Seniors Housing Weekly Update -- Health Care REITs Making A Comeback

September 17, 2013

 
September 17, 2013. 60 Seconds with Steve Monroe. Health Care REIT stocks hit bottom in the past two to four weeks, and are making a comeback, with Omega Healthcare Investors announcing a large SNF deal.

Health Care REITs Making A Comeback

In last month’s SeniorCare Investor, we warned readers not to count out the REITs quite yet, despite the rise in interest rates and their share price plunge. It looks like the REITs may have hit bottom, at least until the next move by the Federal Reserve. About half the REITs hit bottom on August 19, including the Big Three, while the others hit bottom around September 3. And since that bottom? Health Care REIT, Ventas and HCP are all up about 8%, while the smaller REITs are up 4% to 8%. And contrary to popular belief, having major skilled nursing holdings has not been harmful to a REIT’s valuation. Omega Healthcare, which is as pure a skilled nursing play as you get in the REIT world, is up 8% from its recent low and jumped by 1% on the news of the largest skilled nursing acquisition in almost two years, a $525 million deal for 56 properties. Omega was the winning bidder for the Covenant Dove portfolio at about $95,000 per bed, in a very competitively bid process conducted by Jefferies & Company. More to come? Stay tuned.

 

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