Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Mark Biffert – Oppenheimer & Co.
Mark Biffert – Oppenheimer & Co.
I was wondering if you could give some of the details in terms of the rate you had on the extensions.
Mark Ohlendorf
The extensions that were affected in the quarter and there are a couple of more of these that will be affected in the middle of ’09, those are contractual extension arrangements so the rates remain largely unchanged.
Mark Biffert – Oppenheimer & Co.
You didn’t have to pay a bump in the fee for that?
Mark Ohlendorf
Somewhat but the change in pricing is pretty modest given today’s climate.
Mark Biffert – Oppenheimer & Co.
Can you talk a little bit about the environment, there’s a lot of talk out there about M&A activity in the senior housing space and the potential for you guys getting greater management agreements and your feeling in terms of how much more you think you can add to your platform in this environment.
Bill Sheriff
In this environment we’re going to be very much focused on executing our plan. On the near term we’ll be very disciplined about looking at any opportunities if their slim opportunities with slim margins and they may be more opportunity for distraction then they are for significant gains. Our focus will be more on the longer term basis.
Mark Biffert – Oppenheimer & Co.
You don’t expect to be doing a lot of acquisitions it would be more of taking on management agreements versus acquisitions.
Bill Sheriff
I would doubt that we would be looking to take on management agreements per se unless they’re very extraordinary attractive terms. We’ve never created a lot of wealth off of just pure management agreements.
Mark Biffert – Oppenheimer & Co.
If you could talk a little bit about the risk of caps going in on any of the third party revenue given the significant increase. Is home health impacted by caps or is that just the therapy services?
Bill Sheriff
The caps have been extended for therapy services and there’s nothing currently slated for home health. There’s some things we read in the budget package that suggests that there might come some pressure on home health but it’ll be out there a ways.
Mark Biffert – Oppenheimer & Co.
Can you talk a little bit about what you’re hearing from your tenants in terms of their attitudes, the people that are moving out what is their single main driver for moving out? How much children losing their jobs has impacted occupancy over the last two quarters.
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