Tag Archives: conserve

Updated: Quality Care Properties Seeks Funding To Conserve Largest Renter, Abandoning REIT Status


HCR ManorCare Falls Behind in Full Rent Payments, Pursues Out-of-Court Restructuring

Quality Care Residence(NYSE: QCP), the new healthcare REIT set up by HCP last year to take the troubled skillled nursing center operator, HCR ManorCare Inc., off its hands, is facing a hard choice.

With HCR ManorCare falling back in rent and doggedly pursuing an out-of-court restructuring, Quality Care Properties is considering taking control of the struggling competent nursing center operator, which is without a doubt its most significant renter.

Nevertheless, as QCP just recently acknowledged, such a relocation might cause it to lose its REIT status

As it pursues its alternatives, Quality Care stated it is looking for a dedication from HRC ManorCare’s loan providers for acquisition financing of approximately $500 million to be used to re-finance HRC’s existing financial obligation and supply operating capital.

Quality Care would promise money and substantially all properties of both skilled nursing
and hospice entities to secure the financing.

Quality Care is searching for a dedication by June 15.

[Editor’s Note: This story was upgraded Friday June 9 with info on financing request.]

Quality Care Characteristic was formed in 2016 when HCP Inc. (NYSE: HCP) spun off HCR ManorCare and other health care-related homes. While releasing itself from ManorCare enabled HCP to concentrate on higher-growth chances in its diversified healthcare real estate portfolio, it saddled Quality Care Characteristics with the prospect of a difficult turn-around circumstance.

Since March 31, Quality Care’s holdings included 257 post?acute/ competent nursing residential or commercial properties, 61 memory care/assisted living properties, one surgical hospital and one medical office complex throughout 29 states. HCR Manor Care leases 292 of the 320 properties, accounting for 94% of QCP’s earnings.

The REIT revealed that HCR ManorCare remains in default of its master lease contract, behind completely lease payments, and HCR’s lending institutions have actually also accelerated loan payments from the Toledo, OH-based nursing center operator.

The operator’s problems are not new to Bethesda, MD-based Quality Care. HCP initiated the spin-off as part of a strategy to boost its portfolio performance, which was being hindered as the more comprehensive knowledgeable nursing facility market continued to experience difficulties from much shorter lengths of stays for homeowners, modifications in Medicare compensation designs that lowered compensation rates, and lower resident counts.

HCR ManorCare’s monetary problems escalated this spring. In April, the company entered into a forbearance agreement with HCR ManorCare agreeing not to pursue “exercise of solutions” readily available to it as an outcome of HCR ManorCare’s default under its master lease and security agreement.

The forbearance arrangement needed, to name a few things, that HCR ManorCare pay $32 million in rent on the very first of April, Might and June of 2017, with as much as $7 countless the quantity got monthly potentially avilable in loans back to HCR ManorCare.

This month, HCR ManorCare only made a $15 million rent payment, less than half its total under the forebearance arrangement, according to a Quality Care filing with the United States Securities & & Exchange Commission.

HCR ManorCare notified Quality Care that its secured lending institutions have actually accelerated their loans which the decreased lease payment “corresponds to the quantity that it thought to be proper to pay at this time in light of the impressive velocity by HCR ManorCare’s secured loan providers, the desire to protect liquidity for its stakeholders, the incurrence of professional charges and other restructuring expenditures and newly provided HCR ManorCare management projections of minimized capital from the QCP-owned properties.”

HCR ManorCare also forecasted a decrease in the future financial efficiency compared to forecasts it made even earlier this year.

Quality Care said it continues to remain in discussions with HCR ManorCare about its lease default and a prospective out-of-court restructuring, saying it “thinks that an out-of-court restructuring will require a considerable decrease in HCR ManorCare’s liabilities, however included it might offer no guarantee that the required agreements among stakeholders would be reached.

On the other hand, QCP stated it is thinking about all alternatives, including taking complete equity ownership of HCR ManorCare.

