Diversified Healthcare Trust (DHC) 2008 Q2 法說會逐字稿

Good day everyone. Welcome to the Senior Housing Properties Trust second quarter 2008 financial results conference call. This call is being recorded.

At this time, for opening remarks and introductions, I would like to turn the call over to the Director of Investor Relations, Mr. Tim Bonang. Please go ahead, sir.

Thank you, Cynthia. Good afternoon everyone. Joining me on today's call are Dave Hegarty, President and Chief Operating Officer, and Rick Doyle, Chief Financial Officer. Today's call includes a presentation by management, followed by a question-and-answer session.

Before we begin today's call I would like to state that today's conference call contains forward-looking statements within the meanings of the Private Securities Litigation Reform Act of 1995, and the Federal Securities Laws. These forward-looking statements are based on Senior Housing's present beliefs and expectations as of today, August 7th, 2008.

The Company undertakes to obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call, other than through filings with the Securities and Exchange Commission regarding this reporting period. In addition, this call may contain non-GAAP numbers, including funds from operations, or FFO. A reconciliation of FFO to net income is available in our supplemental package, found in the Investor Relations section of our website.

Additional results may differ materially from those projected in forward-looking statements. Additional information concerning factors that could cause those differences, is contained in our 2007 Form 10-K, and second quarter Form 10-Q to be filed with the SEC within the next day, as well as in our Q2 supplemental operating and financial data found on our website at www.snhREIT.com. Investors are cautioned to not place undue reliance upon any forward-looking statements.

With that, I would like to turn the call over to Dave Hegarty.

Thank you Tim. Thank you for joining us during this very busy reporting season that is going on. We are pleased with the results for the quarter during what is a transformational period, as we take steps to diversify our tenant base and product type. Our previously announced $565 million of acquisitions, of medical office, clinic, and biotech laboratory buildings, allows us to enter the MOB space in a meaningful way.

When these transactions are complete, we will have expanded our tenant base, from 10 to nearly 400 tenants, and over 20% of our rents will come from medical office, clinic, and biotech laboratory buildings. We believe these steps will bring more security, to what is already a very secure portfolio. I would like to point out a couple of events during the quarter that enhanced our financial position for the future.

First in early June we completed a significant equity offering, and raised net proceeds of approximately $394 million, which we used to reduce our outstanding balances on our revolving credit facility to zero, and provide cash for future acquisitions. This was followed by an upgrade of our public debt to investment grade status by Standard & Poor's. Looking to our second quarter results, I would point out that the timing of our equity offering, and the phased closings of our MOB transaction, have a transitional influence on our results, as we deploy the proceeds of the offering.

As such, this morning we reported FFO of $0.41 per share for the second quarter, and ended the quarter in an excellent position. As the equity proceeds are invested, we expect our FFO to steadily increase, and we believe that we will be able to take advantage of a range of investment opportunities in the near future. For example, as of June 30th, our cash balance was $186 million. This amount had not yet been invested into income-producing properties.

Now, Rick will review our quarterly financial results and properties acquired, and then I will discuss some industry events, the activities with our tenants, the lease performance, and acquisition opportunities before we take any questions.

Let me turn it over to Rick now.

Thank you, Dave. For the second quarter 2008, our FFO was $41.2 million, compared to $34 million for the second quarter 2007, or a 21% increase. On a per share basis, FFO was $0.41 for the second quarter in both 2007 and 2008. FFO for the second quarter of 2008 was a bit lower, primarily because the net proceeds of our June equity offering had not been fully redeployed. We have provided a number of reconciling items on page 14 of the supplemental package, to allow you to calculate FAD, AFFO, CAD, or a comparable other number.

Revenues for the second quarter 2008 were $53.4 million, compared to $45 million for the second quarter 2007. This was the result of acquiring 25 properties since April 1st, 2007. Interest expense was modestly higher as a result of increased borrowings on the revolving credit facility in the 2008 period.

General and administrative expenses increased by $1.2 million. This increase primarily relates to the 25 properties we acquired, and were somewhat higher than the normal, due to increase professional fees in noncash stock compensation. Percentage rent earned from our tenants was $2.3 million for the quarter, which is a $639,000 increase from the same quarter last year, or a 39% increase.

