LTC Properties Inc
), a real estate investment trust (REIT), recently acquired a
skilled nursing property with 90 licensed beds located in
Brownwood, Texas for $6.5 million. The company utilized the
proceeds from its unsecured revolving line of credit to fund the
Additionally with this purchase, the company tied the property
up with an existing master lease with Senior Care Centers at an
initial cash yield of 9.0%.
LTC Properties reported first quarter 2012 FFO (funds from
operations) of 56 cents per share compared with 52 cents per share
in the year-earlier quarter. Funds from operations, a widely used
metric to gauge the performance of REITs, is obtained after adding
depreciation and amortization and other non-cash expenses to net
LTC Properties primarily invests in long-term care and other
health care properties through mortgage loans, property lease
transactions and other investments.The company usually leases its
health care facilities in "triple-net" leases, under which the
tenant pays all taxes, insurance and maintenance for the
properties, in addition to rent.
This insulates the company from short-term market swings that
may adversely affect the operations of a particular facility, and
provides a relatively steady source of income. Health care is also
relatively immune to the economic problems faced by office, retail
and apartment companies. Consumers will continue to spend on
healthcare while cutting on discretionary purchases.
LTC Properties currently retains a Zacks #3 Rank, which
translates into a short-term Hold rating. We have a long-term
Neutral recommendation on the stock. One of its competitors,
Health Care REIT Inc.
) also holds a Zacks #3 Rank.
HEALTH CR REIT (HCN): Free Stock Analysis
LTC PROPERTIES (LTC): Free Stock Analysis
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