When will the long saga at Brookdale Senior Living come to an end? And hopefully a good end. Shareholders will have to show even more patience if real changes are to be implemented and ultimately prove successful.
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Great Debates
Three expert panelists tackled some of the greatest issues facing the seniors housing and care industry today. It will likely not be a smooth, stress-free ride to the top of the demographics mountain, and investors should be prepared to face down (and maybe solve) some of these issues.
Patience Will Be Necessary for Brookdale Shareholders
The painful saga of Brookdale Senior Living (NYSE: BKD) has been going on for more than a decade. Over that period of time, at its worst, shareholder value had plunged by 95%, the post-pandemic recovery has taken longer than it has for its peers, management has had to deal with a few activist revolts, the recent firing of its CEO and a lot of reputational damage. Most recently, the proxy battle by Ortelius Advisors to change up the Board took a lot of time and resources, and while the current management won, we often wonder if it will be a hollow victory for shareholders who voted with management.
We are getting tired of writing about the Brookdale saga, and perhaps as tired as you are reading about it. The problem is that what happens to Brookdale will have, or should have, a significant impact on the seniors housing industry. It remains the largest provider, it has the largest name
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The Great Debates of Senior Care
Panelists Took on the Greatest Issues Facing the Industry
As the senior care industry looks toward the future, consumers are redefining what care will look like, and investors will need to respond accordingly. Evolving consumer preferences will reshape demand, influence penetration rates, and challenge providers to offer options that are not only in need but also desirable and affordable. And there will almost certainly not be enough inventory to meet the incoming demand because most construction projects are not penciling out in the current environment. But, nobody knows exactly how much future demand will be mitigated by alternative options to seniors housing communities emerging and improving, and by rising rental rates for private pay seniors housing.
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The industry faces both an unprecedented opportunity to serve an exploding population of seniors plus great uncertainty around the future appeal and performance of the sector. So, the industry must grapple with
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its biggest issues and acknowledge future risks rather than beat the drum of “demographics is destiny.”
We thus hosted a webinar on July 17th dubbed “The Great Debates of Senior Care,” which was sponsored by Ziegler and included Dan Revie of Ziegler, Scott Hougham of Sage, and Michael Feinstein of Focus Healthcare Partners. They discussed the impending unit shortage, evolving consumer demands, the middle market, and building versus buying, among other key questions. We also polled the audience throughout the webinar to get their perspectives, too. Subscribers can watch the whole conversation here, or on the LevinPro LTC platform.
NIC MAP has estimated that the industry could face a shortage of 600,000 units or more by 2030. There is little debate that given low construction levels today, there will be a shortage in certain markets if development does not
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resume immediately, and the panelists agreed with that, but it will likely not reach the NIC estimate. If that is true, one of the audience members asked, “why aren’t people pulling a ‘Dan Baty’ and buying up everything they can if they believe we will have a unit shortage,” as Baty did at Emeritus? Feinstein says that there are some people currently doing this, as well as some in the process of forming capital to do so.
Future demand will be affected by the tastes and expectations of the future baby boomer consumer. The panelists talked about today’s seniors looking for a livelier community than what has been offered in the past. They want to be in a community that has easy access to local services, such as restaurants and shops. They want highend amenities that keep them active and entertained, like pickleball courts, bocce ball courts and putting greens. They want social engagement through programs, or perhaps intergenerational opportunities.
Those needs and desires will probably be met by the new, Class-A products recently or yet to be built, which could help increase the penetration rate for this class of assets. Hougham expects that labor costs will push rents to an unsustainable level for the average consumer, and one group will continue to afford it, and one won’t, which will lead to bifurcation. While the high-end of the market will attract developers, the middle market will be underserved.
Older product that is well maintained but is offered at a modest price point could be the answer to the middle market dilemma, but these communities will begin to fill up, and the ones that are already full will hike prices. So not only will Class-A communities be unaffordable, but increasingly so will other assets. Hougham noted that “the conversation about the middle market being something we need to address is growing old, and I don’t know that we’ve frankly made any or much progress on how to answer that. I don’t know that we’re going to answer the middle market problem.”
Maybe the answer lies in government intervention, with the expansion of Medicaid waiver programs or perhaps Medicare covering some form of seniors housing as a
means to promote wellness through safe housing, healthy meals, health care and socialization. On the private pay side, providing for the middle market will all but certainly come at the cost of profitability and returns. Plus, the consumer will get the bare bones of a room, meals, care and some basic activities. No pickleball or multiple dining venues. Maybe not even private rooms. Feinstein said that the challenge is fixed costs, and there should be “some economic incentive for the owner to invest in these buildings and to create that product, and the rent needs to be a certain amount above what the fixed cost is to make it relevant for any investor.”
Another key question has been whether to build or buy in response to the incoming demand. We polled the audience to get their opinion, and a majority, 81%, answered that buying is more feasible right now. It is hard to argue with that, given the high capital costs, high construction costs, arduous development process, fill-up risk and the projected sky-high rents needed to cover all of these costs. We posed that same question to our panelists, with Revie pointing out that the question is actually whether you should grow. The answer is yes, whether it be through acquisition or development. In his opinion, it is safer to buy, but he thinks owners are better off building in the long-term with the incoming demand.
For those acquiring, it may not matter what asset class they target, as long as they have a quality operator to meet the expectations they have for the return on their investment, because without a good operator, there are no returns. Revie brought up “tourist capital,” which comes into the industry looking for a higher return than can be achieved in other industries, tending to discount the importance of an operator, to their own detriment. Hougham noted that good operators tend to have relationships with those who are already established in seniors housing. These days, financial buyers that love a deal but have no operator are more common than an operator without a capital partner.
Otherwise said, getting capital is the easier part, with finding a quality operator being much more difficult. Smaller new entrants tend to get the leftovers of operators that usually are not as capable of managing
investor expectations. But, Hougham believes this new wave of capital is already doing a better job of partnering with industry veterans that have relationships than new capital had in past years.
Looking at Focus Healthcare Partners’ current activity, Feinstein noted that they had not developed in the past, but they are looking at it now and will be more active over the next few years through selective development. But Focus will continue to source aggressive acquisitions, which are faster to hit stabilization and can be purchased at a discount to replacement cost.
Whatever investors choose to do, Revie advises that they “need to listen to their customers, and can’t do what was done 20 years ago and say this is going to be successful, where you put a gazebo outside and say ‘there’s your outdoor activity, go sit in the gazebo.’ That’s not flying with today’s seniors.”
We asked the audience what they believe is seniors housing’s biggest detractor in the eyes of the consumer. The majority, 50%, said the cost is the primary issue. Another 38% pointed to the industry’s image. Smaller percentages cited the pandemic (4.8%), a lack of independence (2.4%) and other reasons (2.4%). Our panelists were also asked this question.
Hougham said that seniors housing is expensive, but the problem is that people have no idea what they are getting. If there was transparency, with a breakdown of rent, cost of care, and all other aspects, the consumer would be able to understand the cost, and to justify the value. Feinstein took a different route, arguing that the biggest detractor is the “reality of one’s aging and mortality. Nobody likes getting older, and I think moving into a seniors housing setting is just a natural reality, that’s the biggest challenge in the eyes of the consumer.” Revie thinks image is a big detractor, but the perception of senior care is changing, with the industry doing a good job at enhancing its image.
The panelists made a pitch to those considering entering the senior care industry, and offered some advice to new entrants. Revie’s pitch is that the industry is “fairly stable.
You’ve got the demand of seniors currently and that demand is only going to increase. Nobody’s expecting it to decrease. So, you would find more security than you might find in some other kind of boom-and-bust industries.”
However, like with any industry, there are risks to entering. Hougham pointed out that there are deficiencies and lawsuit-worthy occurrences in many buildings, since it is a challenging operating model. While the staff do the best they can, accidents happen, and mistakes are made. Additionally, the rental rate that one can get today does not equivalate to tomorrow’s rent. It can move without explanation (remember the inflationary days of just a few years ago), so that is something to consider.
