David Hegarty, president and COO of Senior Housing Properties Trust (NYSE: SNH), joined REIT.com for a CEO Spotlight video interview at REITWorld 2014: NAREIT’s Annual Convention for All Things REIT at the Atlanta Marriott Marquis.
Hegarty explained that, despite its name, almost 50 percent of the company’s assets consist of medical office buildings, with senior housing accounting for the remaining portion. The majority of the properties, which are spread across 39 states, are triple net-leased.
“We’re trying to capitalize on the demographic trends for two different age groups,” Hegarty said. The medical office consumer is typically aged 65 and older, he noted, while senior housing consumers are generally aged 80 and above.
In terms of demographics, Hegarty said the company has benefited “across the board.” The areas of greatest strength have been the Mid-Atlantic and Southeast regions, particularly Florida, he explained. Every property has an occupancy rate of 90 percent and above, Hegarty pointed out.
The weakest areas in terms of supply outpacing demand are the Arizona markets of Phoenix and Scottsdale, as well as Dallas and Houston, according to Hegarty.
Turning to balance sheet matters, Hegarty described the company as “very well-positioned.” Total assets are about $6.5 billion. The company’s leverage ratio is approximately 45 percent debt to total assets.
“Right now, we’re in an excellent position,” said Hegarty, adding that the company has about $80 million in cash on hand and an untapped $750 million unsecured revolving credit facility. “We have plenty of capital and interest in investing further in this space."