Real estate investment trust Welltower (NYSE: WELL) has tapped Frontier Management to take over operations of 20 memory care properties currently operated by Silverado.
The transition will take place over the next few weeks, and Frontier’s signage should be on the buildings by June 30, according to an internal Silverado memorandum obtained by Senior Housing News.
“While we don’t agree with this decision, it’s the reality, and we need to respect it,” Jeff Frum, Silverado senior vice president of sales and marketing, told SHN. “We will move forward focusing on our vision to improve the quality of life for the memory impaired, their families and each other. We stay true to our purpose to change the world in the way the memory impaired are cared for and the way people pass from this world with the focus on living life to the fullest.”
Welltower declined to comment to SHN.
Most of the transitioning properties — 11 — are located in Texas, the memo states. The other nine are spread across Arizona, Illinois, Utah and Wisconsin.
Silverado’s remaining 19 communities, as well as its home care and hospice businesses, will continue to operate as usual, the memo stated.
Irvine, California-based Silverado specializes in standalone memory care and was the fifth-largest U.S. memory care operator last year, according to rankings compiled by industry association Argentum. The company has also been making a concerted effort to expand its hospice business.
Portland, Oregon-based Frontier was the 11th-largest memory care operator and 19th largest overall operator as of last year, according to the Argentum rankings.
Frontier has an existing joint venture relationship with Welltower, which listed four Frontier properties in its senior housing operating (SHO) portfolio in its Q1 2019 supplemental earnings report. Welltower has an 87.3% ownership stake in those communities.
There is clearly excess supply impacting memory care in some markets, Frum noted, but he said that Silverado’s remaining portfolio is in good shape and company leadership is optimistic.
“The occupancy of Silverado’s remaining memory care communities is very strong with many over 90% occupied, and our hospice sites are very well established,” he said.
Development activity is proceeding, which will expand the company’s portfolio of buildings that it both operates and owns.
“We have focused our new development energy on our core businesses of memory care and hospice,” Frum said. “In fact, last month we opened a new purpose-built North Shore community in Glendale, Wisconsin, which has double the occupancy we expected at this point.”
Later this summer, Silverado anticipates opening a new building in North Orange County, California, and another Golden State community — in Ventura County — is on track to open in summer 2020. A hospice expansion in North San Diego County is also moving forward.
Welltower is not the only REIT transitioning memory care buildings to a new operator.
Murfreesboro, Tennessee-based National Health Investors (NYSE: NHI) has tapped Chancellor Health Care to take over management of five standalone memory care buildings formerly operated by Dallas-based Autumn Leaves.