Hougham warned that working in other industries has not prepared investors to thrive in seniors housing, as it is a complex industry that has elements of hospitality, multifamily and healthcare. New entrants that are inevitably coming will have to understand the history of the industry, the risks, be prepared to listen to consumers, and have a quality operating partner with which to grow.
SKILLED NURSING ACQUISITIONS
Many states’ decisions to increase their Medicaid rates for skilled nursing facilities has helped to lift the operations of most facilities, but the sector still sees a sharp divide between winners and losers, or those that have still not been able to turn operations around after the pandemic and inflationary period. They have tended to be, but have not always been, smaller owner/operators (the mom & pops), whereas larger, regional, more sophisticated operators have the scale, resources and expertise to maximize billing and limit expenses. Some not-for-profits have not been able to rein in expenses either and have chosen to focus their missions outside of skilled nursing. That leaves plenty of opportunities in M&A from those exiting operators and those needing to grow. Healthy liquidity and improving terms certainly help as well.
These factors combine to instigate a number of portfolio deals, of which Blueprint handled a few. One large portfolio of senior care facilities traded in Ohio and Kentucky, commanding a strong price, we believe, in
the process. Connor Doherty and Ryan Kelly advised on the sale of the 983-bed, seven-property portfolio, which features mostly skilled nursing beds and some assisted living units. At the time of sale, the portfolio was generating strong cash flow and benefitting from recent Medicaid rate increases and private room incentive payments, boosting both current income and long-term value. According to those familiar with the listing, the operating margin may have also topped 12% or 13% and must have generated significant cash flow.
The assets are within a 90-minute drive of one another, supporting operational and geographic synergy. Five of the buildings feature more than 100 beds, providing scale and market presence within their respective submarkets. So, it was an attractive opportunity, to say the least, and we believe it may have sold for more than $150,000 per bed given the strong operations, the improving reimbursement environment in both states and similar sales in the region according to our M&A database, LevinPro LTC
The buyer was an investor well-positioned to leverage the portfolio’s scale and regional footprint to expand its presence in Ohio’s seniors housing space.
Next, Blueprint was engaged by Michael F. Flanagan, the appointed receiver of Spartan Holdco, LLC, et al., and approved by the Oakland County Circuit Court to run a marketing process sourcing qualified overbids for the auction sale of the SKLD (Skilled Living and Development) portfolio. Dubbed Project Spartan, the portfolio comprises eleven skilled nursing and senior care facilities with 1,330 licensed beds located across the Detroit and Grand Rapids, Michigan MSAs.
The receiver was appointed in January 2024 and retained Hyper Care Management Solutions, LLC to operate the facilities. In January 2025, the stalking horse was selected and contracts were approved by the court, after which Blueprint was approved to begin its marketing campaign. Michael Segal and Daniel Waldhorn handled the transaction. There was considerable market interest with multiple qualified overbids, resulting in a competitive
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auction process that yielded nearly $20 million in additional gross sale proceeds above the stalking horse bid. Optalis Healthcare was the top bidder.
The portfolio was ultimately bifurcated with Optalis acquiring seven facility locations and the stalking horse acquiring four facilities. The result was the best opportunity for the stakeholders to realize the highest value for the purchased assets and allowed for the highest degree of execution certainty throughout the sale process. The facilities acquired by Optalis are SKLD Beltline, SKLD Leonard, SKLD Ionia, SKLD Bloomfield Hills, SKLD Wyoming, SKLD Muskegon, and SKLD Whitehall.
Optalis plans to invest in facility upgrades as needed, clinical training and new technology to ensure highquality outcomes and resident satisfaction. The company has now expanded to 41 locations in Michigan and Ohio with skilled nursing and assisted living, and is now the fourth largest skilled nursing provider in Michigan.
Next, not-for-profit Ballad Health divested its senior care
portfolio that was geographically concentrated in Eastern Tennessee and Southwest Virginia with the help of Segal, Waldhorn and Kyle Hallion. The portfolio included four assets with regional concentration along the border of Tennessee and Virginia, including three skilled nursing facilities and one assisted living community, totaling 402 licensed beds.
The portfolio presented an attractive opportunity for a regional-based owner/operator to achieve immediate scale with operational upside, while capitalizing on the strong referral relationships through the seller’s broader acute care health system. There were multiple competitive offers from a variety of investor profiles before the seller ultimately selected Ahava Healthcare, a New York-based owner/operator with an existing footprint in Tennessee. Ahava was selected for its patient-centric approach delivering quality care and its ability to transact and transition this portfolio. Upon closing, the seller and buyer entered into a new joint venture relationship, with the seller retaining a minority share in the portfolio.
Continuing with the portfolio deals, Strawberry Fields REIT, Inc. (NYSEAMERICAN: STRW) announced that it completed the acquisition of nine skilled nursing facilities comprising 686 beds in Missouri for $59 million, or $86,000 per bed. The REIT completed the acquisition using cash on hand and the issuance of approximately $2.0 million in OP Units of Strawberry Fields REIT LP to the seller.
Eight of the facilities were leased to Tide Group and were added to the master lease the company entered into in August 2024. The master lease remained materially unchanged other than resetting the lease expiration for a new 10-year period and includes two five-year tenant options. Additionally, this acquisition increased Tide’s annual rents tied to its master lease by $5.5 million and is subject to 3% annual increases.
The ninth facility was leased to an affiliate of Reliant Care Group LLC. The facility was added to the master lease the company assumed in December 2024. The master lease remained materially unchanged other than resetting the lease expiration for a 15-year period and includes two
10-year tenant options. Additionally, this acquisition increased Reliant’s annual rents by $600,000 and is subject to 3% annual increases. Through this acquisition, the REIT now has 17 skilled nursing facilities in Missouri and is continuing to look for additional opportunities. This acquisition also expanded its master lease relationships with existing relationships, including Tide and Reliant.
Another REIT, Standard Bearer Healthcare REIT (a subsidiary of The Ensign Group, NASDAQ: ENSG), made a couple of acquisitions, as well. First, Standard Bearer bought a 124-bed SNF in Duncanville, Texas, and will have a third-party manager operate it under a long-term, triple-net lease. Daniel Morris of Plains Commercial Real Estate arranged the off-market sale on behalf of a partnership of local investors. The building was leased to a national operator, which has managed the facility since its construction in 2009. The asset sold six weeks after execution of the purchase and sale agreement, with a long-term lease in place with the current operator. The Texas Broker of Record was DuWest Management Services, Inc.
In a separate transaction on the same day, Ensign acquired the real estate of Timber Springs Transitional Care in Boise, Idaho, through a subsidiary of Standard Bearer. The 120-bed SNF will be managed by Pennant Healthcare LLC, an Ensign-affiliated tenant.
One facility in Gastonia, North Carolina, sold for a high price, which we believe to be well over the national average of $83,800 per bed, according to the latest edition of The Senior Care Acquisition Report. Engaged by Ivy Healthcare Group, Evans Senior Investments facilitated the 50-bed facility’s sale to a regional owner/ operator. The facility had a strong operational foundation, and the incoming operator is expected to benefit from a favorable reimbursement environment plus the potential for further margin improvement through continued operational enhancements. The deal progressed quickly. An LOI was signed just 20 days after going to market, and closing occurred within 45 days of contract execution, wrapping up the entire process in less than four months.
Evans Senior Investments also arranged the sale of a
skilled nursing facility in Ohio on behalf of an institutional owner looking to exit the market. The facility comprises 88 beds and 20 independent living units, which served as a referral source for the nursing home. The buyer was a regional owner/operator that is actively expanding in Ohio. This is its second acquisition in the state within the past seven months.
