Land and Buildings issues letter to Brookdale Senior Living shareholders
Land and Buildings issued the following open letter to shareholders of Brookdale Senior Living: "On August 6th Brookdale's CEO Cindy Baier stated on the Company's second quarter conference call that Brookdale believes its "turnaround" is working and that all that is needed is more time. Unfortunately, the reality remains that based on all relevant measures this Board of Directors (the "Board") and management team have failed to create shareholder value. Equally concerning, they have demonstrated a lack of willingness to meaningfully engage with Land & Buildings or its director nominees around how to potentially reverse this half-decade-long trend of underperformance. In our view, when considering the credibility and troubling track record of this Board, the litany of value maximizing and shareholder-friendly options that Brookdale has refused to act on or implement speaks volumes, including: immediate destaggering of the Board, alowing shareholders to call a special meeting, holding annual meetings on a regularly scheduled basis, selling owned real estate as long as shares trade at a material discount to net asset value (NAV), hiring third-party operators to manage underperforming owned real estate, separating the Company into a REIT and operator or Sale of the Company, including since leases were restructured. We understand that Brookdale is currently seeking to replace its two retiring Board members with two new individuals. Rather than appoint Land & Buildings' two highly-qualified director candidates, Jay Flaherty and Jon Litt, who we believe have the deep healthcare, real estate and finance experience necessary to maximize value for all Brookdale shareholders, this Board has chosen to engage in a costly proxy contest in order to, in our view, preserve the troubling status quo. Brookdale is also in the process of hiring a new President - whose job specifications appear to be duplicative with those of the CEO - which we believe is an acknowledgement that the Board and management team have not been up to the task of turning around the Company. Given the current Board's apparent inability to act in the best interests of all shareholders and provide effective oversight of the Company, do we truly expect that these decisions should be solely left up to them? Conversely, one action Brookdale did take was to state on its recent earnings call that creating a separate Brookdale REIT alongside a Brookdale operator would not create value and that Green Street Advisors' analysis contained "fundamental flaws". Green Street is the preeminent independent research and advisory firm concentrating on the commercial real estate industry. Unfortunately, neither Brookdale nor its advisors have accepted direct invitations from Land & Buildings to sit down with us and Green Street to evaluate the analysis and help us understand exactly which elements of it are so misinformed. Further, Land & Buildings' conversations with Bank of America Merrill Lynch, one of Brookdale's advisors, prior to the bank being retained by the Company, seemed to indicate a very different view on the substantial value creation of a potential Brookdale PropCo/OpCo. We believe it is in the best interest of shareholders to have full transparency into Green Street's analysis to draw their own conclusions."