The approval room
The operator builds the budget. The owner approves the line.
In a third-party management structure the person who runs the building is not the person who funds this. So the case has to close in the approver’s language: what it does to NOI at this property, and what that NOI does to debt service coverage. Nothing below is a result we have measured — each line is filled in from the owner’s own rent roll, care records, payroll and ledger.
Line 01
Care revenue billed at the governed acuity level
Ungoverned today: Acuity is reassessed in the clinical record and the billing system keeps invoicing the prior level, because no definition says which system declares the level that bills.
Line 02
Revenue occupancy, on one declared definition
Ungoverned today: Two systems publish two occupancy readings and the budget is built on whichever one the preparer opened first.
Line 03
Care hours staffed against governed census
Ungoverned today: A signed deposit is counted as occupied, so hours are scheduled and paid against a bed nobody has moved into.
Line 04
Agency and overtime premium above the governed plan
Ungoverned today: Scheduling, timekeeping and payroll are reconciled after the pay period, by hand, once the premium is already spent.
Line 05
Ancillary and level-of-care changes captured in the period they occurred
Ungoverned today: The change is documented clinically and rebilled late or never, and the variance is explained as a timing difference.
Line 06
Bad debt and AR drift attributable to disputed charges
Ungoverned today: A charge nobody can trace to a definition and an approver is the charge a family disputes and the operator writes off.
Line 07
Net effect on property NOI
Ungoverned today: Read 30 to 45 days after the month closed, by which time the shift was worked, the unit sat empty and the care level was never billed.
Lines 1 through 6 are the owner’s figures, not ours. We supply the definitions, the source authority and the lineage that make each line traceable to a decision and an approver — the amounts come from the property.
What that does to debt service coverage
Debt service coverage ratio = property NOI ÷ annual debt service.
Coverage is usually tested at the property, on trailing NOI, against a covenant the owner has already signed. That makes an NOI line item and a covenant test the same conversation — an amount that never reaches NOI never reaches coverage, and a definition nobody governs is where the amount goes missing.
Illustrative arithmetic on stated assumptions
One 100-unit assisted living community. Annual debt service of $1,200,000. Trailing NOI of $1,560,000, which tests at 1.30×.
If the owner’s own worksheet puts $120,000 of annual NOI on the lines above — care levels billed in period, hours staffed against governed census, occupancy read on one definition — NOI of $1,680,000 tests at 1.40×.
That is division, not evidence. The assumptions are stated so the owner can replace them; substitute the property’s own debt service and NOI and the arithmetic answers for that property instead of this one.
Take the worksheet and check the arithmetic yourself
One page. Lines 1 through 8 build the annual effect at a single property from your rent roll, care records and payroll; line 11 turns that into the coverage test. Lines 9 and 10 are deliberately blank — that is where commercial terms go, and those are not published. The spreadsheet calculates; every amount in it is yours.
XLSX · one page · blue cells are yours to fill in
No email is required and nothing is gated. If the arithmetic does not clear the covenant on your own numbers, that is the answer, and we would rather you find it on your own sheet than in a briefing.
No operator runs SeniorCRE in operator production today, no third-party integration is live in operator production, and no operator outcome is claimed or independently validated. Figures above are arithmetic on the assumptions shown. Commercial terms are not published; they are provided under NDA in a written quote scoped to the portfolio.
This close is written for the approver as much as the operator — the owner and operator page sets out who governs the record and who sets the standard it must meet. Read: owner and operator
Govern the truth before you automate the decision — and before you ask an owner to fund it.
Bring the worksheet to a briefing