Connor Doherty and Ryan Kelly of Blueprint handled another Ohio closing, selling a 61-bed skilled nursing facility located southeast of Columbus, Ohio. While the facility was experiencing operational challenges at the time of marketing, it had a long-standing reputation for providing quality care to the community. A smooth handoff in operations was a consideration in the transaction, and the buyer, a growing regional platform with values and an organizational approach aligned with those of the seller, was well-positioned to carry the legacy forward.
Toby Siefert of Senior Living Investment Brokerage got a skilled nursing sale in New Jersey over the finish line after survey issues caused a buyer switch-up. Built in 1980,
Medford Care Center is located in the town of Medford (about an hour east of Philadelphia) and features 180 beds on an 11-acre campus. Operations were not strong, and the private owner decided to sell. The facility was marketed in the spring of 2024 and received several bids. However, just prior to closing the transaction in December 2024, there was a health survey that resulted in an admissions ban, receivership and the original buyer losing interest.
With Siefert at the helm of the transaction process, the deal was put back together with a back-up buyer, albeit at a price discount due to the census decline, negative public image and deferred physical plant investment. That buyer was an investor with a skilled nursing presence in multiple East Coast states.
The Reis Team at Marcus & Millichap handled two separate closings in California. One involved the sale of a 60-bed skilled nursing facility in Northern California. The seller was an independent owner/operator looking to exit the business, and a well-established California-based
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investor purchased the property. The buyer intends to lease the facility to a growing California-based operator.
The Reis Team also arranged a lease transaction for an assisted living community in Southern California with 260 beds. The real estate is owned by a local investor, and the team sourced a growing California-based operator that was looking to expand its footprint in the region.
Healthcare Transactions Group (HTG) recently closed two transactions in Missouri and Maryland. The Show Me State deal involved Baptist Home of Independence, a 118-bed skilled nursing facility and 20-bed Residential Care Facility in the town of Independence. Built in 1977, the campus received a major renovation in 2021 and was 65% occupied.
Baptist Homes of Missouri, a faith-based not-for-profit organization based in Jefferson City, Missouri, had acquired the campus in 2021. It later engaged Healthcare Transactions Group to evaluate and recommend strategic options, leading to the not-for-profit’s decision to divest one of its senior care facilities for the first time. HTG’s marketing process resulted in multiple offers, with Baptist Homes selecting Prime Healthcare as the buyer. Prime has owned and operated other skilled nursing facilities in Missouri and maintains a regional office in Independence. Mark Davis and Steve Palmen handled the transaction.
The firm also arranged the sale of Sagepoint Nursing and Rehabilitation Center, a 170-bed skilled nursing facility in La Plata, Maryland. The one-story building is set on a 16.8acre campus and was built in phases in 1976 and 1992. In 2017, more private rooms and enhanced rehabilitation services were added to the building. Currently, there are 45 private rooms, 63 semi-private rooms, and occupancy is 90%. There is also an adult day care center, a medical office building with a Fresenius-operated dialysis center, and an assisted living community on the campus.
The owner, not-for-profit Sagepoint Senior Services, engaged HTG for more than two years to advise them through significant challenges, including its bankruptcy filing. HTG marketed the facility for sale amid ongoing
litigation, negotiated an interim lease with Green Tree Management Company (which has been managing the facility since April 2024), advised on a transition in Maryland’s Medicaid reimbursement methodology, and addressed a potential future subdivision of the campus to enable a new owner to qualify for HUD financing.
Green Tree Management Company emerged as the acquirer of the skilled nursing facility for an undisclosed price. SagePoint will continue to own and operate the remaining campus facilities and services. Mark Davis and Daren Cortes handled the transaction.
SENIORS HOUSING ACQUISITIONS
We are still waiting for higher quality, well-performing properties to represent a greater share of the M&A market, and we’re wondering at what values or cap rate levels would sellers choose to start selling those higher quality assets from a position of strength, rather than out of necessity. But we’re getting there, with a healthy handful of Class-A, stabilized deals this month.
Northbridge Companies and Taurus Investment Holdings recapitalized their portfolio of six Class-A seniors housing communities in the Boston suburbs for $227 million, or $447,700 per unit. The recap comes five years after the joint venture acquired the portfolio for approximately $200 million, or $394,500 per unit, which was Taurus’ first investment in the seniors housing sector. Welltower (NYSE: WELL) was the seller at the time, having been represented by the team at Newmark, which also helped facilitate debt for Northbridge. That same Newmark team represented Northbridge and Taurus in the 2025 recap.
Featuring 507 units of independent living, assisted living and memory care, the portfolio averages more than 15 years in age. The communities are located in Burlington, North Dartmouth, Newburyport, Needham, Plymouth and Tewksbury. No other details on their performance were disclosed, but we believe they were doing quite well. The buyer was also not disclosed.
Chicago Pacific Founders and its subsidiary, CPF Living Communities, bought a couple of Class-A independent
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living, assisted living, and memory care communities: Grand Living at Citrus Hills and Grand Living at Bridgewater. The pair of seniors housing communities have a combined total of 337 units, and are located in Hernando, Florida, and Coralville, Iowa, respectively. Grace Management will take over operations.
Dave Fasano, Ross Sanders, Cody Tremper and Mike Garbers of Berkadia led the deal on behalf of the sellers, PGIM Real Estate and Ryan Companies. Austin Sacco, Steve Muth, Garrett Sacco, and Alec Rosenfield secured acquisition financing through Freddie Mac
Grand Living at Bridgewater is situated just north of the University of Iowa campus in Iowa City, VA Medical Center, and Iowa City Municipal Airport. Built in 2018, it features 170 independent living, assisted living and memory care units. Grand Living at Citrus Hills affords convenient access to HCA Florida Citrus Hospital, multiple golf courses, and shopping centers. The property was built in 2017 and features 167 independent living, assisted living and memory care units. The property is the only
Class-A seniors housing community in the Homosassa Springs market.
Berkadia sold another well-performing property last month, this time featuring a 146-unit seniors housing community in the Cincinnati, Ohio MSA previously owned and originally developed by Indianapolis-based Leo Brown Group. Built in 2021 with 52 independent living, 64 assisted living and 30 memory care units, it was 95% occupied as of June 30, 2025, with the memory care portion fully occupied. A longtime owner of seniors housing communities bought the property on July 1, for an undisclosed price. Traditions Management will stay on as the operator.
Discovery Senior Living announced the recapitalization and closing of three Class-A, purpose-built, independent living, assisted living and memory care communities: Discovery Village at Naples (Naples, FL), Discovery Village at Sarasota Bay (Sarasota, FL) and Discovery Village at Castle Hills (Lewisville, TX).
All three communities were designed, funded, developed and launched through Discovery’s fully integrated platform including its in-house design and development department, capital markets and management capabilities. Opened within the last four years, the two IL communities total 273 units and have stabilized, while the newly opened 90-unit AL/MC community is quickly leasing.
As part of the transaction, Town Lane, a leading private equity real estate investor, acquired ownership of Discovery Village at Naples and Discovery Village at Sarasota Bay and recapitalized the Discovery Village at Castle Hills community.
Lee & Associates’ Senior Housing team, led by Robert Black, represented a Scottsdale, Arizona-based developer in the sale of a Class-A seniors housing community in Saint Paul, Minnesota. Developed by the seller in 2019, the building features 101 independent living, assisted living and memory care units. There was strong interest in the asset, generating multiple competitive offers. A
publicly traded healthcare REIT emerged as the ultimate buyer, acquiring the fully stabilized community for $28 million, or $277,200 per unit.
The Class-A closings continued when Ziegler was engaged by Marquee Capital, the real estate company affiliated with Marcus Investments, LLC, the Marcus’ family office, to sell its seniors housing community in Mason, Ohio. Built in 2020, BrightStar Senior Living of Mason sits on 3.2 acres with 41 assisted living and memory care units. The community was well occupied at 90%, and was operating at a good margin, particularly for a small, higher acuity community. It was developed by Marquee Capital and has been operated by BrightStar Senior Living since opening.
