Commonwealth Senior Living is growing with the goal of enhancing the value of its senior housing portfolio — and that could mean expanding some of the 10 new communities it brought on board last year.
The Charlottesville, Virginia-based senior housing operator expects to add three to five communities annually over the next five years. Last year’s growth was fueled by Toronto-based real estate investment company Invesque’s (TSX: IVQ.U) acquisition of Commonwealth Senior Living and 20 of its communities for more than $340 million.
Under Invesque’s umbrella, Commonwealth is focused in part on properties that can be expanded or modified to better suit the market in which they’re located. The company is also focused on properties that fit its strategic footprint, according to Earl Parker, Commonwealth’s president and COO.
“The way we’ll continue to grow is by looking for those opportunities where we can add value as opposed to just adding another community to the bucket,” Parker told Senior Housing News.
Commonwealth is interested in taking on buildings in markets where it already has a presence. The company is also open to communities that could benefit from additional cap-ex to add more beds or another level of service, such as memory care.
Last year, the operator took on 10 Invesque communities formerly managed by Greenfield Senior Living in Tennessee, Virginia, Maryland, and Pennsylvania, bringing its total community count to 34. In one of those communities — Commonwealth Senior Living at Harrisburg in Harrisburg, Pennsylvania — the company is adding a secure memory care neighborhood with the capacity for 18 additional residents.
“I don’t see us regularly having 10 communities come on board at a time,” Parker said. “The key factor in when we look at evaluating opportunities is, is there something we can add value to make a significant difference to the community?”
Among its new Invesque properties, Commonwealth believes the majority have the potential for expansion.
“We think that at least half of the communities have opportunities to expand,” Parker said. “We’re in the process of confirming through those details right now.”
At the same time, the operator is focused on keeping workers at the communities it takes over. The company’s executive team last year embarked on a “road show” at its new communities with one simple message in mind: we want you to stay.
“We met with the executive directors, the department heads and the frontline teams to convey the message that we did not want them to go anywhere,” Parker said. “Our goal was to retain 100% of the associates, and I think we probably ended up at 96%.”
Commonwealth is also looking at adding other services to its communities, such as its indoor “microfarm” concept with Charlottesville, Virginia-based Babylon Micro-Farms. Currently, the service is offered in four Commonwealth communities.
“We would love to see it in every building if it makes sense in every community,” Parker said.
Looking ahead, Commonwealth plans to work with Invesque to increase its presence in the markets where it’s already located but has room to grow. States that hold particular interest include North Carolina, Tennessee and Maryland.
“We see opportunities to add value for ownership and get economies of scale by increasing the number of units under management in a good market,” Parker said.