay sector of senior living. There are some very important distinctions about that property type.
TWST: Would you discuss that further?
Mr. Hegarty: Today, we've about $1.6 billion of investments in this
senior living industry, and about 85% of our properties are properties
where the residents are predominantly private pay residents, and the
remaining 15% of our revenues come from two rehabilitation hospitals and
about 60 nursing homes. Now, the nursing home industry is one, which is
predominantly funded by Medicaid and Medicare programs. There was a
significant reduction in the Medicare funding in the late 1999-2000 time
frame, it had a very negative impact on the nursing home industry, and
we believe that that's going to be a constant issue going forward for
the foreseeable future with the two programs being under significant
stress as the demographics increase and the population increases. We
have actually sold off some assets in that sector and have refrained
from investing in that sector. I think that's a very differentiating
characteristic about our company versus our peer group.
Tickers included in this excerpt: SNH
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