We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Welltower (WELL) Notes Seniors Housing Occupancy Loss in November
Read MoreHide Full Article
In a November business update, Welltower Inc. (WELL - Free Report) noted that its seniors housing operating (SHO) portfolio spot occupancy declined 30 basis points (bps) to 77.7% as of Nov 13, 2020, from 78% as of the October end.
This can be attributed to COVID-19 spreading to its seniors housing facilities and the resultant decline in SHO portfolio move-ins. In fact, as of Nov 13, 57 of the company’s SHO properties had COVID-19 positive cases, higher than 35 buildings as of Oct 23. Moreover, move-ins declined 11.8% for October.
To limit the spread of the virus to the elderly, who are more susceptible to it, many facilities were shut down on the onset of the pandemic. This has resulted in continued occupancy declines. In fact, SHO portfolio occupancy sequentially declined by 150 bps in the third quarter to 78.4%. Subsequent to the third quarter, occupancy continued to decline by additional 40 bps in October.
Taking into account the seasonal flu season and the spike in the COVID-19 cases, we expect the upcoming quarters to remain challenging for seniors housing assets.
In fact, Welltower expects same-store revenues per occupied room (REVPOR) growth at its seniors housing operating properties to be flat in fourth-quarter 2020 as compared to the July-September period. Markedly, the company’s same-store REVPOR witnessed a year-over-year decline of 1% in the third quarter.
Moreover, the company expects total SHO portfolio expenses to increase in fourth-quarter 2020 from the prior quarter. It incurred $17 million of pro-rata pandemic-related property level expenses for its total SHO portfolio during the third quarter.
Such notable occupancy losses and elevated levels of expenses might hinder net operating income in upcoming quarters.
Shares of this Zacks Rank #3 (Hold) have plunged 22.5% over the past year compared with the industry’s decline of 2.7%.
Nonetheless, recently, Pfizer/BioNTech and Moderna have announced 90% and 94.5% efficacy rate, respectively, for their COVID-19 vaccines during clinical trials. Such positive developments might come as a breather for healthcare REITs, including Welltower.
Extra Space Storage Inc’s (EXR - Free Report) Zacks Consensus Estimate for 2020 FFO per share has moved upmarginally to $5.02 over the past week. The company currently carries a Zacks Rank of 2.
City Office REIT, Inc.’s (CIO - Free Report) Zacks Consensus Estimate for 2020 FFO per share has improved 2.6% to $1.17 in a month’s time. The company has a Zacks Rank of 2 at present.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Image: Bigstock
Welltower (WELL) Notes Seniors Housing Occupancy Loss in November
In a November business update, Welltower Inc. (WELL - Free Report) noted that its seniors housing operating (SHO) portfolio spot occupancy declined 30 basis points (bps) to 77.7% as of Nov 13, 2020, from 78% as of the October end.
This can be attributed to COVID-19 spreading to its seniors housing facilities and the resultant decline in SHO portfolio move-ins. In fact, as of Nov 13, 57 of the company’s SHO properties had COVID-19 positive cases, higher than 35 buildings as of Oct 23. Moreover, move-ins declined 11.8% for October.
To limit the spread of the virus to the elderly, who are more susceptible to it, many facilities were shut down on the onset of the pandemic. This has resulted in continued occupancy declines. In fact, SHO portfolio occupancy sequentially declined by 150 bps in the third quarter to 78.4%. Subsequent to the third quarter, occupancy continued to decline by additional 40 bps in October.
Taking into account the seasonal flu season and the spike in the COVID-19 cases, we expect the upcoming quarters to remain challenging for seniors housing assets.
In fact, Welltower expects same-store revenues per occupied room (REVPOR) growth at its seniors housing operating properties to be flat in fourth-quarter 2020 as compared to the July-September period. Markedly, the company’s same-store REVPOR witnessed a year-over-year decline of 1% in the third quarter.
Moreover, the company expects total SHO portfolio expenses to increase in fourth-quarter 2020 from the prior quarter. It incurred $17 million of pro-rata pandemic-related property level expenses for its total SHO portfolio during the third quarter.
Such notable occupancy losses and elevated levels of expenses might hinder net operating income in upcoming quarters.
Shares of this Zacks Rank #3 (Hold) have plunged 22.5% over the past year compared with the industry’s decline of 2.7%.
Nonetheless, recently, Pfizer/BioNTech and Moderna have announced 90% and 94.5% efficacy rate, respectively, for their COVID-19 vaccines during clinical trials. Such positive developments might come as a breather for healthcare REITs, including Welltower.
Stocks to Consider
Alpine Income Property Trust, Inc.’s (PINE - Free Report) funds from operations (FFO) per share estimates for 2020 have been revised upward by 1.7% to $1.21 over the past month. The company carries a Zacks Rank of 2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Extra Space Storage Inc’s (EXR - Free Report) Zacks Consensus Estimate for 2020 FFO per share has moved upmarginally to $5.02 over the past week. The company currently carries a Zacks Rank of 2.
City Office REIT, Inc.’s (CIO - Free Report) Zacks Consensus Estimate for 2020 FFO per share has improved 2.6% to $1.17 in a month’s time. The company has a Zacks Rank of 2 at present.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>