Sunrise Senior Living CEO Discusses Q4 2010 Results - Earnings Call Transcript

| About: Welltower Inc. (WELL)
This article is now exclusive for PRO subscribers.

Sunrise Senior Living Inc. (SRZ) Q4 2010 Earnings Conference Call February 25, 2011 9:00 AM ET


Meghan Lublin – IR

Mark Ordan – CEO

Greg Neeb – CIO, CAO

Marc Richard – CFO

Julie Pangelinan – CAO


Jerry Doctrow – Stifel Nicolaus

Christina Blaishek [ph] – William Blair

Morton Sachs [ph] – Sachs Investment Group


Good day and welcome to the Sunrise Senior Living Fourth Quarter Earnings Conference Call. As a reminder, today’s conference is being recorded. At this time I would like to turn the conference over to Ms. Meghan Lublin. Please go ahead madam.

Meghan Lublin

Thank you. Welcome to Sunrise Senior Living Investor Conference Call, this is Meghan Lublin of Sunrise’s Investor Relation. Before we begin, let me remind you that this call is been recorded and the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 apply to this conference call.

During the course of this call the company will make various remarks concerning management’s expectations, predictions, plans, and prospects that constitute forward-looking statements. Actual results may differ materially from those anticipated by these forward-looking statements. Any forward-looking statements reflect management’s current view only and the company undertakes no obligation to revise or update such statements in the future.

I will now turn the call over the Mark Ordan, Sunrise’s Chief Executive Officer.

Mark Ordan

Thanks Meghan. With me this morning are Greg Neeb, our Chief Investment and Administrative Officer and Marc Richard, our incoming Chief Financial Officer. Also with me is Julie Pangelinan, our current CFO who will be leaving Sunrise in a few weeks.

Julie is a first-class accounting professional who did so much, first to enable Sunrise’s survival and then put us on a path of ongoing reliable success. We can’t thank Julie and after all she has done for us.

2010, was the year of significant strengthening of Sunrise preparing us for strong future. We announced strong operating results this morning including comparable community occupancy of 88.3%, which was 80 basis points ahead of the same period last year and 60 basis over the prior quarter. We posted average daily rate growth of 3.7% over the fourth quarter 2009. Of course, we now operate a smaller revenue base and our overhead has not declined tremendously [ph].

We restored our balance sheet, dramatically reduced our debt, and restructured several of our joint venture and management relationships. We also made a major first step in our stated goal of owning more of what we manage with the recent acquisition with the CNL Lifestyle lease of one of our finest portfolios.

We were just as busy restructuring our operations where we both recruited from outside and in some cases like with our cohesive operations promoted strong professional from with them. Virtually every area of the Sunrise operations and community support team has been strengthened and here again we have a built a great foundation for future success.

Our team has successfully climbed many mountains before and I’m confident that together we can cross the hill we still face. We’ve continued to deal with many legacy issues at Sunrise, fortunately among them is our strong brand and reputation.

We have the sectors perennially leading brand and we have many plans to build this all important area. When I refer to the hills, we still have to climb let me clear, first, we reduced the size of Sunrise fairly dramatically and while our fixed overhead run rate has declined and has not declined enough yet and we still have outside G&A costs hitting each quarter. We’re tackling this now.

Also, now that major parts of the old Sunrise have been discontinued, our management partnerships and contracts now are the major pieces of our business. As you will see in a full reading of our 10-K and 8-K filed this morning, we have provided additional supplemental disclosure to help you better understand both our revenue strength components as well as pointing out, including specifically in the 8-K filed this morning, the continuing imbalances in some of our JV relationships.

Well, these relationships are not individually material, they’re still very important to our revenue base and we intend to work on the imbalances to find a comfortable resolution. Again, to be clear, we believe in transparency and we have high confidence that the legacy challenges before us are manageable, just as larger past challenges were.

We want you know that while we agree with recent headline, Sunrise Senior Living is back, we haven’t moved our offices to Tahiti. This work to be done and we’re looking forward to doing this as any strong independent and committed management team should.