These revenues dropped to the bottom line, as we acquired properties there is a future growth built into the leases. During the quarter we reported an impairment of asset charges of $2.9 million, after determining that the fair market value of a closed assisted living facility held for sale needed to be reduced. This is one of two properties we own that Five Star has classified as discontinued operations. Subsequent to quarter end, our Board declared a dividend of $0.35 per share, which is a payout ratio of 85% for the quarter's FFO.

In June, we acquired the first group of the medical office buildings which totaled $83.8 million. We closed on acquisitions of one multi-tenanted medical office building, one clinic, and three biotech laboratory properties. The multi-tenanted property is a 76,000 square foot building in Pittsburgh, Pennsylvania, with 17 medical tenants, and is 97% occupied. Most of the tenants in this building are affiliated with the University of Pittsburgh Medical Center. The clinic is a 70,000 square foot building in Austin, Texas, which has seven tenants, and half of the property is leased to HCA. This property has a surgery center, and other related clinical groups, and is 98% occupied.

We also acquired three biotech lab properties, that include a 117,000 square foot building in Irving, Texas, leased to Quest Diagnostics for eight years, a 124,000 square foot building in Fort Washington, Pennsylvania, leased to OmniCare for 3.5 years, and a 62,000 square foot biotech wet lab building in Lincoln, Rhode Island, leased for five years to StemCells Inc., who subleases the space to two tenants.

Subsequent to quarter end, we closed on three more medical office properties for $39.1 million. We funded these properties with cash on hand, and assumed three mortgage loans on two of the properties totaling $10.8 million. One of the properties has two buildings with a total of 65,000 square feet located in East Syracuse, New York, and both buildings are leased to Hematology Oncology Associates of Central New York until 2023. The property is a comprehensive cancer center.

The second property is a multi-tenanted building located outside Atlanta, Georgia, with a primary tenant of the Atlanta Center for Medicine, and primary care providers affiliated with the Emory Clinic. The third property is located in Anaheim, California, with a total of 34,000 square feet, and is leased to a multi specialty physicians practice through 2010.

Tomorrow we expect to close on 20 more medical office buildings and clinics for approximately $110 million. 18 of the properties are satellite clinics on one lease, with Fallon Community Health Plan, a Massachusetts health plan that is also an insurer. The lease expires in 2019. One building is a 72,000 square foot clinic, leased to Health Insurance plan of New York, and is leased to 2034, and the other building is a 29,000 square foot clinic, located in King of Prussia, Pennsylvania, and leased to the Children's Hospital Philadelphia until 2013.

Following the completion of these transactions, we will have closed approximately $233 million of the previously announced $565 million MOB transaction. As discussed on our last conference call, we closed on acquisitions of 10 private pay senior living properties effective March 31, 2008 for $135 million. During the quarter, we did not close on any new acquisitions of senior living properties.

After the end of the quarter, on August 1st, we also closed on an acquisition of two assisted living facilities in Birmingham, Alabama for $14.1 million, and leased them to Five Star Quality Care. During the second quarter we also funded $10.7 million of capital improvements to Five Star for improvements and expansions to that property to lease by them.

At June 30th, we had $186 million of unrestricted cash, and complete availability of our $550 million revolving credit facility. Including the 20 MOB acquisitions we expect to close on tomorrow, we will have closed on $163 million of investments subsequent to quarter end, and as of tomorrow we expect to have approximately $50 million of cash on hand, and the revolver will remain undrawn.

We continue to be lowly leveraged, with debt representing only 19% of our debt booked capitalization, and 16% of our market capitalization. We have no debt coming due until 2012. As Dave noted earlier, subsequent to the end of the quarter, our senior debt was upgraded to an investment grade rating of BBB- by Standard & Poor's.

Now I will turn it back to Dave to discuss other activities in the quarter.

Thanks Rick. I would like to touch briefly on two industry developments. First during the past week, President Bush signed the REIT Improvement & Empowerment Act, or [RITA], which included a provision permitting healthcare REITs to own and operate healthcare properties, as long as an independent manager is used to manage the property. We continue to assess the opportunities that this creates, but currently have no intention to of changing our investment or operating approach. This is just another option for us to consider in the future.

Second, CMS recently announced final skilled nursing facility reimbursement rules, that were much better than any of us in the industry expected. There was a 3.4% rate hike for the market basket commencing on October 1st. Five Star said on their second quarter conference call yesterday, that they would expect they will provide them with an additional $4.5 million per annum, or $0.11 per fully diluted share annually.