Community First Solutions , a leading not-for-profit healthcare organization, acquired the community (which will be rebranded as The Cottage of Mason), further establishing its presence in Ohio and marking its fourth expansion in less than two years. The community would provide complementary services to Community First’s
existing campus located nearby. Community First had purchased another seniors housing property in Mason in 2023. Built in 2017, Anthology of Mason has 68 assisted living and 33 memory care units and was rebranded as Montage Mason. Community First also purchased HarborChase of Beavercreek in Beavercreek, Ohio (Dayton MSA), in 2024. That community has 64 assisted living and 46 memory care units, and was rebranded as The Patterson.
The purchase price for the BrightStar community was around $225,000 per unit, with a cap rate near 7% based on trailing financials. Community First is funding the purchase with tax-exempt financing. Nick Glaisner handled the transaction.
Ziegler also announced its role as exclusive sell-side financial advisor to MedCore on the sale of Parkview on Hollybrook, a 189-unit rental CCRC in Longview, Texas. The property has been on a long road to stabilization. It was originally bought in a bankruptcy auction in 2016 for $20.7 million by Thrive FP when it was in the middle of development. 12 Oaks Senior Living brought it to the final stages of lease-up before MedCore bought the property in February 2020 and brought on Integral Senior Living to operate. Since then, Parkview on Hollybrook has stabilized and is now being sold to a publicly traded healthcare REIT. Eric Johnson and Dalton Esmond of Ziegler led the transaction.
One more high-quality, well-performing seniors housing community in northern Indiana found a new owner with the help of Ben Firestone, Connor Doherty and Ryan Kelly of Blueprint. The 100-unit assisted living/ memory care community appears to be Valparaiso Senior Village, which was built in 2018 across 88,000 square feet. It was originally operated by Arrow Senior Living and owned by the developer, The Argent Group LLC, but struggled with lease-up, only reaching 28% before the pandemic stopped new move-ins. So, ownership closed it in September 2020, and the building was sold vacant in May 2021 for $9.15 million, or $93,400 per unit, to an unidentified private equity firm. Evans Senior Investments handled the 2021 sale.
The buyer at the time planned to make significant renovations and brought in Priority Life Care to operate. StoryPoint Group later took on operations, and the community is currently generating positive cash flow and has a positive occupancy trajectory.
It thereby offered immediate yield along with further upside through continued census growth. After a competitive bidding process that saw five offers from REITs, owner/operators and not-for-profits, the seller elected to pursue a broader transaction, including the asset marketed by Blueprint as well as several additional assets within the portfolio.
Doherty and Kelly also advised on the sale of a 92unit assisted living community located just outside of Milwaukee, Wisconsin. The community’s positive cash flow, well-maintained physical plant and established referral base, plus some operational upside, made it an attractive prospect for investors.
We believe the asset was Clifden Court, which was acquired in 2017 by the private equity firm SHA Capital Partners for $9.12 million, or $99,100 per unit, according to LevinPro LTC’s M&A database. Built in 1998, with additions in 1999 and 2010, the community received a $1 million renovation from SHA shortly after the acquisition. It also stabilized operations shortly after that with its operating partner Encore Senior Living.
The community now appears to have changed its name to Eden Vista Greendale, falling under the management of Eden Senior Care. Eden owns other skilled nursing and assisted living properties in the area, so it is bringing regional expertise and scale to the building to take advantage of the operational upside. The current purchase price was not disclosed, but we imagine SHA was rewarded for both the management and physical plant improvements made over the years.
Blueprint leveraged its behavioral health team and expertise to boost a couple of prices for its clients. Andrew Sfreddo, Steve Thomes, Kory Buzin and Gunnar Raney represented a national REIT-affiliated owner/operator in North Carolina to sell its Greensboro seniors housing
asset that had faced prolonged operational difficulties and less-than-ideal census. It did not help that the local market was oversaturated. The underperforming community was marketed to both seniors housing and behavioral health buyers, as the facility layout and dynamics were conducive to inpatient substance abuse treatment and mental health in the local market.
Multiple offers came in from both buyer types, but the three distinct behavioral offers exceeded the seniors housing ones (at least one by over 20%), and the seller ultimately selected an owner/operator joint venture that Blueprint has closed with previously. Blueprint also advised both buyer and seller on municipal zoning challenges that arose while under contract.
In a similar deal, Sfreddo, Buzin, Thomes and Jacob Gehl worked on behalf of a Boston-based, national real estate investment firm to sell a distressed assisted living/memory care community with around 85 units in the Pittsburgh suburb of Monroeville, Pennsylvania. The community experienced a series of operational setbacks
post-COVID, culminating in the rupturing of a nearby water main, which flooded large portions of the community. All residents had to be evacuated, and ownership had to determine whether to reinvest and reopen as a seniors housing community or explore other potential uses. There was a narrow path to re-zoning the asset for a behavioral healthcare use, which drove up the sale price of the vacant asset. A Pennsylvania-based entity with extensive regional experience submitted a compelling offer along with a comprehensive plan to receive the appropriate zoning approvals.
However, not all struggling operations get converted to behavioral health use. In another transaction, an institutional real estate investment and development firm engaged Blueprint to conduct a risk/reward analysis of making capital improvements versus divesting its seniors housing community in Richmond, Virginia. Built in 1999, the 99-unit distressed assisted living and memory care community was struggling to rebound from pandemic-era lows, and the fund’s investment horizon was approaching. The seller ultimately elected to divest the community,
and the marketing campaign yielded several competitive offers from a mix of buyer profiles, including not-forprofits, private equity-backed operators, and a smaller owner/operator.
After initially selecting a not-for-profit buyer, the deal stalled due to a number of operational setbacks during diligence, with the buyer choosing to pull out of the deal. Blueprint re-engaged with other bidders and the deal was put back under LOI at the same price, but with a new buyer. The transaction closed at the agreed-upon price and terms following an accelerated process in which contract negotiations and licensure approvals were expedited. Alex Florea, Kory Buzin, Steve Thomes and Kevin Lukehart handled the transaction.
Blueprint represented a court-appointed receiver in the sale of a three-asset seniors housing portfolio in the Grand Junction, Colorado MSA. The portfolio included two assisted living communities and one standalone memory care community. At the time of sale, the communities were collectively 65% occupied and breaking even on a combined basis.
Built between the late 1990s and early 2000s, the two AL communities each comprise 50 units and require some capex, presenting an opportunity to add value. One was 75% occupied and the other 85%. The payor mixes were split roughly 60/40, reflecting the communities’ role in serving a real need for Medicaid-assisted living in the area. The third asset, a 20-unit, fully private-pay memory care community built in the mid-1990s, was 100% occupied and generating positive cash flow.
Five formal written offers were secured before a Denverbased owner/operator was ultimately selected as the buyer, seeking to expand its existing Colorado regional seniors housing presence into the Grand Junction MSA. Dillon Rudy and Jacob Gehl handled the transaction, which closed on time and at the negotiated upon purchase price, despite continued operational challenges endured during the closing period.
Staying in Colorado, Cindat Capital Management, a middle-market real estate private equity platform focused
on seniors housing and opportunistic investments, announced its first investment from its Senior Housing Credit Platform. It was a unitranche debt investment in The Pearl at Boulder Creak, a 116-unit, Class-A independent living and assisted living community built in 2023 in Boulder, adjacent to the University of Colorado campus. The community is supported by a strong sponsor and an experienced operator.
The asset aligns with CCM’s strategy of investing in seniors housing assets with strong operations and a desirable physical plant. Blueprint’s Ben Firestone and Michael Segal were CCM’s sole advisors in addressing its prior investments in the space. This investment is a strategic pivot from the company’s platform, as it looks to diversify its capital formation efforts with a future focus on expanding relationships with U.S., European, and Asian institutional partners and investors. CCM intends to expand its credit platform through a growing pipeline of attractive debt opportunities in the seniors housing sector over the next 12 to 24 months.