In just a moment, our Chief Administrative Officer, Greg Neeb and our Chief Accounting Officer and incoming CFO Marc Richards will provide additional detail about the quarter. But before they do, I’ll expand on some of the relationships that are essential to Sunrise.

In 2010, not only do we structure our relationship with Ventas, we built on an already strong relationship to put us on a path of increased performance in this major portfolio. We work very closely with the entire Ventas team to find ways to add value to our assets and this process is already borne through.

Our relationship with HCP, which was strained as we entered 2010 was also restructured and is now positive and constructive. We are of course excited that we have renewed our relationship with CNL with the purchase of the portfolio we once owned with our Capita. We are also very proud of both the continuing relationship we have with our Capita in the U.K. and of the mutually valued added relationship that ended with the CNL Sunrise purchase.

We want Sunrise to be considered the operating partner of choice and we hope that these relationships and others attest to the renewed strength of Sunrise. This reputation will enable us not only to stay strong but to find new opportunities for growth in a rapidly changing sector.

You may recall that we did not start 2010 with positive lender relationships; of course I’m happy to report that our lender relationships are dramatically improved and we have now moved to establishing new banking relationships to support future operations.

I spoke earlier about the Sunrise brand and (inaudible). The Sunrise mission and principles of services along with our physically attractive and adaptable communities and thousands of little details collectively represent the best brand in senior living and provide the Sunrise signature experience.

We have built a very talented and driven sales and marketing team to build our brand further and in 2011 as we celebrate our 30 years of championing the quality of life for all seniors, you should expect to see a lot from Sunrise. The quality of our brand of course also opened many future possibilities for us to take advantage of and we are excited by these prospects.

Now, let me talk about our team and core operations. I have reported to you during the past several quarters that this was not going to be simply a financial turnaround, but the building of a foundation for growth. I also said that 2010 was a year of rebuilding our teams and that’s just what we’ve been doing.

We have been a titan in every core area of community operations to ensure that we will have the best team, the best care, the best activities, and something very dear to my heart the best food. In fact this week we are rolling out a new menu signaling the shape of things to come.

We also have been working to be sure that we at the community level have a strong commercial sense along with our commitment to our mission. We are stewards of our real assets on behalf of our shareholders, partners and lenders and we know that this understanding had to extend throughout Sunrise for us to be successful.

Also while we are happy with our core, we know that there are many services that we could incorporate within Sunrise, thanks to our strong geographic concentrations which could add materially to our bottom line.

Finally, let me speak a bit about growth. We see many opportunities arising as our sector changes. Development and acquisition opportunities are likely to appear and we are very interested in exploring these in a measured fashion. Sunrise is a leader in a great and changing sector, we have the strength and discipline to build on what we do while always driving our risk down. I am very excited about the future and ready to tackle the issues we face.

I will now turn the call over to Mark Richards. Mark and I worked together for years including his last 18 months here at Sunrise. He has a great reputation as a seasoned real estate and multi size accounting leader and has grown as respectable auditor (inaudible) during his career.


Mark Richards

Thank you Mark. I will focus my discussion this morning on our consolidated operating results and the various components of Sunrise’s earnings for the quarter and full year of 2010. It’s important for me to note that this quarter we’ve provided a new supplemental report to provide additional operating and performance data, which I will refer to throughout my discussion.

Specifically, we have provided supplemental data surrounding community performance broken down into various categories to include consolidated communities, lease communities, joint venture communities, and managed communities. This data has been organized by community or by loan pool and we have provided the associated mortgage debt by community where loan pool well.

Lastly, we have included in our supplemental a schedule of the management fees we have earned by owner or as applicable loan pool. Greg Neeb will also address this information in more detail later in the call.

Turning to our operating results, during the fourth quarter we reported net income attributable to common shareholders of $15 million or $0.87 per fully diluted share as compared to net income of $10.4 million or $0.19 per fully diluted share for 2009.

