Sabra Health Care REIT, Inc. (SBRA): Business Model Canvas [10-2024 Updated]
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Sabra Health Care REIT, Inc. (SBRA) Bundle
Welcome to an insightful exploration of the business model canvas for Sabra Health Care REIT, Inc. (SBRA). This real estate investment trust specializes in acquiring and managing healthcare-related properties, ensuring a stable income through strategic leasing and partnerships. Discover how Sabra's robust framework, including key partnerships, value propositions, and revenue streams, positions it as a leader in the healthcare real estate sector.
Sabra Health Care REIT, Inc. (SBRA) - Business Model: Key Partnerships
Third-party operators of healthcare facilities
Sabra Health Care REIT, Inc. collaborates with numerous third-party operators to manage its healthcare facilities. These operators are responsible for the day-to-day operations and management of the properties, ensuring they meet regulatory standards and provide quality care. As of September 30, 2024, Sabra's portfolio included 373 properties, with a significant number operated by third-party healthcare management companies.
Joint venture partners
Sabra engages in joint ventures to expand its portfolio and share risks associated with investments. As of September 30, 2024, the company had investments in two unconsolidated joint ventures, which allow for diversified investment strategies and access to additional capital. The financial contributions and returns from these joint ventures enhance Sabra's operational capacity.
Financial institutions for funding
Financial institutions play a crucial role in providing capital to Sabra. The company has secured various financing options, including revolving credit facilities and term loans. As of September 30, 2024, Sabra had $947.8 million in liquidity, consisting of unrestricted cash, available borrowings under its Revolving Credit Facility of $847.4 million, and cash from forward sale agreements.
Regulatory bodies for compliance
Compliance with regulatory bodies is essential for Sabra's operations. The company must adhere to guidelines set forth by entities such as the Centers for Medicare & Medicaid Services (CMS) and state health departments. Changes in regulations, such as the final rule on minimum nurse staffing requirements issued on April 22, 2024, impact operational strategies and resource allocation.
Real estate brokers for acquisitions
Real estate brokers are vital for identifying and facilitating property acquisitions. Sabra actively engages with brokers to expand its portfolio strategically. In the nine months ending September 30, 2024, Sabra's total real estate investments at cost reached approximately $5.7 billion.
| Partnership Type | Details | Financial Impact |
|---|---|---|
| Third-party Operators | Management of healthcare facilities | Supports revenue generation through operational efficiency |
| Joint Venture Partners | Two unconsolidated joint ventures | Diversifies investment risks and enhances capital access |
| Financial Institutions | Liquidity of $947.8 million | Facilitates acquisitions and operational funding |
| Regulatory Bodies | Compliance with CMS and state regulations | Affects operational strategies and funding allocation |
| Real Estate Brokers | Facilitation of property acquisitions | Contributes to portfolio growth and valuation |
Sabra Health Care REIT, Inc. (SBRA) - Business Model: Key Activities
Acquiring healthcare-related real estate
As of September 30, 2024, Sabra Health Care REIT, Inc. owned a diversified portfolio comprising 373 real estate properties, with a total real estate investment at cost of $5.699 billion. This includes:
- Skilled Nursing/Transitional Care: 241 properties, 26,769 beds, $3.051 billion
- Senior Housing - Leased: 43 properties, 3,473 beds, $573.3 million
- Senior Housing - Managed: 68 properties, 6,588 beds, $1.487 billion
- Behavioral Health: 18 properties, 1,164 beds, $479.2 million
- Specialty Hospitals and Other: 15 properties, 392 beds, $225.5 million
Leasing properties to operators
During the nine months ended September 30, 2024, Sabra recognized $285.4 million in rental income, a slight increase from $283.2 million in the same period in 2023. The revenue from rental and related revenues includes:
- Incremental revenue from capital expenditures: $2.4 million
- Annual rental increases: $1.7 million
- Increases from properties transitioned to new operators: $0.5 million
Managing investments in joint ventures
Sabra's investments in unconsolidated joint ventures as of September 30, 2024, included:
| Property Type | Number of Properties | Ownership | Book Value (2024) | Book Value (2023) |
|---|---|---|---|---|
| Sienna Joint Venture | 12 | 50% | $115.3 million | $119.7 million |
| Marlin Spring Joint Venture | 4 | 85% | $15.5 million | $17.1 million |
Evaluating and executing capital improvements
As of September 30, 2024, Sabra had a commitment of approximately $15 million for future capital and other expenditures associated with facilities leased under triple-net operating leases. This includes:
- Directly resulting in incremental rental income: $12 million
- To be spent over the next 12 months: $5 million
Ensuring compliance with REIT regulations
To maintain REIT status, Sabra is required to distribute at least 90% of its annual REIT taxable income. During the nine months ended September 30, 2024, Sabra paid $209.2 million in dividends on its common stock. The board of directors declared a quarterly cash dividend of $0.30 per share, payable on November 29, 2024, to stockholders of record as of November 15, 2024.
