Atria to Manage 21 Communities for New Senior, Debuts Atria Retirement Brand in US

Atria Senior Living is taking over management of 21 independent living communities owned by real estate investment trust (REIT) New Senior Investment Group (NYSE: SNR). The portfolio marks the U.S. debut of the Atria Retirement brand, which up to this point has operated in Canada as Atria Retirement Canada.

The portfolio previously was managed by Winter Garden, Florida-based Holiday Retirement, and the communities are located in nine states concentrated in the Northeast, Midwest and Pacific Coast.

Since 2014, Atria Retirement Canada has grown under the leadership of Kristy Grange, and she will remain at the helm as the brand now expands into the United States. The move expands Atria’s presence in moderately priced independent living and is another step in its ongoing brand diversification strategy.


“Scale can really have value at the more efficiently priced part of the market, using technology, smart purchasing, the ability to create tools and standardize quality,” Atria CEO John Moore told Senior Housing News. “That’s a great place to be.”

Growth in this segment will be complemented by Atria’s expansion into other parts of the senior housing market, under different brands. 

“This is about creating depth at all the points along the way in the brand spectrum, as we look to position ourselves for the ‘seniors decade,’ being able to serve customers — both resident customers and owner/investor customers — at all the different price points and all the different types of products,” Moore said.


The Louisville, Kentucky-based company’s portfolio also includes communities operating under the Atria, Atria Signature and Atria Park brands, an emerging middle-market assisted living brand called Gladwell, and a forthcoming luxury brand being created in partnership with New York City-based developer Related Companies.

The New Senior transition is expected to be complete in April, at which point Atria’s total portfolio will number more than 200 communities across 28 states and 7 Canadian provinces, with 61 IL-only properties that represent about 31% of total units.

New York City-based New Senior’s portfolio encompasses 103 private-pay senior living communities across 36 states. Atria now manages about 20% of its portfolio, with Holiday managing 75%.

“This has been a stated goal of ours, to improve our operator diversification, and this is a great step in getting us not only a new operator but a great new operator,” New Senior President and CEO Susan Givens told SHN.

Transition timing

The partnership between Atria and New Senior is the result of conversations that have occurred over a span of years, Givens said.

“We’ve watched their successes and watched as they transitioned other IL assets into their portfolio … as we’ve been considering our priorities including our operator diversification, they were one of the main groups we were interested in,” she told SHN.

The assets that are being transitioned were chosen after considering the footprints of Holiday and Atria. The portfolio expands Atria’s California presence and marks its entry into the Pacific Northwest, Moore said.

They are not poorly performing communities, Givens emphasized Thursday during the REIT’s Q4 2020 earnings call, and in a followup interview with SHN.

“This [transition] really is not a statement about their performance or our view of [Holiday] as an operator at all,” she told SHN. “The assets have performed well and Holiday has done a really great job through Covid … It’s about us trying to accomplish other goals. Holiday understood that.”

Atria leaders also said the communities have been well-managed by Holiday. The buildings have the “timeless, resident-centric design heritage” pioneered by Holiday founder Bill Colson, Grange noted in a press release issued Thursday.

“There are some things Holiday was already doing that we like a lot,” Moore told SHN.

For example, he sees value in Holiday’s partnership with senior-focused technology company GreatCall, which was acquired by Best Buy for $800 million in 2018. Atria may augment existing tech in the building with its proprietary systems, which now are being sold to other operators through the wholly-owned Glennis subsidiary.

In terms of what might change for the portfolio under Atria’s management, the company has a track record of successful redevelopment and capital expenditure management, and Moore and Givens see opportunities to leverage this skillset in capital projects. While she does not envision “sweeping changes,” Givens told SHN that health- and wellness-focused changes will be one area of focus.

“Thinking about ways in which our communities can emphasize and focus on wellness … those are going to be big areas,” she told SHN.

New Senior believes that now is a good time to make the transition, given that Covid-19 vaccines appear to be turning the tide in the pandemic.

Holiday managed to largely overcome vaccine access issues facing independent living by creating its own network of partners. Atria has placed a high priority on vaccination, being one of the first providers to mandate that all staff be vaccinated. The provider is nearing 45,000 vaccine doses given in its communities, with nearly a 90% staff vaccination rate, Moore said. Atria may hold the transitioning buildings to different vaccination timeframes than the rest of the portfolio, but there are clinics scheduled in most of them.

