A REIT is a REIT is a REIT, right?
California-based LTC is a health care REIT (real estate investment trust) of about $2 billion investing in about 180 health care properties, half of which are senior housing properties. And while new co-presidents Pam Kessler and Clint Malin plan to continue the REIT’s mission as a long-term capital provider, they and their colleagues are reimagining the role they can play in helping existing and potential operating partners.
Here are three things senior housing operators should know about the work LTC is doing during these unprecedented times, starting with a new look at an old phrase: “open for business.”
Remaining “open for business”
When the COVID-19 pandemic struck heavily in March, the leaders at LTC began to look more creatively at how they could assist operators, by first looking at their major needs. One of them is something that is not necessarily in the domain of a triple-net REIT — which is why their work in this area with senior housing operators was so vital.
“We remain dedicated to supporting our operators, and early on, that meant helping them source PPE,” Kessler says, referring to the vital personal protective equipment of masks, gloves, gowns and other items that operators suddenly realized were essential for maintaining health and safety within their communities.
Leaders within LTC created a secured portal where all of their operators could collaborate to help each other find the best sources for PPE plus other resources such as staffing solutions, protocols / best practices and links to government assistance information.
“You remember, in those early stages, that was the main critical area where everybody needed help,” Kessler says.
Additionally, LTC collaborated with operating partner Juniper Communities to create Virtual Connections, an online hub for free activities, entertainment and resources, both spiritual and wellness-minded, targeted toward seniors.
LTC’s work in the early portions of the coronavirus pandemic was of that nature: looking not at what a REIT traditionally does, but standing back and looking at the cross-section between their full professional capabilities and the emerging, urgent needs of their operating partners. Sourcing PPE was one such solution. Working with operators that needed deferred rent was another. Advocating for government assistance for both senior housing and skilled nursing facility (SNF) operators was a third.
“We had not gotten that detailed into the advocacy side,” Malin says. “It’s really been more financial support to these organizations and their underlying lobbying efforts, but this was probably one of the first times where we got engaged into corresponding with members of Congress. A lot of letter writing.”
Results have varied. SNF operators have been helped quite a bit by various parts of the CARES Act, while private pay senior housing has been more of a challenge for Congress to determine a payment mechanism.
Differentiation of LTC
Still, as this work has played out, operators have appreciated LTC’s unrelenting support, including in the traditional ways of supporting projects. As COVID-19 throws much of every day life and standard practices into question, LTC is proceeding with caution throughout its normal procedures as a REIT.
Cap rates and operating margins remain a source of uncertainty, for instance, as do occupancy and labor pressure. Prospective senior housing customers have new questions about move-ins. There are a lot of factors in flux.
As a result, the REIT is focusing a bit more than usual on short-term investments. Yet they have not slowed down their workload and their support of existing and potential partners.
“We have capital and will be creative to meet our operating partners’ financing needs,” Kessler says. “And not all capital providers have that same view.”
New co-presidents steering LTC to the future
For Kessler and Malin, 2020 was already going to be a year of change. In May, Kessler, the chief financial officer, and Malin, the chief investment officer, became co-presidents of their long-time REIT. They will retain their respective roles, and Chief Executive Officer Wendy Simpson will continue to lead the way.
But Kessler and Malin will also each bring their unique brand of leadership and deal-making to the table.
“We plan to continue the legacy of LTC’s role as a dedicated capital provider and partner to operators in the health care real estate industry,” Kessler says. “I have a very collaborative approach — and working somewhere for 20 years, if the company didn’t have that same approach, I probably would not still be there. We listen to our operators and try to craft a structure that meets their needs. We don’t seek growth for growth’s sake.”
To learn more about why LTC might be right for you, visit LTCREIT.com.