Pegasus Senior Living has agreed to manage four properties developed by Omega Communities, expanding its portfolio for the first time since taking over operations for 36 former Brookdale Senior Living (NYSE: BKD) buildings last year.
Birmingham, Alabama-based Omega is a for-profit company that develops senior living communities in affinity relationships with churches. The four properties that are transitioning to Pegasus management are:
— The Springs at South Biscayne in North Port, Florida, which opened in August 2015 and consists of 133 units of assisted living and memory care
— The Fountains of Hope in Sarasota, Florida, which opened in January 2016 and consists of 106 units of assisted living and memory care
— Living Waters at Lady Lake, Florida, which is under development and slated to include about 160 units of independent living, assisted living and memory care
— Lake Vista at Eagle’s Landing in McDonaugh, Georgia, which is under development and slated to include about 160 units of independent living, assisted living and memory care
Previously, The Springs at South Biscayne and The Fountains of Hope were managed by Greenbrier Senior Living.
Omega has a good relationship with Greenbrier, but decided to shift to Dallas-based Pegasus due to long-standing ties, as well as the decision to re-finance the Florida properties, Omega Chief Investment Officer Jimmy Taylor told Senior Housing News.
Pegasus co-founder and President Chris Hollister previously served as a consultant to Omega. Chris Rio was Omega’s president and COO last year, prior to taking his current position with Pegasus as the operator’s chief administrative officer.
Current operations are in good shape at the Florida communities that are open, but for the sake of standardization, Pegasus will bring in its systems, including those related to resident assessment, memory care, life enrichment and marketing, Hollister told SHN.
Pegasus will also honor the existing church partnerships that Omega has put in place, he said.
In some cases, the affiliated church is set to receive a percentage of cash flow upon stabilization of the community.
“There are mutual support systems in place between the church and the community, a cross-pollination of ministry on both sides,” Taylor said. “It’s a collaborative effort. They’re not involved in the day to day operations, but heavily involved in the day to day lives of our residents.”
The churches provide a pool of volunteers and potential residents, although the senior living buildings are open to anyone, Hollister said. In addition to the potential referrals stemming from the churches, he believes the new developments are well-positioned with respect to demographics and competition.
The Living Waters community is located near the massive retirement community The Villages, while Lake Vista is south of Atlanta, clear of the new supply that has hit other parts of the metro area, Hollister said.
The two Florida buildings that are already operational are each about 90% occupied and seeing good move-in ratios, although attrition has been higher than usual lately due to deaths and residents moving into higher care levels, according to Taylor.
Pegasus will receive management fees and incentive compensation to align its interests with Omega, and intends to co-invest in the two development projects in the works. This transaction marks another stage in Pegasus’ growth, after the company was founded to take on the 36 former Brookdale properties in a RIDEA deal with Toledo, Ohio-based real estate investment trust Welltower (NYSE: WELL).
Omega’s portfolio includes two other communities that will not be transitioning to Pegasus. Fairfield, Connecticut-based H.J. Sims is the majority owner of those properties, one of which is in Florida and one of which is in Alabama.