Brookdale to restart expansion program

Launched in 2007 but tabled soon after, building plan to get going again in 2011

Email | Print By Erin Lawley

Brookdale Senior Living is reviving plans for a major capital expansion program and is more aggressively eyeing acquisitions, officials told analysts on a conference call Tuesday.

CEO Bill Sheriff said Brookdale, which narrowed its losses during the third quarter, is cautiously optimistic that the worst of the economic downturn is behind us and that opportunities for basic organic growth will only get better.

“We’re now in the process of re-evaluating all our on-hold expansion projects with the intention of restarting the program,” Sheriff said.

The Brentwood-based company had identified 60 projects in 2007 for a $550 million expansion program, but most were put on hold as economic conditions worsened. It has completed 19 expansions in the last three years.

The focus will likely be on adding Alzheimer's and skilled-nursing units, with some assisted-living expansion also likely. The company plans to provide more details three months from, with expansion projects likely starting in 2011.

On the acquisition front, Brookdale is in the process of closing the $204 million purchase of 21 properties from Sunrise Senior Living. Sheriff said the company is “well positioned to be a consolidator” as it sees more opportunities for acquisitions from companies that are struggling with their capital structure, debt maturities or ability to refinance.

Brookdale had about $159 million of unrestricted cash and cash equivalents and $171 million of restricted cash on its balance sheet at the end of the third quarter.

At about 10:30 a.m., the company’s stock (Ticker: BKD) was trading up almost 10 percent at $18.84 per share. Year to date, it has more than tripled.