SQLC

SQLC has been increasing its managerial staff and investing in information technology resources.

On May 23, 2018, SQLC and Lifespace Communities (BBB/Stable) entered into a nonbinding letter of intent for a proposed affiliation.

Profitability has been historically good, but was compressed in fiscal 2017 as a result of expenses allocated to Querencia as part of SQLC's transition to a management company as SQLC added overhead to increase its management capabilities while Querencia continued to pay management fees to Greystone during the contract run out period.

The increased SQLC managerial overhead is expected to generate savings in the second half of 2018.

Revenue only coverage should grow as savings are generated by SQLC's new management infrastructure, but continued management cost overruns would be viewed negatively.

In addition to Edgemere, SQLC owns and operates four CCRCs in Texas and one in Carmel, IN, with a total of 1,858 CCRC units.

SQLC and Edgemere historically considered bringing SQLC's Mirador community into its obligated group.

Edgemere's day-to-day operations had been managed by Greystone and SQLC since 1998 when the community was founded.

Interim period profitability was also negatively impacted by the duplication of management fees during the transition from Greystone and SQLC to Seniority, Inc.