Primrose Retirement Communities is shifting its growth strategy in a difficult development environment, with a current focus on growing in smaller, mid-level markets.
With the acquisition of The Addison of Pleasant Prairie on Feb. 1, the Aberdeen, South Dakota-based company has grown to 34 communities in 17 states. Since the company’s founding in 1989, its footprint has grown to include independent living, assisted living and memory care, according to founder and CEO Jim Thares.
Primrose’s most recent acquisition comes after the company had slowed its growth due to the impacts of the Covid pandemic. The land had been under contract in Kenosha, Wisconsin, near where The Addison of Pleasant Prairie is located.
“We were contacted by a broker about this community and structure-wise, it’s fairly new, and it fits within the model that we build, and it’s in a great location,” Thares told Senior Housing News. “And so we hope that with our experience and operational methods that we can make it a successful community for that part of Kenosha.”
The approach Primrose takes to growth has largely been through development over the years, and each community is a separate LLC. Of the 34 communities Primrose owns, no more than four have been through acquisitions.
“We have an investor pool. We start by just word of mouth from people all around our community, it’s a private-placement offering,” Thares said. “As we develop or purchase a property, we send out an offering. And that private placement gets filled pretty quickly today.”
The company last completed a new-build in Lubbock, Texas, but has pressed pause on development for now due to the difficulties of building anew.
“In an industry that most of your residents are basically fixed income, it’s challenging to continue to raise rates. So we have really backed off right now,” Thares said.
The company will remain focused on acquiring communities in markets with populations largely between 50,000 and 150,000 and access to medical centers.
Despite the difficulties, Primrose is seeing other wins, including a general reduction in the use of staffing agency workers and current occupancy recovery in the high 80% range, not far off from the company’s usual low- to mid-90% average occupancy range.
“We feel very positive about moving forward and the markets we’re in and the facilities we have,” he said. “We feel there’s a lot of opportunity in our markets and our industry. And so the opportunities will come. It’s just staying focused on what we do and what we’re good at.”
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