The credit crisis is battering the two largest publicly traded operators of housing for the elderly. One of them, Sunrise Senior Living, is trying to stave off bankruptcy. The other, Brookdale Senior Living, is considered likely to resolve its short-term problems, but it faces a mountain of debt in the next few years.
Both companies, behemoths in a largely fragmented industry, say they are taking steps to reduce costs but have pledged to refrain from cuts that could impinge on the care they offer their residents. Brookdale manages 51,847 units of retirement and assisted-living housing, and Sunrise has 50,235 units.
Once the bellwether of the assisted-living industry, Sunrise Senior Living, based in McLean, Va., has violated certain covenants imposed by its lenders on leverage ratios and has a deadline of Jan. 31 to restructure its line of credit. One analyst, Jerry L. Doctrow, a managing director at Stifel Nicolaus & Company, said Sunrise might need to raise as much as $300 million next year.
New York Times