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CEO Spotlight: LTC Development Pipeline in Full Swing

11/13/2013 | By Allen Kenney

Wendy Simpson, chairman, president and CEO of LTC Properties, Inc. (NYSE: LTC), joined REIT.com for a CEO Spotlight video interview at REITWorld 2013: NAREIT’s Annual Convention for All Things REIT at the San Francisco Marriott Marquis.

Simpson was asked about LTC Properties’ recent development activity and the likelihood of it staying at current levels going forward.

“We got into development because we wanted to have more investments in the private-pay assets. We were finding that purchase an already built and operating asset was very expensive in excess of replacement,” she said. “We started working with operators to build some properties. We have quite a pipeline going for 2014, and some of it will go into 2015.”

LTC Properties doesn’t have a dedicated construction department. According to Simpson, that makes the company more nimble in its reactions to market conditions regarding development.

Simpson discussed the prospects for more consolidation in the health care sector and potential drivers.

“I’m not sure about the skilled nursing area if you’re talking about consolidation in operators,” she said. “I just don’t see a skilled nursing company coming public or getting larger. I am seeing some regional consolidation: large regional operators buying other large regional operators.”

Simpson also offered some insight on the effect of health care reform on her company’s business.

“The push to the most cost-efficient level of care is still happening,” she said. “What we’re looking for in our building and the properties that we’re buying is the newer property - the property that will be the property of choice in the area. So, we’re looking for the more sophisticated operator in the region - the strongest one with the most associations with the local hospitals and the referral sources.”