On the tenant front, there are two significant developments that we announced just after the end of the quarter. One development involved the 10 properties that we had previously leased to the NewSeasons Assisted Living, a subsidiary Independence BlueCross of Philadelphia, or IBC. This lease had a guarantee from IBC which was greatly valued, however last year NewSeasons and IBC had determined to exit the senior living business, as part of a move to merge with another large insurer in Pennsylvania. NewSeasons had discussions with a number of different operators, in an attempt to reach an agreement to get out of the lease. We had certain approval rights on any replacement.

While we obviously are fine with Five Star as an operator, they would not have been our first choice, because of our desire to reduce our exposure to our largest tenant. I think we took a great step in that direction, when we announced the medical office building transactions. Over the past few years, the occupancy and coverage ratios for the NewSeasons portfolio were inadequate to cover the rent, and they were deteriorating, which meant the value of the assets was deteriorating over the lease term.

Our desire to maintain the value of these properties by having an engaged and proven operator like Five Star, outweighed any concerns we had about tenant diversity, and our reluctance to let a strong credit, like IBC, off the hook. As NewSeasons for IBC, and Five Star came closer to an agreement, Five Star initiated negotiations with SNH, to assume the lease and guarantor obligations. As a result of these negotiations, Five Star assumed the NewSeasons and IBC lease obligations to us.

Simultaneously with the assumption of the NewSeasons lease, Five Star agreed to purchase three of the properties, or 259 living units, for approximately $21.4 million. The value is subject to an appraisal process, which has now been completed, and no adjustment was required. The rent payable by Five Star for the seven facilities, which SNH will continue to own, will be approximately $7.6 million per annum. This is a few hundred thousand dollars more than the straight line rent NewSeasons would have paid us on the seven assets, and significantly higher than the cash rent.

There is no increase to the amount during the remaining lease term, which runs through 2017. The unpaid rent of $4.9 million which had been accrued under historically increasing straight line rent arrangements between SNH and NewSeasons, were paid in part by delivery of title for certain personal property to SNH, which was previously owned by NewSeasons, and partly in cash.

The other development had to do with our historical leases with Five Star. One of the leases was becoming increasingly large proportion of Five Stars operations, and eventually trigger an an economy requirement that the lease be capitalized. In addition Five Star had been seeking a lower cast of capital improvement funding for some time.

SNH accommodated their request, in exchange for rebalancing the three leases, and adding some term to the end of the leases. The rent payable by Five Star to us is unchanged as a result of this lease realignment, and the increased rent payable, if and as repurchase improvements to leased properties, will be the greater of 8%, or the 10-year Treasuries plus 300 basis points. The statistics presented in the supplemental package reflect these new lease arrangements.

The first lease now includes 100 properties, including nine properties acquired in the first quarter of 2008. This lease includes independent living and assisted living communities, and half of the standalone skilled nursing facilities. The term was extended by two years to 2022. The number of properties in this lease is not likely to increase, and is actually more likely to decrease, as we periodically sell some underperforming assets. The coverage ratio of this portfolio for the first quarter was 1.27 times, and includes several of the newest acquisitions, which pull down the historical coverage number.

The second lease is comprised of 30 private pay senior living communities, that were formerly managed by Sunrise Senior Living, plus the two in-patient rehabilitation hospitals, and they had a historical coverage ratio of 1.6 times the rent for the first quarter of 2008. This lease expires in 2026, which is a nine-year extension for the 30 senior living communities.

The third lease is where most of the future acquisitions will be included. This lease consists of 23 standalone nursing homes, which is really the other half of Five Star's nursing homes, that we previously reported in lease No. 1, and the 10 private pay properties we acquired in March 31, 2008. This lease expires in 2024.

The tenant performance statistics for the quarter ended March 31, 2008, include the 23 nursing homes for the full quarter, and the 10 private pay properties for one day. The lease had 2.67 times coverage for the March quarter, and the 10 communities that we acquired in March, known as the Sumford properties, were added to this lease on the last day of the quarter, and as a result the coverage ratio will be a much lower number in the future, but should comfortably cover the rent due to us. The fourth lease represents the 7 former NewSeasons properties, and the rent coverage from the first quarter 2008 would have been 1.28 times, and 88% occupancy.