The change between periods was primarily driven by a $10 million buyout fee paid to us by HCP and $25 million gain resulting from the sale of venture interest in certain communities to Ventas.

Going forward we will utilize adjusted EBITDAR among other metrics to evaluate our operating performance. We have adjusted net income before interest, taxes, depreciation, amortization, and rent expense to further exclude certain non-cash gains and losses and other items of income or expense, including cost related to our restructuring effort.

Adjusted EBITDAR for the quarter was $25.7 million as compared to $42.1 million for the same period last year. This decline is primarily due to a $6 million reduction in our share of EBITDAR from our ventures primarily due to a $3.6 million reduction in EBITDAR associated with the sale of certain of venture interest in 2009 and 2010, as well as a $2.8 million reduction in EBITDAR due to a gain on the sale of real estate at one of our ventures in 2009.

We also incurred higher general and administrative expenses and earned lower management fee income. General and administrative expenses were $33.5 million for the quarter, compared to $26.4 million for the same period in 2009. Our Q4 2010 G&A includes $2.6 million of professional fees incurred associated with our HCP, Ventas, and CNL transactions.

These transactions resulted in the buyout of 27 HCP management contracts, the sale of our venture interest in certain communities to Ventas, and the formation of a new venture with CNL. Further, bonus expense was $7.6 million, which included a $3 million stay bonus of our CEO compared to $2.3 million of bonus expense in the same period in 2009.

Management fees for the quarter were $26.4 million and included $1.6 million of fees related to contracts that have been bought or terminated. Additionally, Sunrise’s share of earnings from our venture interest increased quarter-over-quarter by $14.4 million primarily due to a non-recurring distribution of $22 million from one of our U.K. ventures.

Our fourth quarter 2010 consolidated operating results were also impacted by $23.4 million in net operating income from our consolidated and lease communities as compared to $21 million in NOI from these communities in the fourth quarter of 2009.

Net operating income as income from operations excluding depreciation, lease expense, and impairment charges related to these communities. This increase was primarily due to four communities that were opened in 2008 and 2009 that continued to lease up.

Turning to our annual results, we reported net income attributable to common share holders of $99.1 million or $1.72 per fully diluted share, as compared when net loss of a $133.9 million or $2.61 per fully diluted share for 2009.

This significant year-over-year change was driven by $63.3 million of buyout fees earned in 2010; lower restructuring cost of $20.8 million, lower impairment charges of $25.8 million, and $68.5 million of income associated with our discontinued operations, as compared to losses from discontinued operations of $25.4 million in 2009. Our exit from Germany and the associated restructuring of that related debt contributed significantly to this year-over-year change of discontinued operations.

Adjusted EBITDAR for the year was a $117.9 million as compared to $131.1 million last year. The year-over-year decrease of $13.2 million is primarily due to lower EBITDAR from our ventures of $12.7 million, primarily due to the sale of certain of venture interests in 2009 and 2010. Lower management fee income and higher G&A expense partially offset by lower development expense due to winding up development activity.

General and administrative expenses for the year were a $124.7 million compared to a $114.6 million in 2009. Our 2010 G&A includes $6.9 million of professional fees incurred associated with our HCP, CNL, and Ventas transactions, $3.5 million in costs associated with the HCP litigation, $2.6 million in severance costs, and $14.1 million of bonus expense compared to $8.8 million of bonus expense in 2009. We continue to believe that our annual recurring cash expenditures for G&A will be a below $100 million in 2011.

Management fees for the year were $107.8 million in 2010 and $112.4 million in 2009. After removing $14.3 million in 2010 and $26.6 million in 2009 related to management fees from contracts that were bought out or terminated, our recurring fees were $93.5 million in 2010 and $85.8 million in 2009. This year-over-year increase of $7.7 million was driven primarily by lease up at various communities that were recently opened.

