And in terms of its ability to deploy capital to buy more rent-bearing facilities, it only has a bit over $49 million in unrestricted cash and equivalents. That means it won't be making rent from those properties. In the fourth quarter, it sold off seven of its skilled nursing facilities for gross proceeds of nearly $26 million.

Management blames labor supply issues for the trouble, but that doesn't really make sense, as top-line growth has been weak for years now, and the company's full-year results for 2021 claimed that labor shortages were easing starting from January of 2022.įurthermore, the top line could shrink more, and soon. Over the last five years, its annual revenue was essentially flat, climbing by 0.2% to hit close to $625 million, while its annual cash from operations fell by 12.4% to reach $315.7 million. It's clear that demand for Sabra's properties won't be declining very much anytime soon, and given its low-cost leases, one might assume that its financial performance is strong - but it isn't. 58% of its portfolio is concentrated in the skilled nursing care niche, and all of its 264 leases in the segment are triple-net, which means that tenants are responsible for all of the costs associated with operating and maintaining their facilities.

The top and bottom lines are shrinking, and there might be worse to comeĪs its name implies, Sabra is a real estate investment trust (REIT) that buys and rents out healthcare properties like behavioral health clinics, skilled nursing facilities, and even senior housing using sale-leaseback transactions, among other types of deals.

Pinterest walls