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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Grommit who wrote (37756)	5/17/2010 7:58:30 AM
From: Dan Meleney	1 Recommendation Read Replies (1) \| Respond to of 78705

FVE...potential merger with SNH (I hold small position in FVE)...from their 8K: May 12, 2010 TO: The Board of Directors Five Star Quality Care, Inc. FROM: The Board of Trustees Senior Housing Properties Trust The purpose of this letter is to begin a dialogue between Five Star Quality Care, Inc. (“FVE”) and Senior Housing Properties Trust (“SNH”). As you know, FVE was formerly a 100% owned subsidiary of SNH which was distributed to SNH shareholders on December 31, 2001. The primary motivation for this distribution was the laws which then made it impossible for a real estate investment trust (a “REIT”) to have the profits and losses of health care property operations. For tax years beginning in 2009, these laws were changed to permit REITs to receive the financial results of health care facilities’ operations, as well as rents from those operations, provided these results are received by a taxable REIT subsidiary (a “TRS”). Also, as you know, the Patient Protection and Affordable Care Act has recently been enacted. We believe this new law will significantly change the marketplace for healthcare services such as those provided at properties owned by SNH which are leased by FVE, including possible reduced payment rates for Medicare and Medicaid services. Because of the aforesaid tax law changes and because of the uncertainties created by recent changes in the market for healthcare services, including expected Medicare and Medicaid rate changes, we believe now may be the right time for SNH and FVE to consider (i) changing one or more of the existing leases between SNH (as lessor) and FVE (as lessee) to a management arrangement between an SNH owned TRS and FVE, (ii) possibly combining FVE into a SNH owned TRS, or (iii) taking other actions to change the contractual arrangements between SNH and FVE. -------------------------------------------------------------------------------- We request that the FVE Board consider appointing a committee of FVE Independent Directors to meet with a committee of the SNH’s Independent Trustees to consider these matters further. We look forward to your response.

To: Grommit who wrote (37756)	10/12/2012 5:38:26 PM
From: E_K_S	1 Recommendation Read Replies (2) \| Respond to of 78705

Hi Grommit - Senior Housing Properties Trust (SNH) I started a small position in SNH. I would not call it a true "value" buy but perhaps if it is compared to other medical REITs it might be a candidate at current levels. The company has raised their dividend every year for the last six years. You do raise a possible concern that fees charged may be reduced if/when Medicare reimbursement amounts decrease but I think the market may have priced this in the stock. The stock is off more than 10% from it's highs in 2011. As with many of these REITs, debt levels are pretty high. 14.6x their net annual income equals their long term debt amount ($1.96B). This is at the high end as I would like to see something south of 10x's. The current yield for the SNH common is 6.9%. Insiders did buy shares in March 2011 at slightly higher prices so management does have some skin in how the company performs. Nothing too exciting about BV which is at $14.85/share or their PE that is quite high at 21. My main interest is to capitalize on the future growth potential w/ the baby boomer generation and their need for senior housing. My buy is really to compliment my MPW shares which I feel is in the fully valued (to over valued) price range. SNH is well capitalized and may be in a position to acquire other marginal property operators at value prices. Management appears to be an efficient and good operator, so that is a bonus. My initial buy is small but would like to build up a long term position, hopefully at lower prices. If you see any other candidate hospital/senior housing REITs and/or preferreds, please post. EKS