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The Situation
In January 2000, Roush & Associates was engaged by a New York Stock Exchange real estate investment trust (REIT) to "turn around" its portfolio of three distressed nursing homes.
These facilites were faltering in three significant areas:
- They were underperforming financially
- They had lower-than-desirable occupancy rates
- They had major quality of care issues
Positive Results for the Client
Our team of experts spent time at the facilities, determined the factors responsible for the decline, put corrective measures in place, and engineered their rebirth as state-of-the-art healthcare centers. By November of the same year—11 months later—we had materially reversed their serious business problems.
Our results:
- Financial performance was greatly enhanced. Fourth quarter 2000 revenues increased by 20 percent over the same period in 1999. In addition, we moved them from $500,000 in negative EBITDA at the end of 1999 to $3.66 million EBITDA in 2001.
- Overall occupancy increased. Occupancy rose from 89 percent per diem to greater than 95 percent per diem.
- Quality of care improved dramatically. Two of the three facilities received deficiency-free surveys, a significant accomplishment in a short period of time.
Positive Results for Roush
This assignment—our first turnaround—clearly established our expertise in this area.
As a result of our outstanding performance,
- The REIT is partnering with us on a 50/50 joint venture to buy a fourth facility
- The REIT now leases the three original facilities to us and
- We are currently engaged in a similar turnaround assignment for another client
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