Our full year 2010 consolidated operating results were also impacted by $91.1 million in net operating income from our consolidated and lease communities. Leasing communities generated $80 million and NOI during 2009. Note that $47.9 million of our 2010 lease community NOI is related to communities that have leases that will expire in 2013 and the extensions of those leases will require third party approval.

Moving on to the balance sheet, our unrestricted cash increased from a $39.3 million at December 31, 2009 to $66.7 million at December 31, 2010. Our outstanding consolidated debt is now $163 million compared to $440 million at the end of 2009. Accordingly, you will note that in our 2010 form 10-K we filed this morning, we no longer believe that there is substantial doubt and our ability to continue is a growing concern.

I will now the turn the call over to our Chief Investment and Administrative Officer Greg Neeb. Greg?

Greg Neeb

Thanks Marc Richards. Let me start by saying that I agree with Mark Ordan’s positive assessment of the state of Sunrise offered earlier in the call. My goal is to make our investor aware of important details of our business about competitively disadvantaging ourselves and respecting confidentiality provisions of our agreements. With that objective that we filed the supplement 8-K this morning and additional information about our properties, ventures, debt, and contracts.

Going forward, we have slightly modified our call format with variety with transparency into our principle business line mainly our consolidated assets, our leased assets, our joint ventures, and finally our management agreements. I hope to accomplish this by providing usual operations data within each group as well describe how those operations affect our asset valuation and financial performance.

I hope to fit our key transactions into these buckets to get better visibility and how they enhance overall value. Our new supplemental 8-K provides information broken down by these business lines and represents how we manage our business.

Before I can start with an overview, I’d like to elaborate on couple of new metrics you will find in our 8-K. First, our properties and grouped into two new buckets, stabilized communities and leased out communities. Stabilized communities are a group of assets owned by a single venture that at least one property has not been opened for 36 months.

This is difference in our concepts of comparable communities which disregards the joint venture and classifies individual properties as comparable if they have been opened since January 1, 2008. I will reference comparable communities for consistency with statistics we have previously disclosed and stabilized communities for new statistics and comparisons.

We believe the new stabilized community concept, the group’s assets by joint venture better captures the financial arrangements incorporated into our loan and venture documents that effectively pool these cash flows and cross collateralizes the assets.

Second, we are now reporting net operating income by these business lines. To match our income statement, our consolidated and leased properties do not have management fee deduction as (inaudible) ourselves an eliminated in consolidation. The other reported NOIs containing management fee deduction at the stipulated contractual rate.

Now, let me start with the general overview. Overall trends for Sunrise Communities continued to improve. Comparable community occupancy of 88.3 for the fourth quarter 2010 is an 80 basis point increase over fourth quarter 2009 and a 60 basis point increase over third quarter 2010. This positive trend has reversed our early year results where we reported declined occupancy in both the first and second quarter of 2010.

ADR for occupied units for comparable communities in the fourth quarter of 2010 was $206.32 representing a 3.7% increase over fourth quarter 2009 ADR. NOI is also higher increasing almost 7.3% in 2010 over 2009 for stabilized properties and 16.6% overall including leased properties.

Let me breakthrough results down on a regional level, where which we have nine regions plus the United Kingdom, all regions except one reported positive NOI year-over-year with a range of negative 0.4% to a positive plus 12.7% with seven of nine reporting growth of 4.5% or higher. ADR increased in all regions in 2010 compared to 2009.

Operating trends for the Sunrise leased communities were positive in 2010, although not as robust as our overall portfolio. Net operating income for stabilized leased communities was up 5.3% for the full year 2010 over 2009. Occupancy was slightly lower or 89.3 for the fourth quarter 2010 versus 89.4 for the fourth quarter 2009.

The leased communities have a different unique profile when compared to our managed and joint venture communities. They are composed of approximately 50% independent living units versus 10% for the JV and managed communities combined. This leads to lower NOI per unit and has slightly enhanced, slightly impaired growth as compared to our assistive living and Memory Care product in this economy.