There were a couple more Keystone State closings, with one seeing a large New York-based seniors housing owner selling an 80-unit assisted living/memory care community in Harrisburg, Pennsylvania. Kory Buzin and Steve Thomes handled the transaction. Ownership acquired the asset several years prior while in distress and brought on Viva Senior Living as manager to execute a turnaround plan, which was now in its final stages. While the asset was performing, it was non-core to the owner’s geographic portfolio footprint.
The seller ultimately selected a buyer group that chose to retain Viva as the operator and negotiated a lease structure with performance-based incentives and a purchase option, enabling the incoming partner to benefit from the improving performance at the community with minimal upfront capital and the opportunity to buy once key operational milestones are achieved.
Blueprint was also brought on by a Boston-based real estate investment and development firm in its divestment of a non-core seniors housing community in Quakertown, Pennsylvania. Built in 1989, Independence Court of
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Quakertown is an 89-unit, 116-bed assisted living community. Occupancy struggled to fully recover from pandemic-era lows, pushing the investment well beyond the intended holding period. However, the community always managed to remain cash-flow positive.
The seller approached Blueprint to conduct a risk/ reward analysis of executing a material capex investment program versus divesting, with the firm electing to sell. CareOne (which has a presence in the state), in partnership with Cardinal Senior Living, was selected as the buyer. There were several unexpected hurdles throughout the transaction, but it successfully crossed the finish line. Buzin, Thomes and Jacob Gehl handled the transaction.
A former Petersen Healthcare seniors housing community sold in Girard, Illinois, thanks to Ryan Saul of Senior Living Investment Brokerage. Built in 2002 and featuring 48 units of independent living and assisted living, the community was 72% occupied but losing more than $100,000 a year on $1.2 million of revenues. The
lender had taken control of the property in late 2024 and hired Gardant to manage the community until a sale occurred. Gardant was able to bring occupancy up to 83% and financial performance to breakeven at the time of the sale. A private owner with multifamily real estate holdings in the area that was looking to get into seniors housing was the buyer, paying around $31,200 per unit for the community.
Just before going to print, SLIB’s Vince Viverito, Nick Cacciabando, Jeff Binder and Lucas Doll handled the sale of two seniors housing communities in Oklahoma. The communities are located in Mustang and Oklahoma City, both built in stages from the late-1990s to the late-2000s. They total 135 units of independent living, assisted living and memory care.
These were the last seniors housing assets of the Denver-based private equity seller and were struggling with poor performance. The Oklahoma City asset was especially lagging with 52% occupancy (as opposed to 80% for the Mustang property). Given that situation,
SLIB leveraged an auction process to identify a buyer capable of repurposing the underperforming community while continuing operations at the relatively stronger one. The OKC community was thus vacant at the time of the sale and occupancy improved at the Mustang location as a result. A New Jersey-based skilled nursing company purchased the OKC property with plans to convert to an alternative use. They also bought and will continue to operate the Mustang community as an AL/MC property.
Haven Senior Investments facilitated a transaction between a national REIT and a real estate development firm based in Boston, Massachusetts. The seller, Summit Healthcare REIT, divested a seniors housing community in Littleton, New Hampshire. Built in 2002, The Village at Riverglen features 60 beds across 50 independent living and assisted living units. The buyer, Cougar Capital Management, paid $8 million, or $160,000 per unit, and will bring on Willow Ridge Senior Living to manage the community going forward.
According to LevinPro LTC, Summit Healthcare acquired the community in 2015 for $8.5 million, or $170,000 per bed. The property was leased to an affiliate of Riverglen House of Littleton LLC pursuant to a 15-year triple net lease. Blueprint handled the 2015 transaction.
SVN Senior Living Advisors announced the successful sale of a three-property assisted living and memory care portfolio in the Houston, Texas MSA. The transaction was completed on behalf of a national financial institution. The three properties comprise more than 200 units.
Managing Director Josh Salzman led the transaction, supported by John Klement, Don Husi and Aaron Thompson. The assets attracted multiple qualified offers and ultimately sold for an undisclosed amount. Cima Investment Group (and its affiliated operating company, Cima Senior Living ), a fully integrated investment platform focused on senior living, was the buyer.
For the second time in just 18 months, Evans Senior Investments facilitated the sale of Country Meadow Place, a 56-unit assisted living community in Mason City, Iowa. The seller was Jaybird Senior Living, a regional
owner/operator that acquired the asset in 2024 for $13 million, or $232,100 per unit. Evans handled that transaction, too. The community was well occupied at the time of the 2024 purchase, but the property has continued to perform well, achieving an in-place NOI margin of 36%.
Through a competitive marketing process, ESI secured seven offers from institutional investors. The selected buyer was a private family office that paid $15.15 million, or $270,500 per unit. The transaction was structured as a HUD loan assumption of the debt placed in 2024, with Jaybird remaining as the operator post-closing.
Ventas (NYSE: VTR) expanded its portfolio through a recent acquisition of a seniors housing community in Washington State. Built in 2003, MorningStar at Silver Lake is in Everett, Washington, with 113 independent living and 35 assisted living units. The in-place operator will continue to manage the community going forward. MorningStar Senior Living has been operating the community since 2021, coming into a community that
was struggling with census at the time. Today, it maintains nearly full occupancy.
It is unclear who the current seller was, but according to LevinPro LTC’s deal database, Artemis Real Estate Partners acquired the community in 2018 for $50.5 million, or $341,000 per unit, at a 6.2% cap rate. Occupancy was strong at 95% as of the 2018 deal, and the community operated at a 45% EBITDAR margin. Back then, Artegan was hired to operate the community, and Artemis financed the deal with a $33.15 million loan through Freddie Mac with a seven-year term.
Active adult deals have all but dried up, but a 55+ community in Germantown, Tennessee, found a new owner thanks to the team at Newmark. Built in 2020, Avenida Watermarq is a 161-unit, Class-A active adult community in an affluent suburb of Nashville. There are one- and two-bedroom options averaging 919 square feet per unit. Occupancy was 87%. Inspired Real Estate Partners and GEM Realty Capital acquired the property for $32.925 million, or $205,000 per unit, and will
have Gallery Residential handle its management going forward. The community will also be rebranded as Lakeview at Germantown.
AGENCY FINANCINGS
HUD activity is humming along, and it should only accelerate with the implementation of its new Express Lane. VIUM Capital reported a healthy number of closings in the first half of 2025 with an impressive $780 million
transaction, with VIUM completing the $23.92 million HUD takeout 25 months post-closing. VIUM also secured a $49.95 million HUD loan for a skilled nursing portfolio totaling 404 beds in Pennsylvania. There was an existing MBI/VIUM bridge loan, and the HUD refinance also included shareholder note reimbursement for a repeat client. This was the third largest HUD healthcare loan in Pennsylvania.
Berkadia ’s Seniors Housing & Healthcare platform
Capital Funding Group’s bridge-to-HUD and HUD teams financed more than $930 million across 50 transactions in the first half of 2025. These financings included 14 HUD loans, 21 bridge loans and 15 accounts receivable loans for clients across the country. Craig Casagrande originated a $33.9 million HUD loan for the refinancing of a 403-bed skilled nursing facility in Pennsylvania. Casagrande also originated a $7.4 million HUD loan to refinance a 121-bed skilled nursing facility in Pennsylvania. CFG provided the initial bridge financing for the acquisition. Check out other CFG H1 financings here
Cambridge Realty Capital provided $19.316 million in HUD financing for two seniors housing assets in Texas and Missouri. The Texas financing was provided for the purchase of Ashwood Court, a 120-bed assisted living community in North Richland Hills. The Missouri financing was provided for the refinance of Northland Rehabilitation and Healthcare Center, a 118-bed skilled nursing facility in Kansas City.