Now looking at our other leases, the Brookdale assets maintained strong occupancy of 91%, and rent coverage increased to 2.23 times. Similarly, the private operators had an average occupancy of 87%, and rent coverage of 2.25 times. And the wellness center maintained coverage of 1.9 times the rent due to us. Overall the portfolio continues to perform very well in meeting it's rent obligations to us.

Now on the acquisition front, we continue to see numerous investment opportunities. We are being very prudent with the opportunities that we are bidding on, to be sure that the reward is appropriate for the risk. We currently have about $63 million of investments under contract, but it would be premature to discuss it in detail, and we cannot assure that we will purchase any or all of these properties. If we are successful, we anticipate these will close before quarter end.

We continue to see a number of quality senior living assets and medical office buildings to consider as investments. We are exercising some restraint, so that the resources to acquire assets have a little extra reward, and our view of the credit crisis is that it will continue for quite a while, putting pressure on operators who need to sell or refinance.

To quickly review our acquisition activity, we have $84 million of acquisitions that we closed during the second quarter. $163 million of acquisitions that closed post-quarter end, including the 20 MOBs we expect to close on tomorrow. And there are $332 million in medical office buildings, clinics, biotech buildings to close in the next three quarters, from that $565 million portfolio.

In closing, market factors are working to our advantage in the 2005 to 2007 timeframe, when capital is abundant, we are very selective as competition for transactions drove pricing to levels that we couldn't justify. And the tightening of the credit markets over the past year has reduced the competition for acquisitions, we are seeing additional opportunities arise, as highly levered owners are forced to sell or refinance, and as opportunity funds reach the end of their hold period.

We are seeing multiple opportunities in private pay senior living, MOB, and other triple net healthcare related real estate, like wellness centers. Our primary advantages in this environment are, that we have a clean balance sheet, with debt to booked capitalization of only 19%, and an undrawn credit facility of $550 million, and that gives us certainty of closure that many of our competitors don't have, and our conservative capital structure solidly positions SNH to aggressively pursue accretive acquisitions during this challenging credit environment.

Now that concludes our prepared remarks, and Rick and I would be happy to answer any questions that you have.

Today's question-and-answer session will be conducted electronically. (OPERATOR INSTRUCTIONS). We will take our first question from Omotayo Okusanya with UBS. Please go ahead.

Yes, good afternoon, gentlemen. Congratulations on another good quarter. The question I have has to do more with the whole relationship with RMR. I think people get to have a lot of liquidity. People get, I know you are in a good position to continue to make accretive acquisition. But the stock has literally underperformed it's [pairs] ever since you guys had the HR deal. I am wondering going forward all the firepower that you have, what opportunities do you have to diversify away from doing business with other RMR-affiliated companies, so that investors feel a little more comfortable in regards to investing in the stock? It really seems like that is what is holding things back at this point.

Thank you. I guess first off, I think that the stock has been on a drag a bit recently, because of the fact that we did raise the equity proceeds, and those funds have not been invested. So this quarter was a bit down from our expected performance just because of, we had so much cash on hand.

And so hopefully I would expect to put that to use in the near term, and that should significantly improve the results for the quarter, and that would allow us to raise the dividend, and so on. Now I think as far as the opportunities out there, we are seeing a number of opportunities that are away from Five Star on the HRPT front, we don't have any current other transactions or follow-on transactions in mind with them.

So maybe down the road there could be something but what we are seeing mostly today a number of opportunities in the medical office building area. We are very optimistic that some of those will come to fruition in the near term. So I don't want to get into specifics but we have several on the line, and we expect that we would be able to finish documenting them, and closing them in the near term.

What about in your core assisted living portfolio, any opportunities to do something with other assisted living operators out there?

Well I am optimistic that there will be. We have had a few situations that we bid on and have come close on. We are trying to be as aggressive as we can on our bidding.

But even apart from bidding and owning the assets, what are the opportunities to lease the assets to other operators, apart from Five Star? Is that something that could become a reality over the next three to six months?

Right. Well, that is actually what I was referring to was sale leaseback type transactions--

Okay.

--with other operators. The sentiment that we are seeing out there is that the larger players really don't want to do sale leaseback transactions, and for the foreseeable future, because you obviously have Emeritus buying them back, and you have, Brookdale would buy back as many as they could today.