Our eight stabilized consolidated community consist of a variety of asset types, including three lower performing assets we are in the process of selling and other properties we consolidate but don’t own 100%, so the trends are not necessarily revealing on an ongoing basis.

Specific information about important individual assets including Connecticut avenue and Monterey is available on our 8-K both of which are trending positively. Three communities in Montreal that are wholly owned have not leased up according to our expectations. The facilities are operated in this French speaking market but penetration and brand awareness has been slow.

$26.8 million mortgage debt relating to these communities is not recourse to us matures in April 2011 and we have provided operating deficit guarantees to the lender. We are currently considering our options for these communities.

Operating trends for venture and managed communities in the fourth quarter of 2010 were strong. Comparable community occupancy of 88.2% for the fourth quarter of 2010 was up a 110 basis points over fourth quarter 2009. ADR for occupied unit for venture and managed comparable communities in the fourth quarter of 2010 was $220.07 representing a 3.6% increase over fourth quarter 2009. Net operating income for venture and managed stabilized communities was up 7%, for the full year 2010 versus 2009.

Let me highlight two transactions occurring in 2010 relating to venture and managed communities, number one, our Ventas restructure and number two, our new partnership CNL.

In December 2010, Sunrise entered on a purchase and sale agreement with Ventas and certain of its affiliates to sell to Ventas all of Sunrise’s joint venture interest and entities owning 58 communities managed by Sunrise. The aggregate purchase price of the joint venture interest was $41.5 million. Sunrise continues to manage the 58 Senior Living communities together with the other 21 Senior Living communities in the Ventas portfolio that are already holding on by Ventas.

As a condition of the purchase agreement, Sunrise and Ventas amended the existing master agreement and management agreements to set forth the revised rights and obligations with respect to the management and other matters related to these communities.

Additionally, Ventas waived certain existing rights it had to terminate multiple management contracts for performance based reasons that impose tighter performance operating and reporting thresholds, the 79 management contracts and maturities, mainly from 2034 to 2037.

We believe this transaction increase the security of our management (inaudible) with Ventas which was our number one objective. And also from Ventas a realistic opportunity to return to earning of 6% management fee in the future. The JV interest were sold to them were not marketable and had very limited participation in major decisions. This poor controlled aspect is inconsistent with our current real estate ownership objectives and because of this we view these interests as non-core.

Number two, in January 2011, we brought in a new partner to replace a selling institutional partner, in a pool of 29 high quality assets mostly purchased mansions. We moved our 10% promoted interest into a new 40% interest in the new venture with CNL.

The transaction is significant to Sunrise for a few main reasons. Number one, it stabilizes this core group of management contracts well in the future as we now have a reset performance test and unlimited share rights. Our former partners have the right to terminate our management agreements for a specified fee.

Number two, it allows us to control the assets as we have fixed buyout right of our partner at the beginning of year three at a fixed price. Number three, it realize the value of our embedded promote in the old venture as we wrote our interest from a 10% interest to a 40% interest.

Number four, it opened up new lending relationships to Sunrise as we plaint this mortgage, this new mortgage $430 million with Goldman Sachs. We have more work to do with our existing management and joint venture relationships. We recognize that some of our recent development assets have been (inaudible) to lease-up and put additional stress in our lenders and partners.

Our ventures passed used a high LTV mortgage financing rolling forward into new more conservative lending environment and also induce some stress. Therefore, and certain of these circumstances, it is more difficult to qualify for prewired extension provisions or obtained favorable refinance the options at par. Our 8-K provides on data on each of these situations. Mark expressed our outlook for these things at the beginning of this call.

Now, let’s turn to a discussion of our noncore assets. As a part of the German settlement, we created a liquidating trust of assets to be sold for the benefit of the participating banks. We guarantee a minimum payment recovery under the agreement of approximately $50 million.

We sold four properties in the trust in 2010 reduced to $50 million guarantee by $11.5 million. In January 2011, we sold an additional two parcels reducing the guarantee by another $6 million.

