Originally Posted by
Meister
So, it seems Ferg has the magic touch, and may have made a believer out of mistaTea? Even more magical, turned these retirement village threads into actual good reading again?! Truly amazing!
Do you think OCA is undervalued now mistaTea or the jury isn't out yet?
In fact, is Ferg himself a believer or just couldn't stand to see financial statements getting butchered? :p
I have previously focused on a couple of key risks, namely that the revolving door does need to keep spinning and not have a shock event stall the pipeline. Covid lows were a great buying opportunity but did represent a very valid risk that covid running rampant inside could destroy the pipeline for years by scaring people away. The lows we are seeing now don't seem to represent the same type of seriously existential risk in my opinion, negative property sentiment and potential oversupply on the operator side can only go so far.... however;
The other risk I was focused on was that the DMF does actually need to cover expenses. If it doesn't and part of that needs topping up from the rest of the ORA (and I think that is what you were confirming above mistaTea?), that seems to make things far more reliant on increasing sales prices than would be ideal. The operators have some lag in the entire occupancy period to play with - the sales now only need to beat the prices from however many years ago the recently departed occupant purchased at, but if we have a long enough sustained period of property market stagnation, this could well come into play?
OCA have a larger DMF percentage than standard, which presumably could make them more resilient IF their costs are under control and IF that isn't enough to deter sales...