Sabra Health Care REIT, Inc. (SBRA) - Business Model: Key Resources
Diverse real estate portfolio (373 properties)
As of September 30, 2024, Sabra Health Care REIT, Inc. owned a diverse portfolio consisting of 373 properties across various healthcare sectors. This includes:
- 241 Skilled Nursing/Transitional Care facilities
- 43 Senior Housing - Leased properties
- 68 Senior Housing - Managed properties
- 18 Behavioral Health facilities
- 15 Specialty Hospitals and Other facilities
The total real estate investments at cost amounted to approximately $5.70 billion, with net real estate investments reported at $4.57 billion after depreciation.
Financial assets (loans and equity investments)
Sabra's financial assets include loans receivable and preferred equity investments totaling approximately $451.3 million. The breakdown of loans receivable as of September 30, 2024, is as follows:
| Investment Type | Principal Balance | Book Value | Weighted Average Interest Rate |
|---|---|---|---|
| Loans Receivable | $391.7 million | $388.2 million | 7.8% |
| Preferred Equity Investments | $59.6 million | $59.8 million | 10.9% |
These investments provide a steady stream of income, contributing significantly to the overall financial performance of the company.
Experienced management team
Sabra Health Care REIT benefits from a seasoned management team with extensive experience in healthcare real estate investment and operations. The leadership has a proven track record in managing and optimizing healthcare properties, ensuring effective tenant relationships and operational efficiencies.
Strong relationships with tenants
Sabra maintains robust relationships with its tenants, which is critical for ensuring stable rental income. As of September 30, 2024, no single tenant accounted for more than 10% of total revenues, indicating a diversified tenant base that mitigates risk.
Access to capital markets
As of September 30, 2024, Sabra had approximately $947.8 million in liquidity, comprising:
- $63.0 million in unrestricted cash and cash equivalents
- $847.4 million available under the Revolving Credit Facility
- $37.4 million from shares under forward sale agreements
This access to capital markets enables Sabra to fund acquisitions, capital expenditures, and maintain operational flexibility.
Sabra Health Care REIT, Inc. (SBRA) - Business Model: Value Propositions
Reliable income generation through lease agreements
Sabra Health Care REIT, Inc. (SBRA) generates a significant portion of its revenue through long-term lease agreements with healthcare facilities. As of September 30, 2024, the company recognized total revenues of $851 million, with rental and related revenues contributing substantially to this figure. The company operates under a triple-net lease structure, which ensures that tenants are responsible for property taxes, insurance, and maintenance, thus providing SBRA with stable and predictable cash flows.
Diversified investment portfolio in healthcare
As of September 30, 2024, SBRA's investment portfolio consists of 373 real estate properties across various healthcare sectors, including skilled nursing, senior housing, and behavioral health. The total real estate at cost is approximately $5.7 billion, with net real estate investments amounting to $4.57 billion. This diversification mitigates risk and enhances the company's ability to withstand fluctuations in specific market segments.
| Property Type | Number of Properties | Number of Beds/Units | Total Real Estate at Cost (in thousands) | Total Real Estate Investments, Net (in thousands) |
|---|---|---|---|---|
| Skilled Nursing/Transitional Care | 233 | 26,330 | $2,992,712 | $2,405,895 |
| Senior Housing - Leased | 39 | 3,319 | $512,037 | $409,846 |
| Senior Housing - Managed | 68 | 6,588 | $1,487,337 | $1,179,792 |
| Behavioral Health | 18 | 1,164 | $479,189 | $402,671 |
| Specialty Hospitals and Other | 15 | 392 | $225,498 | $173,981 |
Long-term tenant relationships ensuring stability
SBRA maintains long-term relationships with its tenants, which enhances revenue stability. The weighted average remaining lease term across the portfolio is approximately 13 years, providing assurance of income over an extended period. Furthermore, no single tenant relationship accounts for 10% or more of total revenues, demonstrating a well-balanced revenue stream and reduced reliance on individual tenants.