Moving on to loan balances maturities in the falls. As of today our line of credit balance is completely paid off and we have $13.5 million outstanding and letters of credit, which is completely cash secured. At the JVs we have worked out defaulted loan balance now to approximately $300 million at year end, down from $ 1 billion earlier in the year. We continue to work through their remaining defaults with our lenders and partners.

That concludes my comments. Mark?

Mark Ordan

Thank you Greg. Thank you Mr. Richards. Operator, we are now ready to turn the call over to any questions.

Question-and-Answer Session


Thank you sir. (Operator Instructions) Our first question comes from Jerry Doctrow with Stifel Nicolaus.

Jerry Doctrow – Stifel Nicolaus

Hi good morning and thanks for all the additional disclosure although it’s complicated – now we actually have to go through it all. I have a couple of things Mark, I think one on sort of the joint ventures, I think I read this – as he was going through quickly is that the numbers that are in the disclosure are kind of pre the CNL transactions, so that the ownerships, weighted kind of average ownership interest will be up and I was curious whether you kind of have a pro forma and for CNL ownership interest in the JV and maybe the adjusted debt on the JV sort of post CNL.

Mark Ordan

We have don’t have that in our fingers which you’re absolutely correct.

Marc Richard

Jerry that the disclosures reflect the – our Capita arrangement which was in place at year end. Maybe you can let to know which particular things you’re looking for on a pro forma basis, we can try to provide that.

Jerry Doctrow – Stifel Nicolaus

I can combine that, I think the two we really just want is, one that weighted average ownership interests the JV has posed and then kind of the post debt number, I don’t know if there’s refinancing on the CNL or not.

So that was one. On the other side, I think just on G&A, so to bring down G&A you indicated was – is a big issue, I think you indicated it will be down under this $100 million based on the cash kind of run rate basis. Any more color you can give us as to how much it could come down, how fast it can down, what should we be thinking about, as we think about ’11 to ’12?

Mark Ordan

Well, in 2010 we spent a lot of time and money on rebuilding Sunrise so there are many aspects of G&A that – certainly think it will hit the fourth quarter that were important, but haven’t done the numbers where we needed to be. I would say that it’s – well I don’t have a number that I’ll throw out today, I think that we can readily tackle this issue and bring our G&A down maturely lower and it’s something that we are doing now, this is not a long-term effort.

Jerry Doctrow – Stifel Nicolaus

So we should start seeing benefits even first quarter, second quarter and maybe some ramp as you go through the year in terms of bringing it down or?

Mark Ordan

Yes, I mean over the coming months I think you’ll see the difference.

Jerry Doctrow – Stifel Nicolaus

Okay. Yes, that’s it, that’s all from me. Thanks and again I appreciate this good disclosure.

Greg Neeb

Oh, sure thank you Jerry. I think you asked for didn’t you Jerry?

Jerry Doctrow – Stifel Nicolaus

We did number of a times.

Mark Ordan

We are working on getting the average on page 4 of the supplemental, under venture pool, foot notes.

Jerry Doctrow – Stifel Nicolaus

That’s just – one of the ways we evaluate it, as you indicated which is by the buckets and just those metrics, sort of move the numbers in fair amounts, so it’s like – make sure we got exact good numbers.

Mark Ordan

You got it.

Jerry Doctrow – Stifel Nicolaus

Okay, thanks.


(Operator Instructions). And we’ll move next to Ryan Daniels with William Blair.

Christina Blaishek – William Blair

Good morning it’s Christina Blaishek [ph] for Ryan today. I have one bigger picture question, you commented in your prepared remarks that your long-term goal is to own more of what the company manages and then you also remarked on growth opportunities which include both development and acquisition.

So I was just wondering, as you continue to right size and restructure everything and get the portfolio right. If you could just comment on some of these longer term opportunities and what you think your strategy is going to be with those?

