Question-and-Answer Session
Operator
(Operator instructions) The first question comes from the line of Ross Nussbaum – UBS.
Ross Nussbaum – UBS
First, it looks like 17% of your MOB leases expire next year. Where do you see the mark to market on that space?
Paul Gallagher
We have consistently seen over the past couple of years mark to market increases anywhere from 2-5% and the 17% is pretty typical of the rollover we have in that space. We typically have 4-5 year leases on average and typically anywhere from 15-20% of the portfolio rolls each year.
Ross Nussbaum – UBS
Do you think it will still be positive next year?
Paul Gallagher
It is positive so far. We haven’t seen any push back yet on rental rates so we don’t anticipate it going down at this point in time.
Ross Nussbaum – UBS
It looks like on the interest income line it looks like $13 million of interest income on maturing loans receivable next year. Are you going to be extending those loans or are those getting repaid?
Thomas Herzog
$13 million of interest income maturing?
Ross Nussbaum – UBS
In the supplemental on page 11 if I am reading this right you have $13 million of hospital interest tied to loans maturing.
Thomas Herzog
Oh that is the Cirrus loan. So that does have a 2010 maturity. That is accurate.
Ross Nussbaum – UBS
Do you expect those to get paid off?
Paul Gallagher
We do. We look at the collateral position there and it is quite substantially in excess of the debt balance we have right now.
Ross Nussbaum – UBS
I appreciate the extra disclosure on Manor Care. I just have a quick couple of clarifiers here. The $562 million of EBITDA is that EBITDA or EBITDAR?
Paul Gallagher
EBITDA but it is only facility based EBITDA. There is still the OpCo piece which we do not have disclosure on in the supplemental this morning.
Operator
The next question comes from the line of Mark Biffert – Oppenheimer & Co.
Mark Biffert – Oppenheimer & Co.
I was wondering if you could expand a little bit on Manor Care in terms of some of the scenarios you think now that they are going to be coming out as a real estate company. Would you look to convert some of that debt to equity? What is your first take? Would you prefer to get your debt paid off?
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