LTC property investors shirk SNFs as financial risks

Skilled nursing’s financial challenges under Medicare cutbacks and declining census are prompting some of long-term care’s biggest property owners to consider other investments. Health Care REIT Inc., Toldeo, Ohio, plans to sell off $250 million in SNF properties in addition to the 64 properties it sold in 2012. "In the last couple of years, because of the Medicare cuts, we thought…that [it] would be wiser to reduce that exposure," George Chapman, CEO of Health Care REIT told the Wall Street Journal.

Senior Housing Properties Trust, Newton, Mass., which owns 50 nursing home properties, is having similar thoughts, shifting its business focus from its 48 SNF sites to more lucrative assisted living communities, the WSJ article noted.

Other healthcare real estate companies, including Ventas Inc., Chicago, are not necessarily in sell mode, but aren’t planning to make any new acquitions in the current skilled nursing climate. Ventas plans to hang onto its 300 SNFs, which are managed by Atria or Sunrise, but is focusing its new investments on assisted living sites, the WSJ reported.

Investor analysts blame the skittish skilled nursing property market on Medicare payment reduction nationwide and Medicaid cut-backs in many states.

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