Mark Ordan

Sure, well first of all I’m certain of our, as we, I think we’ve said in the past and certain of our JV relationships, there are times when people look for liquidity and if there is a possibility for us to own more of that venture going forward, we would like to do that. We like owning real estate, we like managing right only what we manage, I think it’s just a basic value building principle that we think is important and a lot of us in the management team here has spent a lot of time in the real estate business before.

On the other side of the coin, we have strong geographic concentrations at Sunrise which really bear great fruits and go to the bottom line and we see many opportunities where there are locations that don’t yet have a Sunrise and that’s very enticing to us. If we can add to our market position we’d like to do that.

Last, I think this is a changing sector, it’s a consolidating sector and I think that at times there are different ventures that are pooled, that are available to take on the management contracts and we’ll be eager to do that. Over the last couple of years and you noted we’ve been in a rebuilding phase and we are not looking for growth opportunities and that has shifted.

Christina Blaishek – William Blair

Okay, great that’s very helpful. Thank you.


(Operator Instructions). And we’ll go next to Morton Sachs [ph] with Sachs Investment group.

Morton Sachs – Sachs Investment Group

Am I on?

Mark Ordan

Yes you are.

Morton Sachs – Sachs Investment Group

Thanks for that again. I want to congratulate you; this has been quite an interesting event watching Sunrise come out of the ashes. I am a social worker and financial social networking on the message boards communicate daily about Sunrise and have been watching with interest how this has evolved and how the communications have been and it’s been quite and again I congratulate.

I sort of committed to (inaudible) which is past this morning, we would host a lunch for the message board at the Carlisle, New York and I hope that when we do that somebody’s from the company would come and visit us. Anyway we just want to congratulate you to, we hold over million shares but – interest in your success. I think this has been as good of a classic job as I ever seen and I’ve been at this for 50 years. So congratulations and that’s all I want to say.

Mark Ordan

That’s very flattering and we appreciate the support, enjoy your lunch.

Morton Sachs – Sachs Investment Group

Okay, thanks.


(Operator Instructions) And we will go next to Jerry Doctrow with Stifel Nicolaus.

Jerry Doctrow – Stifel Nicolaus

Hello, again. Just kind of follow ups on kind of acquisitions development and I think you’re also talking about by sort of – kind of every kind of ancillary services. So I guess I was just trying to get again a sense of sort of timing I mean I think Mark you said on sort of acquisitions development, you proceeded a measure phase on ancillary again if I understood you right, which market you see a lot makes any sense about the timeframe for perhaps expanding in any particular areas in which you sort of add services.

Mark Ordan

Yes, let’s sort of take down to the question I answered before. Having come – well we certainly haven’t declared victory but after spending a lot of time on rebuilding Sunrise, we also want to look at the opportunities to do what we do better. So obviously services that our residents require is something that we might to understand better and where there are opportunities of course to provide, we’d like to do that.

In terms of development, the markets are changing, the capital markets are changing so we see opportunities there and we think we have the ability, as I said at a measure phase, we don’t have a timetable for these things but I think it is important to let our shareholders and our partners know that this is something that we’re actively working on, we think it’s part of our job to do it. So but there is no timetable or forward looking projections around us.

Jerry Doctrow – Stifel Nicolaus

It’s something, you could see yourself maybe in or at least starting some projects say in 2011, I was just trying to get a sense of, you probably got of move to off hands, again I’m trying to pin you down so when do you it, but you’re sort of – you could start tomorrow or is it still sort of ways off that you could do.

Mark Ordan

Well, certainly I wouldn’t have mentioned it but it wasn’t something that was – to be honest 2011 initiative, so.

Jerry Doctrow – Stifel Nicolaus

Okay. All right, thanks.


And at this time there are no further questions. I’ll turn the callback to our speakers.

Mark Ordan

Great, well, thank you all very much for your support and we look forward to sharing our continued progress in the months to come. Enjoy your day.


Ladies and gentlemen that does conclude today’s presentation. We thank you for your participation.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to All other use is prohibited.


If you have any additional questions about our online transcripts, please contact us at: Thank you!