National assisted living operator Enlivant, along with its investment partners, is in the process of acquiring 48 senior living properties, serving as a major growth channel for the company’s presence nationwide. Enlivant is acquiring the properties with TPG and TPG Real Estate, the real estate platform for TPG, and will add 3,084 independent living, assist living and memory care units across 14 states—a move the company says will expand its national portfolio by 40%.
Sixteen of the transactions have closed to date and the additional 32 transactions are expected to close in the coming months.
Through the acquisition, Enlivant will increase its community count to 230 properties spanning 11,000 units across 27 states—a “signifiant operational expansion” for the Chicago-based operator.
Enlivant is not disclosing the purchase price or identities of the sellers, given that the transaction is closing in tranches and the process has not yet been completed, CEO Jack Callison told Senior Housing News. Multiple sellers were involved, he confirmed, and he anticipates that the deal will close in its entirety within about three months.
A Dayton Business Journal report earlier this week linked one of the properties to a 44-property Brookdale portfolio the nation’s largest operator announced it was selling in July. That portfolio included 2,453 units in 12 states with an average occupancy level of 79%—well below the operator’s average. Callison did not confirm that this property is involved in the 48-property transaction.
The acquired communities are located in Arizona, Delaware, Florida, Georgia, Kansas, Illinois, Indiana, North Carolina, Ohio, Oklahoma, Pennsylvania, Tennessee, Virginia and West Virginia.
Formerly known as Assisted Living Concepts, Enlivant rebranded and launched its new company name in 2014. Callison at the time called the change a “new day” for Enlivant, following several troubled quarters and ownership change.
Since, Enlivant has reorganized, restructured and ramped up, eyeing growth through acquisition in its core markets.
The 48-property acquisition will drive momentum for Enlivant as it continues to scale nationally, but there are no specific goals in terms of how large the company ultimately will be or what geographies it will operate in, Callison said. The strategy of having a significant presence in its chosen markets still stands, though, so Enlivant will not be making forays into new areas without having some scale, he added. Part of the growth strategy may involve having several communities in the same areas, but at different price points.
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In addition to increasing the overall scale of the company, the transaction furthers Enlivant’s plans to increase its product mix of assisted living and memory care.
“We’re a firm believer that memory care is an important and frankly underserved segment in the industry we’re in, and it’s a big growth initiative for us to continue increasing our presence from a memory care perspective,” Callison said. “Quite a few of the 48 communities have either a memory care component, and some are dedicated standalone memory care communities.”
There are no hard targets as far as the ultimate mix of assisted living and memory care, but more memory care growth can be expected, he said.
Some of the 48 newly acquired properties are fully stabilized with strong occupancy, while some are more “value add” plays, Callison explained. Enlivant has identified certain properties that are in need of renovations or other updates, and the company plans to put the necessary capital into these projects.
The company has been preparing for a significant growth phase for about four years, investing heavily in its operating platform, technology, and culture, Callison said.
“We believe we’re ready to start scaling that platform and leveraging it,” he said.
Part of preparing also has been developing a robust, dedicated integration team involving top talent from various domains, including clinical, sales/marketing, IT, and finance. The teams spend time in the community before the transition closes, and remains to be sure they’re fully integrated. Callison and other executive leaders also have plans to visit each community to speak with staff and residents.
Capital for the acquisition came from TPG, a San Francisco-based private equity investment firm that acquired Enlivant in 2013.
“These transactions mark a period of significant business momentum for Enlivant as they continue to scale their national operating platform while maintaining their founding commitment of providing each of their residents with the highest level of attentive, individualized, and personalized care in a home-like setting,” said Avi Banyasz, partner and co-head of TPG Real Estate, in a press release. “We look forward to growing our long-term partnership with Enlivant by fully and thoughtfully integrating these new communities and further building out this industry-leading business.”