Back to Headlines Print Version Buzz Up Stumble it Tweet it Facebook LinkedIn

Sunrise Senior Living 3Q Loss Narrows; Occupancy Falls

By Veronica Dagher, Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- Sunrise Senior Living Inc.'s (SRZ) third-quarter loss narrowed about 36%, helped in part by higher average daily revenue per occupied unit in its comparable communities.

Yet, Chief Executive Mark Ordan indicated the company still has some work to do.

"We are pleased with the restructuring progress we have made but not with our financial performance," he said in the company's third-quarter earnings release.

The McLean Va., luxury senior housing operator's third-quarter loss narrowed to $44.4 million, or 88 cents a share, from $69.7 million, or $1.36 a share, a year earlier.

Sunrise said its loss from continuing operations--a figure industry watchers are keeping a close eye on as the company makes moves toward profitability--was 77 cents a share.

Revenue fell to $382.6 million from $412.6 million, a year earlier, hurt in part by lower management fee revenue.

Sunrise has been battling balance sheet issues after years of overexpansion. The company has been racing against the clock to refinance its debt and restructure deals with some of its major lenders by year end.

In recent weeks, some doubts about Sunrise's viability may have been tempered as it announced the transfer of its stake in its Fountain joint venture and a pact with many of the lenders on its troubled German assets.

Sunrise's financial health is important to the senior-housing industry as it operates many health care REIT-owned facilities. As such, Sunrise's ability to fill up those facilities impacts the bottom lines of certain REITs.

To that end, Sunrise said average unit occupancy in comparable communities, an industry metric that has been especially scrutinized in the economic downturn, fell to 86.7% from 90.5% a year earlier. Average daily revenue per occupied unit in comparable communities increased 2.3% to $186.4 million.

Still, indications that the worst of the downturn for senior housing occupancies may over came from competitor Brookdale Senior Living Inc. (BKD) last week. Brookdale also said it was restarting its expansion program, which garnered applause from investors. The news gave a lift Brookdale shares along with shares of other operators in the senior housing space including Sunrise and Emeritus Corp. (ESC).

To further clean up its balance sheet, Sunrise has put several properties on the block including its troubled German assets.

In addition, Sunrise has restructured operations, cut expenses and looked to bolster its cash. As of Sept. 30, Sunrise had $43.4 million of unrestricted cash.

Challenges for the operator remain though, including $411.9 million in long- term debt in default and pending litigation with major health care REIT HCP Inc. (HCP).

-By Veronica Dagher, Dow Jones Newswires; 212-416-2261; veronica.dagher@ dowjones.com

  (END) Dow Jones Newswires
  11-09-090749ET
  Copyright (c) 2009 Dow Jones & Company, Inc.