Sonida Senior Living Announces Agreement to Acquire Two Senior Living Communities in the Indianapolis Market

Rhea-AI Summary

Sonida Senior Living (NYSE: SNDA) announced a $12.3 million agreement to acquire Northfield Senior Living and Southfield Senior Living, adding 157 independent living units near Indianapolis. This acquisition is part of the Company's growth strategy, following a $154.8 million capital raise. The properties, recently renovated, are expected to generate a 9% stabilized NOI yield. However, current occupancy stands at 55.5%, below the Company's average of 82.7%.

Positive

• Acquisition of two senior living communities for $12.3 million.
• Potential to generate a 9% stabilized NOI yield (unlevered).
• Expansion of existing Indianapolis portfolio leveraging local expertise.

Negative

• Current occupancy at 55.5%, significantly lower than the company's average of 82.7%.
• Risks related to acquisition closure and ongoing COVID-19 impact.

DALLAS--(BUSINESS WIRE)-- Sonida Senior Living, Inc. (the “Company” or “Sonida Senior Living”) (NYSE: SNDA), a leading owner-operator of senior living communities, announced that it entered into a purchase and sale agreement to acquire two recently renovated senior living communities for approximately $12.3 million.

The communities, Northfield Senior Living and Southfield Senior Living, include 157 independent living units and are located approximately 20 minutes outside of downtown Indianapolis near major highways, stores and restaurants. The assets complement Sonida Senior Living’s existing Indianapolis portfolio and will leverage the strength of the Company’s local leadership team. The Company expects the acquisition to close in the first quarter of 2022 subject to customary closing conditions.

“This transaction represents the Company’s approach to pursuing accretive, tuck-in growth in markets where we have operational expertise and can leverage deep market knowledge and scale,” said Kimberly S. Lody, President and CEO. “The signing of this acquisition marks the Company’s shift into the growth phase of our strategic plan following the recently closed $154.8 million capital raise and strategic investment from Conversant Capital.”

The properties recently underwent a significant refurbishment, and the Company’s purchase price, equating to approximately $79,000 per unit, represents a significant discount to replacement cost. Demographics in the surrounding market area include a growing 75+ population with above average middle-income characteristics and unmet demand for this type of low-acuity senior living product. Due to the operational disruption from the renovation projects prior to the onset of COVID-19, the two assets have an in-place November occupancy of 55.5%, as compared to Sonida Senior Living’s independent living occupancy of 82.7% for the same period. By implementing Sonida Senior Living’s institutionalized processes and resources, the Company expects to deliver NOI growth through lease up and additional resident services with the assets projected to generate a 9% stabilized NOI yield (unlevered).

Safe Harbor

The forward-looking statements in this release are subject to certain risks and uncertainties that could cause the Company’s actual results and financial condition to differ materially, including, but not limited to: the satisfaction of all conditions to the closing of the proposed transaction; other risks related to the consummation of the proposed transaction, including the risk that the transaction will not be consummated within the expected time period or at all; the continued spread of COVID-19 and highly contagious variants and sub-lineages, including the speed, depth, geographic reach and duration of such spread; new information that may emerge concerning the severity of COVID-19; the actions taken to prevent or contain the spread of COVID19 or treat its impact, the legal, regulatory and administrative developments that occur at the federal, state and local levels in response to the COVID-19 pandemic and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or the Company’s response efforts; and the other risks and factors identified from time to time in the Company’s reports filed with the Securities and Exchange Commission. Additionally, projections are current estimates by the Company and actual results may differ materially from the projections.

About the Company

Dallas-based Sonida Senior Living, Inc. is one of the nation’s leading operators of independent living, assisted living and memory care communities for senior adults. The Company operates 75 communities that are home to nearly 7,000 residents across 18 states providing comfortable, safe, affordable communities where residents can form friendships, enjoy new experiences and receive personalized care from dedicated team members who treat them like family.

For more information, visit www.sonidaseniorliving.com or connect with the Company on Facebook, Twitter or LinkedIn.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211216005655/en/

Kimberly Lody (972) 308-8323, klody@sonidaliving.com 

 

Source: Sonida Senior Living, Inc.

FAQ

What is the value of the acquisition by Sonida Senior Living?

Sonida Senior Living is acquiring two communities for approximately $12.3 million.

How many units are included in the acquisition by Sonida Senior Living?

The acquisition includes a total of 157 independent living units.

What is the projected NOI yield for the newly acquired properties?

The properties are projected to generate a 9% stabilized NOI yield (unlevered).

What is the current occupancy rate for the acquired properties?

The current occupancy rate for the acquired properties is 55.5%.

When is Sonida Senior Living expecting to close the acquisition?

The acquisition is expected to close in the first quarter of 2022, subject to customary closing conditions.