“We hope that putting Atria in place now will result in a good runway for growth going forward,” Givens said on the earnings call.

While she declined to share details of the management contract, she stressed that it includes incentives to maintain strong owner/operator alignment.

A repeatable model

Moore has been an outspoken proponent of the multi-brand strategy in senior living, which is also being pursued by operators such as Discovery Senior Living and Eclipse Senior Living.

These providers believe that operating multiple brands is a way to scale up and increase penetration rates by serving different market segments with unique products.

One reason the approach is gaining momentum in senior living is the increasing focus on serving middle-market consumers, which represents a huge source of demand as the baby boomer population ages. Providers that already have well-established market-rate or luxury offerings are therefore considering new brands for more budget-friendly offerings.

Creating a scalable middle-market product has proven difficult in the past, particularly given fixed operating costs related to health care in assisted living. But independent living offers more flexibility, because less health care is provided and staffing models can be leaner. Since its founding, Holiday has focused on the middle market with its IL product, growing to become one of the largest operators in the United States with a current portfolio of about 250 properties.

So, inheriting Holiday properties presented a good opportunity for Atria to create a platform for further middle-market growth. Today, monthly rents in the transition portfolio vary across different markets but are around $3,000, with roughly 20 employees on staff at each community, Moore said.

“One of the great things about the Holiday product is that it’s a thoughtful, consistent design, and allows for an efficient, repeatable model,” he observed.

Existing Atria buildings could conceivably be brought under the Atria Retirement umbrella, Moore said, but he anticipates growing the brand mainly through developing or acquiring buildings that are similar to those in this 21-property portfolio.

“It gives us a platform,” he said.

In recognition of the Canadian roots of the brand and the work done by Grange and her team, a maple leaf will continue to be in the logo of Atria Retirement.

A first step toward diversification

New Senior’s fortunes have always been closely tied to Holiday, which remains by far its largest operating partner. The independent living giant is owned by Fortress (NYSE: FIG), and New Senior was externally advised and managed by a Fortress affiliate until management was internalized in 2018.

Following that move, New Senior in 2019 divested its assisted living and memory care assets. Diversification became imperative after that transaction, which made Holiday an even more dominant operator within its portfolio.

The partnership with Atria is a step forward and further diversification is a priority, Givens said Thursday, noting that the relationship with Atria could open up new growth opportunities in the future. 

In the near term, growth through new investment remains challenging, given that the pandemic has made underwriting acquisitions more difficult. But, the situation could improve as vaccine access reduces Covid-19 infection rates and leads to a more normalized operating environment.

New Senior already is seeing promising signs.

Like other senior living owners and operators, the REIT was hit hard between November 2020 and January 2021, as Covid-19 infection rates soared around the country. Occupancy trends worsened over those months, with a 150 basis point occupancy decline in Q4 and January occupancy declining 80 basis points sequentially. But, leads in January surged 22% compared with December, with weekly leads reaching their highest level since before the pandemic, Givens said.

New Senior’s leaders expect occupancy to keep falling but less rapidly, with another 60 basis point drop in February and a 30 basis point decline in March. The current lead activity suggests the potential for strong conversion to move-ins later this year. In addition, expenses have declined as occupancy has fallen, and Holiday has found novel ways of operating with greater efficiency.

New Senior’s adjusted funds from operations (AFFO) for Q4 2020 came in at $14.5 million, which was near the top end of the REIT’s guidance range.

As expansion again becomes possible, New Senior might not only diversify through new operating partners, but by adding more communities at different price points and potentially even other levels of care, such as active adult, Givens told SHN.

But, New Senior is bullish on the prospects for independent living and the middle-market product that Holiday specializes in and Atria is now putting its weight behind.

Independent living proved resilient in the pandemic, and Covid-19 reinforced the value proposition of IL as a more communal atmosphere than senior apartments, Givens said. Meanwhile, the huge cohort of middle-income baby boomers is on the way, and she sees “a lot of growth opportunities” with both existing and new operating partners.

But the primary focus on 2021 will be getting through the pandemic. Though occupancy declines have slowed down, census has not yet begun to grow for New Senior or the industry at large.

“We need to see real recovery to feel like we’re on the other side of this,” Givens said. “Our view is that if people feel safe and that the vaccine is effective, demand is there. To me, it all boils down to how safe people feel.”

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