J Darrin Gross

I'd like to ask you, Jerry Vinci, what is the BIGGEST RISK?

Jerry Vinci

I would definitely lean on the Senior Living industry for sure. To answer that question. I think the biggest risk for sure, and this goes back to our capital facing services would just be the operator selection. You know, a lot of people might think it's like cap rate compression or labor shortages or even like regulatory changes, but, you know, those are obviously all real. But that that the risk is that you partner with an operator that can't actually do what they said they're going to do in a specific market where that assets located. You know, again, you've got to look at like, what are the competitors doing in that space and and it's, it's the dominant risk, in my opinion, just because the consequences compound for years before they actually fully show up. I What else can I say about that? Yeah, like operator I guess, kind of what I was just describing about the different asset value depending on occupancy. You know, operator failure doesn't always look like operator failure. You know, when it comes to senior living, occupancy can drift because, you know, you're dealing with older residents who, for any given reason, can can leave or move out. But, uh, you know, a building can document see, can drift from, say, like 92% to 82% over 18 months. But nobody can explain why. And that's that goes back to something like, maybe the aggregator dependency on those third party leads that are coming in, or maybe their reputation has decreased slightly over that time period, but nobody's really paid attention. But you know, going from a 4.8 star rating to a 4.3 or something like that holds more weight than people might realize, and even even like something might not show up on a quarterly report, it might show up in a larger report, but they're not. They're not seeing it because it's, it's a slow drip, you know. So I think, just from from a risk assessment perspective, it's always going to come back to that operator and how that operator is able to maintain or increase performance of that asset.

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