While Quality Care thinks such a restructuring would allow HCR ManorCare’s to create a sustainable company operation, if it were to occur, it would likewise indicate that QCP would not be able to keep its REIT status.

Owners installing big cash to conserve enclosed shopping malls

With blue-lit booths, nightclub-style music, a streamlined bar and an hourlong wait for a table, the weeks-old Gen Korean BBQ House seems like it belongs in a flashy gambling establishment on the Strip. Music plays outside, and the restaurant is steps from a steakhouse with a $55, 16-ounce rib eye and a brand-new Italian restaurant.

The dining areas are nowhere near the resort passage, though: They’re in rural Henderson’s Galleria at Sunset shopping center, part of a big-money effort by shopping centers to enhance business and, in a lot of cases, stay alive.

“You cannot simply have 5 department stores and 140 retail stores anymore and anticipate to dominate the market,” said Heather FitzGerald, marketing director for Galleria.

Long a staple of American suburbia, enclosed shopping center have for years faced enhanced competitors from online retailers and outdoor, urban-style centers such as Town Square and Tivoli Town. Higher-end confined shopping centers stay healthy and are growing more powerful, experts say, however older, lower-end ones are falling behind.

Las Vegas Valley shopping malls have not been forced to lock up, but some are doing better than others. The Forum Shops at Caesars is an “A++” shopping mall with $1,616 in sales per square foot, and “A++” Fashion Show books $1,185 in sales per square foot, according to research study company Veggie Street Advisors.

At the same time, Meadows Mall at U.S. 95 and Valley View Boulevard is a “B” mall with $390 in sales per square foot, and Boulevard Mall, a once-thriving retail hub a few short miles east of the Strip, is a “C” home with simply $270 in sales per square foot, according to Veggie Street.

Nationwide, when conditions at shopping centers degrade significantly, homes can enter a “death spiral” in which sales depression, shops close and buyers leave due to a thinning selection– all of which trigger even more shops to close and more buyers to go somewhere else.

There “unquestionably” are a lot of shopping malls in America, said Eco-friendly Street experts, who tallied about 1,000. That includes more than 200 lower-quality buildings, which are “the most at risk to close over the next numerous years,” Veggie Street states.

Numerous media reports this year have actually concentrated on the death of American malls, and the website deadmalls.com chronicles their death. However in basic, the dismal outlook is “completely overemphasized,” stated industry analyst Rich Moore, of RBC Capital Markets.

More than other types of real estate, healthy malls get “considerably much better” with greater rents and more stores and buyers, while “bad retail goes away,” Moore stated.

Las Vegas, with its abundance of strip malls and shopping hubs, is the most saturated retail market in the country, according to a report by mail-services and software business Pitney Bowes and publisher Directory site of Major Malls.

– – –

Integrateded the 1960s, Boulevard Shopping mall was hugely popular through the ’70s however ultimately lost its standing with buyers, who ran away for the suburbs and Fashion Show, which opened in 1981.

Southern Nevada developer Roland Sansone bought Boulevard in 2013 for $54.5 million from lenders who listed it at a cost of “finest offer.”

“It was a bargain,” he stated.

Fashion Show and other shopping malls on the Strip are practically completely inhabited, however Boulevard was just 75 percent leased when Sansone bought it. The most noteworthy vacancy was a two-level, roughly 200,000-square-foot department store that had been empty considering that Dillard’s moved out numerous years previously.

In 2013, Sansone introduced what he said would be a $25 million overhaul to update the mall and make Boulevard more of a home entertainment destination with restaurants, a bowling street and a farmers market with a play ground. He stated he wished to restore Boulevard to its previous glory.

Sansone, head of Henderson-based Sansone Cos., stated Boulevard looked “like a prison” when he bought it, with subpar landscaping, lighting and paint, and a backlog of repairs.