Expertise in healthcare real estate management
Sabra's management team possesses extensive experience in healthcare real estate, enabling the company to effectively navigate the complexities of this sector. This expertise allows for strategic acquisitions, operational efficiencies, and enhanced tenant services. The company has committed approximately $15 million for future capital expenditures to improve its facilities, which is expected to result in incremental rental income.
Commitment to maintaining REIT status with attractive dividends
To maintain its status as a Real Estate Investment Trust (REIT), SBRA is required to distribute at least 90% of its taxable income as dividends. For the nine months ended September 30, 2024, the company paid dividends totaling $209.2 million. As of October 31, 2024, SBRA declared a quarterly cash dividend of $0.30 per share, reflecting its commitment to delivering attractive returns to shareholders while adhering to REIT regulations.
Sabra Health Care REIT, Inc. (SBRA) - Business Model: Customer Relationships
Long-term lease agreements with tenants
Sabra Health Care REIT, Inc. maintains long-term lease agreements with its tenants, which includes 373 properties across various healthcare segments. As of September 30, 2024, the future minimum rental payments from these properties under non-cancelable operating leases are projected to be approximately $2.91 billion, with significant payments scheduled as follows:
| Period | Minimum Rental Payments (in thousands) |
|---|---|
| October 1 through December 31, 2024 | $92,198 |
| 2025 | $371,685 |
| 2026 | $358,650 |
| 2027 | $342,012 |
| 2028 | $319,885 |
| Thereafter | $1,422,310 |
Regular communication and support for operators
Sabra emphasizes regular communication with its operators, ensuring they receive consistent support. This includes ongoing discussions regarding facility performance and operational needs, which is critical for maintaining tenant relationships and ensuring compliance with lease agreements. The company provides resources to help operators optimize facility management and resident care.
Performance monitoring of tenant facilities
Performance monitoring is a key aspect of Sabra's customer relationship strategy. The company regularly assesses the operational performance of its tenant facilities, which includes evaluating metrics such as occupancy rates and financial performance. For the nine months ended September 30, 2024, Sabra recognized $285.4 million in rental income, an increase from $283.2 million in the same period of 2023, indicating effective oversight and management of tenant performance.
Engagement in capital improvement discussions
Engagement in capital improvement discussions with tenants is vital for maintaining property value and tenant satisfaction. As of September 30, 2024, Sabra has approximately $15 million committed to future capital expenditures for improvements to its facilities leased under triple-net operating leases. These improvements are expected to enhance the quality of care provided at the facilities, thereby supporting tenant retention and satisfaction.
Transparent financial reporting to investors
Sabra commits to transparent financial reporting to its investors, providing regular updates on performance metrics and financial health. For the nine months ended September 30, 2024, the company reported total revenues of $520.9 million, with a net income of $80.0 million. This level of transparency helps build trust with investors and supports the company's overall business strategy.
| Financial Metrics | As of September 30, 2024 | As of September 30, 2023 |
|---|---|---|
| Total Revenues | $520.9 million | $484.1 million |
| Net Income | $80.0 million | $(3.4 million) |
| Rental Income | $285.4 million | $283.2 million |
| Resident Fees and Services | $207.7 million | $174.9 million |
Sabra Health Care REIT, Inc. (SBRA) - Business Model: Channels
Direct leasing agreements with healthcare operators
As of September 30, 2024, Sabra Health Care REIT, Inc. (SBRA) has a diversified portfolio of 373 properties, primarily leased to skilled nursing and transitional care facilities. The future minimum rental payments from these properties under non-cancelable operating leases are projected to be $2,906.74 million, with the breakdown as follows:
| Period | Future Minimum Payment (in thousands) |
|---|---|
| October 1 through December 31, 2024 | $92,198 |
| 2025 | $371,685 |
| 2026 | $358,650 |
| 2027 | $342,012 |
| 2028 | $319,885 |
| Thereafter | $1,422,310 |
Investor relations communications
SBRA maintains robust investor relations communications, including regular updates to shareholders. During the nine months ended September 30, 2024, the company paid dividends totaling $209.2 million, with a declared quarterly cash dividend of $0.30 per share on October 31, 2024, scheduled for payment on November 29, 2024.