Fannie Mae and Freddie Mac saw some activity, too. Lument refinanced three Juniper Village seniors housing communities in Pennsylvania with a combined 254 units through three Freddie Mac loans totaling $27.3 million. Casey Moore and Miles Kingston led the transaction for Lument. The loans carry attractive fixed interest rates, 10-year terms with five years interest only, and 30-year amortization schedules. Lument also closed a Freddie Mac loan to facilitate the construction of The Culbreath, a 364-unit affordable seniors housing community in Dallas, the details of which are on LevinPro LTC.
Finally, BWE provided a $37 million Fannie Mae financing for Harmony at Southridge, a seniors housing community in Charleston, West Virginia, that is operated by Harmony Senior Services. Ryan Stoll and Taylor Mokris originated the 10-year loan on behalf of the borrower, Smith-Packett, Wessex Capital. The loan features five years of interestonly payments and a fixed interest rate. Built in 2020, Harmony at Southridge features independent living, assisted living and memory care units. The borrower converted 12 independent living units to assisted living in late 2024.
ACQUISITION LOANS
Carnegie Capital , a national seniors housing debt brokerage firm founded and run by JD Stettin and David Farhadian, celebrated its 10-year anniversary with a $124 million, or $117,100 per bed, portfolio acquisition transaction. Carnegie provided a combination of advisory work and debt placement for the nine-skilled nursing facility portfolio with 1,059 beds across southern and central Texas.
A private skilled nursing equity shop bought the portfolio three years ago, helped by debt arranged by Carnegie, and is now exiting the industry with the portfolio sale to a large REIT. The portfolio has been operating well since the 2022 acquisition. The REIT also spun off one of the largest SNFs to sell to the portfolio operator, one of the largest operators in the state, which acquired it using HUD debt that Carnegie placed with Walker & Dunlop.
Oxford Finance announced a healthy first half of 2025, with more than $715 million in new loan commitments during that period. The largest transaction saw Oxford provide a $234.9 million term loan and a $22.0 million revolving line of credit to refinance four behavioral health facilities and finance the acquisition of 13 skilled nursing facilities consisting of over 1,800 beds for an established California-based operator.
For another skilled nursing acquisition, Oxford provided a $79.3 million term loan and a $7.5 million revolving line of credit for five skilled nursing facilities and one assisted living community consisting of 555 beds in Washington State for an in-state operator. Another portfolio of nine skilled nursing facilities with 500 licensed beds in Iowa was acquired by a newly created real estate investment firm with a $35.25 million term loan provided by Oxford. To see the rest of Oxford’s H1 activity, click here.
MONTICELLOAM funded a $217 million floating-rate senior bridge loan for a SNF portfolio. The financing carries a 36-month term and supports the sponsor, a repeat client. The loan supports the acquisition and refinance of this portfolio, which comprises four facilities in New York. The sponsor is acquiring two of the assets and financing the other two, which are stabilized. Together, the four
facilities comprise more than 1,000 beds.
Outside of its HUD activity, VIUM Capital is actively targeting a doubling of its equity investments in its debt fund over the next year. Plus, the firm is looking to hire a Director of Debt Capital Markets to lead and manage its relationships with other banks and non-bank lenders.
In the first half of the year, VIUM and Merchants Bank (MBI) provided a $15.44 million bridge loan for the acquisition of a 120-bed skilled nursing facility in Florida. The cash-flowing facility had positive momentum from its recently opened dialysis unit, so VIUM/MBI underwrote future cash flow based on the spot census at the facility, which proved that the dialysis unit had driven a higher quality mix almost immediately upon opening.
Capital Funding Group’s Craig Casagrande originated a few transactions throughout the first half of the year, notably a $137.5 million bridge loan for the acquisition of eight skilled nursing facilities in Pennsylvania, featuring 1,906 beds. He arranged that with Catherine Mansel. CFG also provided an $18 million working capital line of credit, which was originated by Jim Ginty.
Next for Casagrande and Mansel was a $56.5 million bridge loan increase for a partnership buyout and operator change for three skilled nursing facilities, featuring 609 beds, in Illinois. Tommy Dillon also originated a couple transactions. First was a $93.8 million bridge loan for the acquisition of 12 skilled nursing facilities in Utah. CFG provided a $15 million working capital line of credit, upsizing an existing line of credit. The line of credit was originated by Jeffrey Stein.
Andrew Jones originated a $48.6 million bridge loan for the refinancing of a 180-bed skilled nursing facility in Maryland with Ava Julio. There was also a $42.8 million bridge loan for the refinancing of two skilled nursing and assisted living communities in Ohio, featuring 642 beds, originated by Jones and Mansel. Lastly, on behalf of an existing client, CFG’s Ken Assiran and Jake Walsh originated a $3.5 million bridge loan for the cash-out refinance of a 36-unit assisted living community in Moses Lake, Washington.
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Forbright Bank reported its activity for the first half of the year from its healthcare and HUD lending teams, announcing more than $500 million in loans closed for acquisitions, recapitalizations, working capital, and HUD financings for healthcare providers across the country. One of the largest transactions was a $60 million revolving loan to finance working capital for 49 skilled nursing facilities with over 5,000 beds in Texas.
Forbright also participated as a co-lender as part of a term loan totaling $45.5 million that supported the recapitalization of 16 seniors housing properties across multiple states. One borrower obtained a $17.9 million term loan from Forbright to acquire two senior care campuses in Kansas that feature both assisted living and skilled nursing services.
There was another acquisition featuring a seniors housing community in Florida that needed time for the incoming operator to continue filling and stabilizing the property. To finance the deal, Forbright provided a $35.9 million loan. Finally, Forbright’s team closed a $26.9 million
HUD loan for a skilled nursing facility in Georgia. There was an existing Forbright bridge loan on the property, and the transaction replaced that debt while covering all transaction costs associated with the refinance.
Ziegler served as the capital structure advisor in the placement of two bank loans totaling $21.795 million on behalf of Phorcys Capital Partners. The first financing was used to acquire Superior Residences of Clermont, a not-for-profit AL/MC community in Clermont, Florida, that was held and operated through a court-appointed receivership. The acquisition closed in April 2025, with Ziegler placing the acquisition and capital expenditure loan with Stride Bank. SRI Management is the third-party manager of the community.
The second financing was used to refinance Prosper at Wickliffe, a for-profit AL/MC community in Wickliffe, Ohio. The 160-unit community was acquired from Tapestry Senior Living in April 2024 stemming from a distressed 142(d) bond financing. The price was $13 million, or $81,250 per unit. Ziegler again placed the loan with
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Stride Bank. Prosper Senior Living is the third-party manager of the community. Christopher Utz advised and negotiated the transactions.
Dwight Capital and its affiliate REIT, Dwight Mortgage Trust (DMT), closed $650.7 million in seniors housing financings during the second quarter of 2025. In one of the significant transactions, DMT originated a $230 million bridge loan to facilitate the acquisition of a 19-asset skilled nursing/assisted living portfolio in Ohio. The deal was arranged by Adam Offman and Yossi Benish. Other Dwight Capital and DMT activity can be read here
Greystone provided a $33.9 million bridge-to-HUD financing for the acquisition of a skilled nursing facility in Virginia with 210 units. The interest-only bridge financing carries a 24-month term, with two six-month extension options, and features a floating rate. The borrower also secured an interest rate cap to mitigate future rate volatility. The financing was originated by Christopher Clare, David Young, Ryan Harkins, Ben Rubin, Parker Nielsen and Liam Gallagher.
Next, Greystone provided a $45.4 million bridge-to-HUD loan for the acquisition of four skilled nursing facilities totaling 489 beds throughout Michigan. This financing was also originated by the same Greystone team above. The interest-only bridge financing carries a 24-month term with two six-month extension options and features a floating interest rate. The borrower also secured an interest rate cap.
