Synario Accelerates Real Estate Investment Trust Financial Modeling and Analysis

Sabra Case Study

Synario Accelerates Real Estate Investment Trust Financial Modeling and Analysis

9min Read

Take-Aways from Sabra's use of Synario

  • Sabra, a healthcare-focused real estate investment trust (REIT), experienced frequent crashes when modeling within their spreadsheet-based financial model due to the model's size and complexity.
  • When searching for a financial modeling software solution, Sabra looked into Hyperion, Oracle, and Synario, finding that only Synario could model their most complex questions and challenges.
  • After implementation, Sabra looked at the results of their old spreadsheet-based model alongside outputs from Synario for three months. They found Synario to be 9x more accurate.
  • Sabra uses Synario's patented scenario manager to layer in property acquisitions and dispositions, analyzing and comparing different sets of assumptions and initiatives within the same financial model.
  • Sabra continues to adopt Synario across different departments. The accounting and executive teams have read-only access to Synario dashboards to help with decision-making and analysis.

CRASH — “Microsoft Excel has stopped working."

The last message you see before your financial model disappears into the black hole of dubiously recoverable temporary files.

Sarah Mazur, FP&A Manager, and Duncan Williams, Financial Analyst, from Sabra Health Care, REIT, were all too familiar with this message. After updating their intricate financial model, they would often come face-to-face with Excel's worst quality…

Excel critical financial model error

As spreadsheet-based financial models grow in complexity, the more likely they are to crash

However, Sarah and Duncan are savvy modelers. They knew to save their model regularly and create a series of backup versions, ensuring that they could revert to the last archived version if their current model crashed.

Their model consisted of “…4 different workbooks, and the main workbook had well over 20 different tabs containing sheets and sheets of data with columns going on to eternity," describes Duncan, “it was so much to manage and keep track of." Adding in different versions and scenarios, Sarah and Duncan quickly found their catalog of saved financial models growing out of control.

Yet, Sabra continued to call on Sarah and Duncan for further financial analysis, ever-increasing their list of model versions and scenarios. Various departments needed visibility and deep insight around the hundreds of multi-million-dollar real-estate properties they owned nationwide with the added ability to layer in and evaluate the impact of strategic initiatives (like acquisitions) on key outputs (like debt covenants).

Sabra's FP&A team needed a better solution to help them manage or eliminate their spreadsheet versions while responding faster to the scenario-based 'what-if' questions.

About Sabra Health Care REIT, Inc

Sabra is a healthcare real estate investment trust with properties in the senior housing, nursing, and specialty hospital categories. Their real estate portfolio includes over 400 properties across the United States and Canada.

Sabra Health Care REIT is focused on delivering unparalleled asset management capabilities while providing tenants with knowledgable local and regional operators.

You can learn more about Sabra by visiting www.sabrahealth.com.

Dynamic Modeling Intelligence platform provides 9x more accuracy than Excel modeling

Sarah, along with the Chief Accounting Officer (CAO), looked at various financial modeling software solutions, including Hyperion and Oracle. Unfortunately, after only a short phone call, Sarah knew that these solutions could not handle the complex analysis performed in her existing financial models. “Based on the presentation that was given to us, they couldn't figure out our stock compensation… the triple net lease rents were too basic as well," recalls Sarah.

After those introductory conversations fell flat, Sarah and the CAO abandoned their search, thinking that there just wasn't a solution that could match their needs. Then, through happenstance, they found Synario (Whitebirch at the time).

“We had been looking since I started at Sabra, and until Synario, we hadn't found [a software solution] to do everything we needed."
– Sarah Mazur, FP&A Manager, Sabra Health Care REIT, Inc.

Sarah saw the model flexibility she was looking for paired with an unparalleled model management system. So she signed up for a discovery call, and Sabra began its implementation soon after that.

Like many financial modelers, Sarah was skeptical that Synario could match the reports and analysis coming from her and Duncan's tried-and-true financial model. So Sarah and her team pulled double-duty to carefully watch their spreadsheet-based reports alongside the new outputs from her Synario model. What they found was that their old model was actually tried-and-mostly-true.

“We did manage our Excel model and the Synario model for three [monthly] models in a row, just to make sure there wasn't anything we missed and to compare and identify any variances. Of the variances we did note, 90% of the time it was because Synario was more accurate than Excel."

Sabra quickly found that Synario was precisely what they were looking for. The software could handle their most complex analysis, like its stock compensation, triple net leases, and cash rent payments, while maintaining a higher level of accuracy and manageability.

Manageable multi-dimensional scenarios broaden strategic visibility

Furthermore, Sarah and Duncan continue to find features within the software that surpass their expectations.

Both Sarah and Duncan agreed that the ability to build, toggle, and compare an unlimited number of financial scenarios within the same model is their favorite feature. “In Excel, if we wanted to run through 16 different scenarios, I would have to make 16 different changes and save the model to a new version 16 different times," describes Duncan. The ability to consolidate the building and analysis of those myriad scenarios inside of a single Synario model is “probably the best part," laughs Duncan.

Sarah further describes how Synario's toggled scenarios significantly benefit Sabra's property acquisition and disposition analysis, noting that the ability to “…toggle back and forth to see our financials and earnings with or without a particular investment" is a game-changer for the company. She elaborates more to say, “we've since built out even further so that we are able to adjust our equity assumptions based on if we do or do not do certain investments."

They also both agree that Synario reduces the need to make manual changes or updates to the model while allowing both Duncan and Sarah to “be in the program updating things simultaneously, which is more efficient."

How to Master Real Estate Financial Modeling

The Synario Financial Modeling Blog

Check out this Synario article on how to master real estate financial modeling.

In the article, we'll discuss common real estate financial modeling goals along with why many spreadsheet-based real estate financial models fall short during turbulent economic times.

Interactive stakeholder collaboration in the cloud broadens usability

Synario has improved Sarah's team's ability to support other departments, teams, and stakeholders at Sabra. For example, Sarah describes that using Synario's Explain feature not only helps her team, “…but also some of our finance executives (who have read-only access to Synario reports). They're able to see how a number is made up, which alleviates some of the questions we normally have to answer."

The Sabra accounting team also has read-only access to Sabra's financial model in Synario. “We rebuilt our cash flow statements to have the same flow as what our accounting team is used to," comments Sarah, “and they use that [report] to do our sources and uses extraction for rating agencies."

Stakeholder-financial-modeling-questions

Synario continues to provide value for Sabra's real estate financial modeling needs

Sabra is continually finding more value in its investment into Synario. When Sarah and Duncan were asked if they would recommend Synario to other Real-Estate Investment Trusts (REITs), they responded with a resounding yes.

“Anyone who has a really complicated gigantic financial model, [Synario] definitely helped simplify things and make our jobs easier," assured Duncan. Sarah also noted that “the customer service and support we had throughout was probably the best I've ever seen."

To find out more about how your organization could utilize Synario's agile financial modeling software, schedule a demo by clicking the button below.