Online presence for investor updates
SBRA actively engages with investors through its online platforms. As of September 30, 2024, the company reported approximately $947.8 million in liquidity, consisting of unrestricted cash and cash equivalents of $63.0 million, available borrowings under its revolving credit facility of $847.4 million, and $37.4 million related to shares outstanding under forward sale agreements under its ATM program. The ATM program allows for the sale of shares up to $500 million.
Industry conferences and networking events
SBRA participates in various industry conferences and networking events to enhance its visibility and connect with potential investors and partners. The company’s strategic focus on skilled nursing and transitional care facilities positions it favorably in industry discussions, particularly around reimbursement rates and regulatory changes affecting healthcare real estate investments.
Financial reporting through SEC filings
Financial transparency is a priority for SBRA, which files comprehensive reports with the SEC. For the nine months ended September 30, 2024, SBRA reported total revenues of $520.89 million and a net income of $80.02 million. The company’s total assets as of September 30, 2024, were valued at $5.37 billion, with total liabilities of $2.62 billion.
Sabra Health Care REIT, Inc. (SBRA) - Business Model: Customer Segments
Healthcare operators (nursing facilities, senior housing)
Sabra Health Care REIT, Inc. focuses on a diverse range of healthcare operators, including skilled nursing facilities and senior housing. As of September 30, 2024, the company owns 373 real estate properties, which includes:
| Property Type | Number of Properties | Number of Beds/Units | Total Real Estate at Cost ($ in thousands) | Investments, Net ($ in thousands) |
|---|---|---|---|---|
| Skilled Nursing/Transitional Care | 233 | 26,330 | 2,992,712 | 2,405,895 |
| Senior Housing - Leased | 39 | 3,319 | 512,037 | 409,846 |
| Senior Housing - Managed | 68 | 6,588 | 1,487,337 | 1,179,792 |
| Behavioral Health | 18 | 1,164 | 479,189 | 402,671 |
| Specialty Hospitals and Other | 15 | 392 | 225,498 | 173,981 |
Investors seeking dividend income
Sabra Health Care REIT aims to attract investors by offering reliable dividend income. For the nine months ended September 30, 2024, the company paid dividends totaling $209.2 million on its common stock. The quarterly dividend declared on October 31, 2024, is $0.30 per share, scheduled for payment on November 29, 2024.
Joint venture partners in real estate
Sabra engages in joint ventures to expand its portfolio and share risks associated with real estate investments. As of September 30, 2024, the company has investments in two unconsolidated joint ventures, which include:
| Joint Venture | Property Type | Number of Properties | Ownership (%) | Book Value ($ in thousands) |
|---|---|---|---|---|
| Sienna Joint Venture | Senior Housing - Managed | 12 | 50 | 115,299 |
| Marlin Spring Joint Venture | Senior Housing - Managed | 4 | 85 | 15,512 |
Financial institutions providing loans
Sabra maintains relationships with financial institutions for funding through loans. As of September 30, 2024, the company’s loans receivable included:
| Loan Type | Quantity | Principal Balance ($ in thousands) | Weighted Average Contractual Interest Rate (%) | Maturity Date |
|---|---|---|---|---|
| Mortgage | 3 | 335,600 | 7.7 | 11/01/26 - 06/01/29 |
| Other | 11 | 56,085 | 7.9 | 12/31/23 - 08/31/33 |
Regulatory agencies overseeing healthcare compliance
Sabra operates within a heavily regulated environment, necessitating compliance with various healthcare regulations. The company’s operations are influenced by reimbursements from Medicare, which accounted for approximately 39.6% of total revenues for the nine months ended September 30, 2024. The reimbursement rates are set by the Centers for Medicare & Medicaid Services (CMS), which issued a final rule on July 31, 2023, estimating a net increase of 4.0% in Medicare rates for skilled nursing facilities.