CONVENTIONAL LOANS
Tremper Capital Group closed a $27.5 million floating rate refinance for a Class-A, 91-unit AL/MC community with strong, stabilized performance. The non-recourse loan featured a seven-year term aligned with the sponsor’s business plan and included a performance-based earnout. The structure met all of the sponsor’s financing objectives for the asset. The transaction introduced a new lending relationship between a local owner/operator and Live Oak Bank
Among the other June transactions were a $45 million
refinance arranged on behalf of Kisco Senior Living and a $34.15 million refinance on behalf of CommonSail Investment Group (StoryPoint Senior Living’s parent company).
TCG also closed a $55 million construction loan takeout for a seniors housing community in San Clemente, California, and a $28 million loan for a seniors housing community on the Florida panhandle. In addition, Tremper Capital Group arranged acquisition financing from a debt fund on behalf of Town Lane for its acquisition of two seniors housing communities in Florida.
MONTICELLOAM, LLC announced the closing of $218.3 million in combined bridge, mezzanine, and working capital financing for 18 skilled nursing facilities across Kentucky. The transaction includes a $179.3 million senior bridge loan and a $29 million mezzanine loan, which the sponsor plans to use to restructure and upsize the existing debt on the portfolio, originally financed by MONTICELLOAM in May 2024. A $10 million working capital line of credit will be used to cover the day-to-day operational needs of over 1,500 skilled nursing beds across the state.
Greystone arranged a $43.5 million debt placement to refinance a seniors housing community in Oregon. The 142-unit property is a recently built and stabilized Class-A IL community. The community had strong trailing cash flow, on a shorter trailing period, but an upward trend. The financing was sourced by David Young. The debt placement, with a regional bank, includes a competitive floating rate priced in the 200s over SOFR, enabling the sponsor to refinance existing senior and subordinate construction debt, return capital to investors, and position the asset for a future agency debt.
Steven Muth, Austin Sacco and Garrett Sacco of Berkadia arranged up to $33.1 million in financing for a seniors housing community with more than 150 units in the MidAtlantic. The refinance included an initial loan of $28.1 million, providing over $8 million for unit upgrades and common area improvements. Additionally, Berkadia negotiated a $5 million earn-out, which could increase the total loan balance to $33.1 million upon achieving
certain coverage metrics.
BHI, the U.S. branch of Bank Hapoalim B.M., provided $49 million in bridge-to-HUD financing for a portfolio of three seniors housing communities in the suburbs of Detroit. Together, the communities total 221 units, with 171 assisted living and 50 memory care units. Shahid Imran, doing business as Hampton Manor, was the borrower. Proceeds from the loan will be used to refinance existing debt and facilitate a partnership buyout, with Imran assuming full ownership of the properties, which were developed within the last five years by Imran and undisclosed partners.
There were just a couple of construction financings announced this month, starting with Newmark Seniors Housing Team’s handling of a $180 million construction financing and equity raise for Nexus Development’s newest community, Vivante at Turtle Creek. Financing was secured through Beal Bank, and the equity was raised from private investors in multiple states, including Texas and California.
The seniors housing community will feature 164 assisted living and 29 memory care units on a 1.37-acre plot in Dallas, Texas. The Class-A asset will stand 20 stories tall, and is slated for 2027 completion. The architect is HKS Inc. and the general contractor is ANDRES Construction Services
Nuveen Green Capital partnered with repeat sponsor, North Town Partners, to provide $10.6 million in C-PACE financing as part of the $55 million project cost for a planned seniors housing community in Sheboygan, Wisconsin. C-PACE will be utilized to fund key energy and water efficiency measures. By leveraging C-PACE’s accretive capital, North Town Partners was able to fill a gap in its capital stack, lowering its overall project costs.
The project is being jointly developed by DMK Development Group, North Town Partners and Charter Senior Living . Charter Senior Living Sheboygan will comprise 182 independent living, assisted living and memory care units. The community will stand three stories tall, and total 191,000 square feet.
recognition within the industry as well as with potential customers, and investors are always keeping a watchful eye. Much of the industry has gotten its mojo back, and while Brookdale has finally seen good improvements, it still lags in occupancy, margin and profits. The question is, did shareholders vote for more of the same? Or are they banking on a new CEO to light a fire, and the Board to finally do its job? There remains a lot of work to be done.
During the proxy battle, there was much written about how undervalued Brookdale was, and what would be necessary to unlock the true value. But we never actually saw details of a financial plan, with numbers, to show how this would be done. There were vague references to divesting loser leases and loser owned properties, and reducing the overall debt levels. But many of those “loser” leases are in master leases with some very profitable leases. One can’t just walk into Ventas (NYSE: VTR), Welltower (NYSE: WELL) or any other landlord and demand that they take back the losers but not the
winners. It does not work that way. Not without a price to pay. On the other hand, for owned properties where occupancy has stagnated below 70%, or even 75%, for several years, with no signs of improvement, we would say divest at the highest price you can, and today’s market is reasonably strong, especially given the buyer demand for value-add properties.
Growth. The biggest driver of future value will be occupancy growth. And when coupled with margin growth on existing units, the impact could be explosive, and should be explosive. But a lot of things have to go their way, not the least of which is expense control. Brookdale’s occupancy growth has finally reached levels other companies have been seeing for a few years, even in the traditionally slow or declining winter months. But we must imagine that when the proxy battle started, management put a lot of pressure on the sales staff for performance, which has paid off. Was there low hanging fruit in terms of census pickup? Most likely. Will sales staff hit a wall during the next 12 months and beyond and not see sequential quarterly increases of 25 or 50 basis
points for many quarters to come? Most likely.
All of these questions will have to be dealt with when trying to figure out what Brookdale might be worth in the future, and how long it will take. While we could do a quarter-by-quarter forecast for five years, that just gets too complicated. Instead, we have assumed a 100-basis point annual increase in occupancy over the next five years. Yes, some years will be higher (they hope), but some years the increase will be lower, so it will all even out. This will take the company to over 85% occupancy by 2030, when it has been forecast by NIC that we will have a 600,000-unit nationwide shortage. Everyone seems to be believing it, and counting on it. Some investors believe Brookdale should hit 85% occupancy well before 2030 given the lack of new supply. That would be nice.
Next is rate growth. On a consolidated basis, in the first quarter of 2025 RevPOR was an average of $6,507 per unit across all unit types, leased and owned. The highest was for CCRCs (about 10% of the units) at $7,891 per unit. Just behind that was assisted living (about 70% of units) at $6,787 per unit. Finally, and much lower, was independent living (20% of units) at $4,962 per unit. Year over year, RevPOR for independent living increased by 3.3% and assisted living by 3.5%. The CCRC portfolio recently suffered a very small decline in RevPOR. We decided to use the total average, which is close to the most prevalent assisted living, so a 3.5% annual increase seemed appropriate, if not conservative given the growing supply/demand imbalance.
The operating margin, of course, was highest for independent living at 34.8%, with assisted living at 29.2%. Because AL represents 70% of the units, it drove the consolidated average margin of 29.0% in the first quarter of 2025. In our forecast, we assumed that the total operating margin for existing units would increase by 50 basis points a year for the next five years. We hope management is trying to increase the margin by more than that, perhaps by 25 basis points a quarter, but given the history of margin increases (and decreases) it is not that easy.
The same-community margin for the first quarter of this
year, however, jumped by 260 basis points sequentially to 29.0%, and that was on a zero increase in weightedaverage occupancy. There was an unusually large increase in first quarter same-community revenues (4.5% sequentially), most likely because of January rate increases, with a less than 1% increase in expenses, so we expect expenses to catch up during the year. In 2024, the operating margin dropped in the second, third and fourth quarters, so that does not bode well if history even somewhat repeats itself.
