03/14/2014 | by
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Sabra Health Anticipating Record Investment in 2014

Rick Matros, chairman and CEO of Sabra Health Care REIT (NASDAQ: SBRA), joined REIT.com for a video interview at the St. Regis Hotel in Washington, D.C. during NAREIT’s 2014 Washington Leadership Forum.

Sabra has recently expanded into Nebraska and Texas, and Matros was asked if further investment could be expected.

Matros explained that Sabra has indicated that it expects to invest in the range of $350 million to $450 million this year, making it “our best year up to this point.”

The health care REIT has no geographic limitations, said Matros, adding that its focus will remain on “senior housing, skilled nursing to a lesser extent and acute hospital opportunities that make sense for us.”

Matros was also asked for his opinion on the segment of the health care industry that appears to be the most promising in the short term.

“I’d say senior housing. I think there are terrific development opportunities there and I think if you pick the right market share, you don’t have to worry about overdevelopment,” Matros replied.

He noted that Sabra tends to focus on secondary and tertiary markets. The senior housing model, specifically assisted living and memory care, has changed dramatically in the past several years, Matros said.

“It’s no longer a real estate play only. It’s a medical model. We have a lot of the same kind of residents in senior housing that we used to have traditionally in skilled nursing facilities… so that’s the area that we think has the most upside,” he noted.

Matros said he would expect the same short-term trends in health care to be present in the longer term: “We still like the skilled sector. We like the acute sector as well. Medical office buildings–I’d say in the long run, we like those as well. We just think pricing’s too high right now.”

Meanwhile, Matros noted that Sabra has continually been shifting away from involvement with Medicare and Medicaid since the company was formed three years ago. Today, exposure to Medicare and Medicaid is about 57 percent on a pro forma basis, compared with about 80 percent exposure three years ago, according to Matros.