And so it is going to be more the mom and pop and regional operators. And we have made proposals with the regional operators, to be honest NHP and Ventas, and some of the others have just been more aggressive, and willing to live with much smaller security deposits, or much less capitalized companies than we require. I guess we are not willing to go so much on the risk curve, that we are just a step away from taking on the operator's risk of those properties. So that tends to be why we are not winning a number of transactions with other third parties.

Okay. Fair enough. Thank you.

You are welcome.

We take our next question from Jerry Doctrow with Stifel Nicolaus. Please go ahead.

Thanks. Yes, actually a little bit on the same thing. David, I was wondering on the MOB stuff you are seeing out there in the environment. That has also been very competitive, whether there is a sort of general theme that works for you, whether you are on campus or off campus? I mean, more of your stuff I think that was acquired from HRPT is off-campus stuff. And giving a little more color there, maybe what the cap rates might be, or yields might be?

Sure. Well, there are a few differentiating factors between us and some of our peers, in that we are not willing to do any transactions that have a sale/land lease, or a paid restriction to us with a certain hospital system or hospital group, and as a result, a lot of the on-campus properties are ones that we are not willing to do, or it is just not the right situation. And besides, a lot of on-campus is going for the lowest cap rates.

So what we are finding is that the most opportunity for us are near campus, but off-campus. And some of the ones we are buying from HRPT and some of the ones we are seeing out there that are most, that work for us, are actually well-established standalone medical office buildings, that are affiliated with nearby hospital systems, but they are one-off, large medical office buildings.

And so from a cap rate perspective, we are able to see the cap rates in the high 7s, low 8 range. That is where I expect us to be able to do a number of transactions. What is also interesting too, is that in our existing portfolio, the very first property we did buy from HRPT, when we acquired it, it was 89% occupied. And it has gone up, and we signed up a couple of new tenants, and currently it is at 97% occupancy. I think the standalone medical office buildings are working for us.

Okay. And I think, kind of following up on the diversification issue, I thought found it interesting that you were talking about, Five Star not being your first choice on NewSeasons, and focused on diversifying, which I certainly agree with Tayo, I think would be beneficial for the stock. I guess my issue is whether there are other things, we cover Five Star as well, and I think Five Star has been encouraged from time to time, to simplify it's business structure.

So whether you could take the existing portfolio, and sort of move, whether it's the skilled nursing assets, or the rehab hospitals, whatever, to a new operator, Five Star gives you obviously, a public company, a public balance sheet, but it does create sort of the concentration risk. So is that sort of a discussion, that has had, or you think about, because I think it would benefit both companies candidly?

Well, periodically we do discuss some of those options. And a lot of the negotiations really can't come from the SNH side. They really have to be, Five Star has to make some strategic decisions if they want to exit some of those assets, and depending on the situation, they most likely would probably have to be compensated by somebody. The NewSeasons situation, you would probably have the reverse where NewSeasons paid Five Star to take over those leaseholds.

Five Star would probably want to be compensated by somebody to take over their leaseholds, and then we would have to approve such a transition. And then depending on who it is, we would probably want to encourage that. That is where the decision has to be driven from. We can't tell them you should, we would really like you to switch operators for these properties. It is just not something that we can force on a tenant.

Right. I mean, I think the point that is obvious to you guys already, is that there are some of those transactions, even if you were to take a regional tenant, that was much less well capitalized, I think the diversification, and their refocus on their core business would be beneficial for both sides. So that is just my editorial comment. I will let somebody else ask.

Okay. We do bid on other scenarios like even skilled nursing facilities, which is not our preferred investment property type, but if it was with, say 7 or 10 different operating companies, we would find that attractive because of the diversification, and we would be more aggressive to chasing a situation like that, than doing a transaction with one new tenant.

Okay. Thanks.

All right.

We will take our next question from Philip Martin with Cantor Fitzgerald, please go ahead.

Good afternoon.

Good afternoon.

Just a question on, if you are out there looking at investment opportunities in the senior living area, private pay senior living, are you finding that there are properties that you would like to have, that are underperforming because of the operator, and does the REIT legislation that was recently signed, allow you to maybe think differently now, about going after those opportunities, to try to affect some change operationally and benefit from any change you might be able to help provide? With you experience in the sector?

Yes, there are those situations out there. That would be a good appropriate use of the new legislation. And the REIT rules, we could hire almost any operator, including Five Star to operate where we take on the risk, Philip, of those properties.