As to any increase in revenues from occupancy gains, we will assume about 70% of each dollar of those revenues will go directly to the bottom line. As a result, if census increases by 100 basis points per year for the next five years, that increase will yield about $24.2 million in additional EBITDA in the first year, and then $48.4 million in the second year plus any margin increases, and so on. By year five, that would result in an additional $121 million in annual cash flow, plus the margin increases on the already occupied units. In theory, combined that could result in a value increase of $2.8 billion, or close to $12 per share higher than today. That must be what activists and true Brookdale believers are thinking and assuming, and most likely management as well.
G&A expense has been running a little more than 5% of revenues, which is close to the industry norm, but this excludes non-cash expense items such as stock-based compensation and any restructuring expenses. One thing that investors should always keep in mind is that when downsizing a portfolio, the revenues from those divested communities do cover some of the corporate overhead expense, and that would be lost. In addition, there are geographic concentration benefits by having clustered operations. It does not take as much management time to operate a community that is close to other operations, even if it is not performing as well. As we have mentioned in the past, Brookdale learned that when renegotiating its leases with LTC Properties (NYSE: LTC) a few years ago. Initially, it thought it would cancel a big portion of the portfolio, but then backtracked when economic reality set in.
Ortelius Advisors, in its letters to shareholders, also
talked about shedding some of the loser leases, but they may not have thought about what they contribute to covering overhead (G&A) expense. One could argue that overhead in general should go down with fewer properties under management, but it is never proportional. There are certain parts of overhead that do not change with the number of communities under management.
Capital Structure. As of March 31, 2025, Brookdale had total debt of about $4.3 billion. That comes to nearly $130,000 per unit. Looking at it from the perspective of the average price per unit paid of $167,300 for seniors housing in 2024, according to LevinPro LTC data, that does not look too bad and represents a 22% discount from the average market price. About two-thirds of Brookdale’s debt is fixed rate with a weighted average rate of 4.76%, a rate they would not be able to achieve in today’s market.
The variable rate debt has a weighted average rate of 6.78%, which is closer to market today. So, while this represents a lot of debt, and something that could be trouble in another downturn or pandemic, it should be
manageable in the near term. Any future asset sales would reduce this level of debt. For liquidity, Brookdale has cash and cash equivalents of $240 million, plus an unused line of credit of $66 million, so few worries there, for now.
With regard to the leased portfolio, as of the first quarter, there were 236 leased communities with 17,072 units. The portfolio had an average occupancy rate of 80.2%, RevPOR of $6,664 and an operating margin of 31.2%, which declines to 10% after lease payments. For comparison purposes, the owned portfolio of 383 communities had a weighted average occupancy of 78.9%, RevPOR of $6,288 and an operating margin of 26.8% in the first quarter. The annual lease expense comes to about $13,646 per unit, or $1,137 per unit per month.
Ongoing, community level and non-development related capital expenditures for the owned communities was about $793 per unit in the first quarter, and $3,175 per unit for the full year 2024. For the leased portfolio it came to $573 per unit in the first quarter and $2,481 per
unit for the full year 2024. That is a lot of ongoing capital expenditures ($150 million in 2024), and something we do not see declining in the future given the age of the Brookdale portfolio. And it does take away from cash flow, even though capex should add some value.
Shrinking. During her last two years, we had a few conversations with the ousted CEO, Cindy Baier, about the size of Brookdale. Could it or should it get smaller? And how you do that? And whether the company should try to get better rather than smaller. She was never a big believer that Brookdale was too large to perform well, thinking instead that the size should be used to the company’s advantage. As most everyone knows, that is very difficult to do in a management intensive, highturnover business. And during the first half of her tenure, staff turnover at the community level was high, and then the pandemic hit.
We still believe the company would be better off with fewer properties, especially if the downsizing involved just the poorly performing ones. But as we stated above, sometimes the good comes with the bad and the truly ugly. Is there an optimal size for Brookdale? As of March 31, 2025, they operated 647 communities, and getting below 500 would be our target. Coincidentally, they have 143 communities with occupancy below 70%, or 23% of the portfolio, and that would be the first place to look.
It would be great to look at their strategic plan to see which properties they think can be improved sufficiently to want to keep. It would also be helpful to understand why so many properties have not rebounded post pandemic, and what they have tried to do but did not work. Maybe it is time to come clean with shareholders as to what is really going on within Brookdale and its portfolio.
Perhaps an investor day where they could get in the weeds to explain the problems and the solutions they are working on. Would that be too much to ask? Yes, because most management teams do not like to divulge too much information, data that later on could be used against them. Given the dismal performance of Brookdale’s shares, however, investors such as Deerfield Management (15.6 million shares) and Antipodes
Partners (13.68 million shares), which supported management in the proxy fight, should be able to demand more transparency. For whatever reason, they seem to be okay with riding out lousy returns. This has been a longterm problem for Brookdale, and at least Ortelius tried to do something about it and challenged the Board.
Can it Be Fixed? As readers know, we have long believed that there is too much that has been broken at Brookdale to be fixed in the near term. From a shareholder value perspective, it all hinges on occupancy growth and margin growth. On this front, there was some great news from Welltower in late July when it announced its second quarter results. And what a blockbuster quarter it was!
Welltower, or at least its SHOP operating partners, have been outperforming the market in a big way. Take samecommunity occupancy of 673 properties with more than 77,800 units. The sequential increase in quarterly occupancy over the past four quarters, starting with the third quarter of 2024, was 150 basis points, 140 basis points, 60 basis points and 70 basis points. For the quantitatively challenged, that is a total of 420 basis points in one year, an increase that will be hard to match in the next four quarters, but you know Shankh will be pushing. Note that instead of a decrease in the first half of 2025, the occupancy gain was 50% of the gain in the second half of last year. Not too shabby, and perhaps we have broken the historical pattern of flu season blues, but it is probably too early to claim that.
A similar trend occurred with the net operating income margin. In the same four quarter period as above, the margin increased sequentially by 60 basis points, 20 basis points, 140 basis points and 110 basis points to reach 30.7% in the second quarter this year. That is a 330-basis point increase in just 12 months.
Getting back to Brookdale, in our forecast assumptions above for occupancy and margin increases, we were much more conservative than the increases just posted by Welltower, and for good reason. The quality of most, but not all, of Welltower’s SHOP portfolio is higher than the total of Brookdale, and you have many different operators who have different models for success, as opposed to
just one Brookdale.
So, if we imagine that census and margin growth could be double our conservative projections in the next five years, that would mean a 200-basis point annual increase in occupancy, compared with 420 basis points for Welltower’s most recent four quarters. In theory, given what Welltower’s operators accomplished, this could be doable. And our margin increase each year was just 50 basis points, something Welltower beat in three of the past four quarters alone. A 200-basis point annual increase in occupancy would put Brookdale over 90% by 2030, and the higher cash flow and margin would result in a massive increase in value, taking the shares well above $20 each. But…
This is what the optimistic shareholders and some friends of ours believe is possible, with the right management, the right staff, the right economy, the right capex, new supply continuing to be limited, the same or higher level of demand, operating costs under control and no major surprises or disruptions. And let’s not forget, the right new CEO. That is a lot of things that have to go the
company’s way to reach that level, so we will stick with our more conservative approach and a future value in the $15 to $20 per share range in five years. That is more than double today’s value. Most shareholders would be thrilled, but others may not want to wait that long for a “maybe” and for everything to go right.
When a new CEO does come in, our guess is that after he or she reviews the landscape and figures out what they can and can’t do with the underperforming properties, they will want to put their own stamp on the company. And that usually means growth and acquisitions (call it ego). Perhaps the new CEO will get creative and expand into complementary businesses (even though Brookdale already sold off its home health business). Or may divide the company into two or three distinct operating groups. Or buy a company to acquire management talent. Who knows, but we all know that the status quo does not work and has not worked for years, and the operating performance of companies under the Welltower umbrella shows the market that it can be done. And if not now, when? As they say, carpe diem.
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Photo Credit: Liberty Senior Living
The Carrollton, New Orleans
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