Sabra Health Care REIT, Inc. (SBRA) - Business Model: Cost Structure
Operating expenses for property management
For the nine months ended September 30, 2024, Sabra Health Care REIT reported total operating expenses of approximately $113.1 million. This figure includes costs associated with property management across its diverse portfolio of healthcare-related real estate properties.
Interest expenses on financing
During the same period, the company incurred interest expenses amounting to $29.5 million for the three months ended September 30, 2024, and $87.2 million for the nine months ended September 30, 2024. These expenses reflect the costs of borrowing and are integral to the company’s overall financing strategy.
Depreciation of real estate assets
Sabra reported depreciation and amortization expenses of $42.7 million for the three months ended September 30, 2024, and $127.3 million for the nine months ended September 30, 2024. This depreciation accounts for the wear and tear on its real estate assets over time.
Administrative costs (salaries, legal fees)
General and administrative expenses for the nine months ended September 30, 2024, totaled approximately $37 million. This figure encompasses salaries, legal fees, and other administrative costs necessary for the operation of the business.
Maintenance and capital improvement costs
For the nine months ended September 30, 2024, Sabra reported aggregate capital expenditures of $39.2 million. These expenditures include maintenance and capital improvements necessary to uphold the quality of the properties within its portfolio. The company also has a commitment of approximately $15 million for future capital expenditures related to its facilities.
| Cost Category | Amount (in millions) | Notes |
|---|---|---|
| Operating Expenses for Property Management | $113.1 | For the nine months ended September 30, 2024 |
| Interest Expenses | $87.2 | For the nine months ended September 30, 2024 |
| Depreciation of Real Estate Assets | $127.3 | For the nine months ended September 30, 2024 |
| Administrative Costs | $37.0 | For the nine months ended September 30, 2024 |
| Maintenance and Capital Improvement Costs | $39.2 | Aggregate capital expenditures for the nine months ended September 30, 2024 |
Sabra Health Care REIT, Inc. (SBRA) - Business Model: Revenue Streams
Rental income from leased properties
The primary source of revenue for Sabra Health Care REIT, Inc. is rental income generated from its leased properties. For the three months ended September 30, 2024, the company recognized approximately $94.6 million in rental income, which marked an increase from $93.1 million in the same period of the previous year. This growth was attributed to several factors, including acquisitions and lease amendments.
Resident fees and services from managed facilities
In addition to rental income, Sabra earns revenue from resident fees and services at its managed facilities. For the nine months ended September 30, 2024, the company recognized $207.7 million in resident fees and services, up from $174.9 million during the same period in 2023. This increase of $32.8 million resulted from improved occupancy rates and the transition of several facilities to managed operations.
Interest income from loans receivable
Sabra also generates interest income from its loans receivable investments. For the nine months ended September 30, 2024, the company recognized $27.7 million in interest and other income, compared to $26.0 million in the prior year. This increase was mainly driven by new investments and increased funding for existing loans.
Preferred equity returns from investments
Preferred equity investments contribute to Sabra's revenue streams as well. As of September 30, 2024, the company reported $59.6 million in book value for preferred equity investments, generating returns at an average rate of 10.9%.
Proceeds from sales of real estate assets
Proceeds from the sale of real estate assets also form part of Sabra's revenue model. For the nine months ended September 30, 2024, the company realized net proceeds of approximately $40.5 million from the sales of real estate.
| Revenue Stream | Amount (in millions) | Details |
|---|---|---|
| Rental Income | $94.6 | Q3 2024 |
| Resident Fees and Services | $207.7 | 9 months ended Sep 30, 2024 |
| Interest Income | $27.7 | 9 months ended Sep 30, 2024 |
| Preferred Equity Returns | $59.6 | Book Value |
| Proceeds from Sales | $40.5 | 9 months ended Sep 30, 2024 |
Article updated on 8 Nov 2024
Resources:
- Sabra Health Care REIT, Inc. (SBRA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Sabra Health Care REIT, Inc. (SBRA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Sabra Health Care REIT, Inc. (SBRA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.