The previous owners were undersea, and they invested practically no cash or effort trying to sign more tenants, general supervisor Timo Kuusela stated.

The former Dillard’s shop– which now is being refurbished for John’s Unbelievable Pizza, Goodwill and Sutherland– “looked like a bomb had gone off and people had disappeared,” Sansone said. “It felt eerie to walk into a store (that) had been deserted.”

Sansone stated he still is working to bring more home entertainment alternatives to Boulevard– he remains in talks with a movie-theater group– which he might “make a run” at Meadows, adding, “I like repairing things.”

– – –

On a recent Thursday night, Galleria felt busier than it was. The shopping center, which opened in 1996, is well-lit and has an open feel. Music plays, outlet store and shops look brand-new and welcoming, and the food court has a stylish design.

The 1 million-square-foot shopping mall, owned by Cleveland-based Forest City Enterprises, pulls in more business than Boulevard and Meadows. It’s an “A-” property with 94 percent occupancy and $475 in sales per square foot, according to Environment-friendly Street.

The owners have actually invested millions over the previous couple of years to draw more tenants and consumers, with a heavy focus on dining and on beautifying Galleria’s look. In 2013, the shopping center introduced a $7 million home improvement, the very first considering that it opened. In 2013, it broke ground on a $24 million, 30,000-square-foot expansion that included brand-new dining establishment area, an outdoor plaza and a valet location.

Galleria management eliminated water features and palm trees from inside the shopping mall, developing more area for buyers and events. And they renovated the food court, where sales increased by double digits after the overhaul, FitzGerald stated.

Store sales also are up this year, helped in big part by the enhanced housing market and economy, FitzGerald stated.

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At Meadows, Maude Curry sorts through clothing on the 2nd floor of Dillard’s. The department store has actually been transformed into a clearance center, with the first floor near to consumers.

Curry exists due to the fact that clothes is marked down up to 65 percent, however it’s the first time she has been to Meadows in about a year.

“I don’t like this mall at all,” states the retired person who has actually stayed in Las Vegas since 1988.

Meadows, which opened in 1978, is 97 percent inhabited, according to Green Street– and appears in great shape. It was renovated in 2003, according to its owner, Chicago-based General Growth Characteristics. However strolling around, it looks like a common shopping mall from the ’90s.

It’s likewise short on shoppers. Meadows, at 945,000 square feet, gets busier on weekends, however even then, it’s not loaded, clothing-store worker Esteban Hernandez said.

“It’s quite sluggish,” he stated.

Galleria and Boulevard have put a big concentrate on tempting sit-down restaurants, but Meadows has only a food court.

“I know I would go get a drink after work if there was something right here, absolutely,” Hernandez said.

Janet LaFevre, senior marketing manager for General Growth’s Las Vegas malls, stated at least 6 retailers have actually refurbished, broadened or transferred inside Meadows this year; 3 others opened in the past year; a 10,000-square-foot shoe shop is being constructed; and management is close to making a statement about the Dillard’s building.

She also said Meadows has a new basic manager, Chris White, who brings a breath of fresh air to the mall, which Meadows hosts neighborhood occasions with charities and other groups.

Luring sit-down dining establishments, LaFevre said, is “absolutely one of our wish-list concerns.”

General Growth likewise has Fashion Show, which is getting 22,000 square feet of brand-new restaurant and retail space. LaFevre said the 1.8 million-square-foot shopping center is never ever stagnant and never dull and is among the business’s most vibrant homes.

“You need to be when you’re on the Strip,” she said.

Nonprofit leader: ‘Our team believe this program will conserve lives’.

Favil West assured himself that when he retired, he would return to the neighborhood as much as he could. When the former fighter pilot stopped working for himself and his family, he started working for others. West is co-founder and president of the Foundation Aiding Senior citizens, a not-for-profit company that supplies help to seniors in need.

What has made the Foundation Assisting Seniors successful over the past 13 years?