We don't necessarily want to go into the senior living business ourselves, and keep the bottom line. Once it has stabilized we would probably look to do a sale/lease back transaction, but that is a way that we could get some initial improvement in the return on the asset, with us bearing the risk during that sell-up stage and stabilization.

Do you find that there is a higher percentage of what you would consider underperforming, or properties not performing up to their expectations on the senior living side out there? Or no?

No. Actually I would say that they are more than I would have expected out there that are underperforming today. And I am not sure it is fully captured in all the statistics, and I see statistics will have occupancy levels in the high 80s, low 90s.

But there are quite a few properties out there that are 60s and 70% occupancy, that are pretty decent properties. And I think they are fairly highly leveraged, so there may be opportunities out there to step in, save somebody from a debt becoming foreclosed on, and to improve the performance of those properties.

Okay. Okay. Thank you.

You are welcome.

(OPERATOR INSTRUCTIONS) We will take our next question from Kevin Ellich with RBC Capital Markets, please go ahead.

Hi, Kevin.

Good afternoon, guys, thanks for taking my questions. Last night Five Star mentioned there were about 100 assisted living units that are being converted to Alzheimer's units in 5 communities. Was this something that you had talked about previously, or is this something new? I can't remember.

Well, this has been ongoing as far as, I don't know that they have raised that before on a prior call, and we have not. I don't believe that it is because of the foray into buying the Wellstead in Minnesota, or in the [Summerford] properties, which all of those are predominantly Alzheimer's, but the demand for Alzheimer's care continues to significantly increase, and what they are finding is that it is very meaningful to be able to provide that service, in a decent-sized assisted living property.

So they have just gone through on a property by property basis, and identified areas where there is a demand for that service. And that is part of their capital improvement budgeting process that they have gone through.

Okay. And then if my memory is correct, I think the Wellstead on the assisted living side, the census was pretty low. Have they been able to increase that at all, do you know?

Not in my meaningful way. It is still hovering in the mid-60s range for the assisted living component. While the Alzheimer's still stays above 90% occupancy levels.

Okay.

I know that they have been trying to formulate a good marketing program, to encourage people to look at that, because, Wellstead has such a strong reputation as being known as an Alzheimer's facility, that people that are looking for assisted living that don't even seriously consider it.

But I know you have been to the property and several other people have toured it, and the assisted living units are at least twice the size of a typical assisted living unit, and there is a full kitchen. It is almost very much like having a full-fledged multi family apartment, one-bedroom apartment.

Okay.

And the rates are the same as if it was a traditional assisted living unit. And I don't think that is known out there. I think the marketing effort is still being ramped up for that.

Okay. Okay. And then on the 20 properties that you are going to close on tomorrow. Is that paid for in cash, or are you going to use the debt for that?

No, that will be all in cash.

In cash. Okay. And where you have two senior living properties that you acquired, did you say they were in Birmingham?

Yes.

Just wondering if we could get a little bit more detail on that. What is the census, is it all AL, or any independent living in that?

It is all AL, with an Alzheimer's component in one of the buildings. They are each about 62 units per building, and the occupancy levels are in the mid-90% for each location.

And what is interesting about this is these two properties have been under agreement for a long time, and they required HUD approval, and the process was just so painful that ultimately the decision was made to just pay off the HUD loans. And we could have walked at any points along the way if we didn't like the performance of the properties. So for a good two years, they have been running at the mid to high-90% occupancy levels, and maintained and improved the bottom line performance. These are desirable assets.

Okay. And lastly, you have seen any economic impact on the wellness facilities that you have acquired a couple of quarters ago?

Not any consequence. They are still up around the 1.9 times coverage, and membership has held pretty steady.

Excellent. Thanks guys.

You are welcome.

And gentlemen, at this time, there are no further questions. Mr. Hegarty, I will the turn the conference back over to you for closing comments.

Thank you very much, everyone. Rick and I will be at the NIC conference in Chicago in September, as well as UBS is having a Healthcare REIT and Operator Conference in Chicago on September 9th. We will be attending both, and readily available to talk with anybody who would like to meet with us. Thank you. Have a good day.

This will include the Senior Housing Properties Trust second quarter 2008 financial results conference call. We thank you for your participation, and you may disconnect at this time.