A continuing care retirement community (CCRC) owned by senior living nonprofit Lifespace Communities has filed for Chapter 11 bankruptcy.
The 283-unit community, The Stayton at Museum Way in Fort Worth, Texas, defaulted on liabilities related to bonds issued in the amount of $109.7 million, including interest, according to a bankruptcy notice filed in the U.S. Bankruptcy Court for the Northern District of Texas on Nov. 5. Bloomberg Law first reported on the story on Wednesday.
A prepackaged plan of reorganization has been filed with the court.
The CCRC was owned by Addison, Texas-based Senior Quality Lifestyles (SQLC), which executed an affiliation agreement with Des Moines, Iowa-based Lifespace Communities in May after about a year of talks. That affiliation involved three SLQC buildings coming into the Lifespace stable. The combined organization, which bears the Lifespace name and banner, had 15 communities in eight states after the affiliation.
Delays in construction coupled with poor move-in sales led to a “ripple effect” that imperiled the community’s ability to honor its long-term debt obligations, according to the court filings. SQLC ended a previous management agreement with Greystone in 2017 and tapped Seniority, Inc., to take over and implement cost-cutting measures shortly thereafter — but those measures failed due to pressure from other industry competitors in the Fort Worth market.
As of Oct. 25, the community’s average independent living occupancy rate was 93.6%, while both its assisted living and memory care units were 100% full, according to the court filings. The community’s skilled nursing units were nearly full, with a 97.8% occupancy rate.
In order to resolve its Chapter 11 case, the CCRC plans to restructure its bond obligations. That plan calls for the community to pay a principal of almost $106 million, plus accrued and unpaid interest. The new bonds would be at a fixed annual rate of 5.75%, and mature in 2054, among other conditions.
“The restructuring process will keep The Stayton financially strong,” a representative for LifeSpace told Senior Housing News. “Most importantly, there will be no financial impact on current residents, team members or vendors.”
An influx of new senior housing supply has hit various markets hard in recent years, and Dallas-Fort Worth has been among those to see a high percentage of construction compared to existing inventory, according to data from the National Investment Center for Seniors Housing & Care.