Favil West
Favil West, co-founder and president of the Foundation Assisting Seniors, poses in the charity's equipment storage warehouse in Sun City Anthem Tuesday, March 10, 2015. The nonprofit organization is dedicated to improving the quality of life for seniors.Launch slideshow “

The dedication by the founders, trustees and volunteers to provide services that allow senior citizens to live and continue to be safe in their homes as long as possible. All of these volunteers get no payment, so we are really grateful for their dedication to giving back to our neighborhood.

What is the HowRU Program?

Over the past several years, in just among our senior communities, more than 35 seniors passed away and went undiscovered for extended amount of times (from 3 days to six weeks.) The HowRU Program provides a check-in system to minimize the threat of seniors in need of instant help being unable to call help. Foundation volunteers call each person who signs up for the program every day at a time (or times) they define. The operator reveals, “This is the HowRU operator, how are you? If you are OKAY, press 1. If you require aid, call 9-1-1.” Then, if there is no response, 15 minutes later on, the call is duplicated. If there is still no response, a call is made to the individual’s very first emergency situation contact. If that is not answered, a call is made to the second emergency situation contact. If there is no response, our display calls 9-1-1. We believe this program will certainly conserve lives in the long run.

You have actually received numerous awards for your help the senior neighborhood. What has been your greatest accomplishment thus far?

Developing the Structure Helping Senior citizens into a practical organization that has provided more than 75,000 senior assists in its 14 years of operation.

Exactly what is the most challenging part of your task?

The Structure Aiding Senior citizens does not pay wages to individuals who help our customers and neighborhood. We count on our volunteer force of more than 100 senior peers to serve our clients. The genuine obstacle is keeping the volunteers inspired.

What has been the most fulfilling part of your job?

Seeing, in genuine time, the appreciation for the help we supply. The grinning faces, the thank-you emails and letters, telephone calls and one-on-one discussions with those we have actually helped are icing on the cake.

What do you do after work?

Play golf, response emails, read, play bridge and go out with good friends.

Describe your management style.

Looking back over my working years, I have actually had to use various designs to match the line of work.

As a developer/general service provider who had my own business, I paid attention to all proposals made by personnel, then made a decision. You may call that the autocratic, dictatorial or reliable design, which I found very effective when running a little corporation.

As a retired airline company pilot and previous union leader, consensus of the crew was the method to have a safe and hassle-free air travel.

As a boxer pilot, I decidinged swiftly and efficiently, no conversation, no feedback– purely dictatorial.

As the president of the Foundation Assisting Elders, I listen thoroughly to all opinions and recommendations, and after that need a vote. Dealing with an all-volunteer group of trustees and associates needs more than consensus; it needs getting a difficult dedication. Depending upon the issue, I might make use of a number of management designs however, in the case of helping volunteers, the style needed is more leadership than management.

Where do you see yourself and your business in 10 years?

Being reasonable, at my age, One Decade is a very long time. But I do anticipate to remain to establish programs that serve the senior community. We expect to continue our growth in the Las Vegas Valley, California and the West, efficiently multiplying our services greatly.

What is your dream task, outside of your present field?

I have actually currently held my dream job– being an F-105 fight fighter pilot. I’m a bit beyond that now, as I don’t believe I could pull the G’s I when had the ability to.

Whom do you appreciate and why?

My better half, Pat. After more than 54 years of marital relationship, she remains a gorgeous woman, arranged and focused.

Exactly what is your biggest pet peeve?

Individuals who make guarantees and don’t keep them.

What is something that people might not understand about you?

I do not enjoy TELEVISION.

Anything else you want to inform us?

In 2013, the foundation responded to more than 10,000 requests for support services, including nonmedical health help, restricted home-maintenance support, loans of movement devices and financing for senior support groups. As it enters its 14th year of service to the senior neighborhood, the foundation will certainly continue its development and financing of brand-new services while preserving and improving its existing services to guarantee the safety, security and self-reliance of the senior neighborhood.