REAL ESTATE NEWS

Sonida Senior Living is taking a measured approach to integrating two major operating teams after finalizing its $1.8 billion merger with CNL Healthcare Properties (CHP), CEO Brandon Ribar told attendees at this week's National Investment Center for Seniors Housing & Care Spring Conference in Nashville. The slow-and-steady strategy reflects both the scale of the transaction and the company's intent to preserve the strengths of each organization as it grows into one of the nation's largest senior living operators.

Sonida acquired 100% of CHP, a public, non-traded REIT with a national portfolio of high-quality senior housing properties, in a cash-and-stock deal announced in November. The acquisition doubled Sonida's size and positioned it as the eighth-largest owner of U.S. senior living assets, encompassing 153 independent living, assisted living, and memory care communities totaling nearly 14,700 owned units. The combined portfolio extends across the South, Southeast, and Midwest, with new strategic footholds in the Mountain West, Pacific Northwest, and Mid-Atlantic.

Ribar said the company is focusing first on cultural and operational alignment before formally merging the teams. "We've seen elsewhere in the past that when you do that, it's not always a smooth process," he said. "In the meantime, we want to help our managers grow in their careers as much as possible. When we made the deal, we didn't go in thinking we knew everything about all these operations. So really, it's become a deal that's the best of all worlds. We're learning some best practices from them."

Much of that alignment is being supported by investments in people and technology. "We are investing heavily right now in our resources, such as in our employees and technology," he said. But Ribar emphasized that digital tools alone cannot replace the human factor: "If you don't have the right people, none of that matters." Where Sonida has acquired a CHP property in a market where it already operates, the company is taking a collaborative approach—having existing community directors help onboard their new counterparts.

Industry conditions also remain top of mind for the CEO, particularly around capital markets and development trends. "We want predictable, smooth movements in the cap rates," he said. "We don't want anything jumping around that's erratic. It would be surprising if there wasn't more compression in the cap rates. We have a huge audience of investors in our space. A lot of money has been built up in the sector."

Still, development is lagging behind demand. According to NIC MAP research, the industry will need about 560,000 seniors housing units by 2033 but is currently on track to deliver just 190,000. "There are more discussions going on right now about development, but that doesn't mean that it is coming out of the ground," Ribar said.

Despite growth opportunities, Ribar remains cautious about how the resident profile could shift. "What if more seniors delay their move into a senior community?" he asked. "If a lot of them wait until they are age 83 or so, they may need expensive and excessive care at that age, which the operator might not be prepared for. That way, the resident will be living in a seniors care community for a shorter time." Containing labor costs will be key to managing that evolution. "You've got to be able to control your labor situation needs if you're going to succeed," he said.

Even with those challenges, Ribar sees cause for optimism as operators adapt to new realities. "More are investing in the right technology and people, which is good for everyone involved," he said. In a company release, he noted that Sonida's owner-operator platform was deliberately built for scale—to fully leverage favorable market fundamentals and demographic tailwinds shaping the future of senior living.

Source: GlobeSt/ALM