Sonida Senior Living (NYSE: SNDA) reported its highest occupancy rate in the company’s history during the second quarter of this year. With better operational results in tow, the company is also plotting its next growth push.

On Monday, Sonida leadership announced that the company’s average occupancy now stands at 87.9%, up 220 basis points compared to the same period last year. The Dallas-based senior living provider’s operating margins also increased in the second quarter of 2024, rising 400 basis points to land at 28%, according to CEO Brandon Ribar.

With the positive momentum at its back, Sonida has line of sight on 90% occupancy, with the census mark being the company’s “next significant goal,” Ribar said. Just four communities across the company’s 61-community senior living portfolio remaining are below 75% occupancy, and Ribar said that integration and regional leadership support will be key to elevating those properties.

“We need to see continued focus on some of those communities that are lower-occupied, and they’ll bring up the portfolio average to that [90%] mark and above,” Ribar told SHN in an interview following Monday’s earnings call with investors and analysts.

With strong rate growth within the portfolio and an emphasis on staffing support, Ribar sees a path to further margin expansion, an elusive prospect for many operators in the industry.

“We still feel there’s an opportunity to grow the margin from where we’re at today,” Ribar added.

He also sees an opportunity to grow the company’s holdings, including by acquiring senior living properties or engaging in joint-ventures with others.

During the second quarter of 2024, Sonida reported a net loss of $9.8 million.

Sonida’s stock price rose to $29.14 per share, up 0.53% as of market close on Monday.

Sonida to continue ‘simple and concentrated’ growth

Other growth during the second quarter of 2024 included a 400-basis point increase to margins, to 28%.

Compared to the first quarter, revenue per available room (RevPAR) increased by 3.3% to $3,673, and revenue per occupied room (RevPOR) increased by 3% to $4,263, according to the company’s financials released ahead of Monday’s earnings call.

Earlier this year, Sonida highlighted growth priorities, including an emphasis on leadership hiring, investments in capital and programming, and stabilizing underperforming communities. As part of that, the company invested $12 million in technology and community-based capital expenses for recurring maintenance and other capital expenditures.

In the second half of the year, Sonida is turning to three “key deliverables” to inform its way forward: Creating conditions for positive cash flow, improving operations at recently acquired communities and identifying and executing on acquisition opportunities.

The company also recently expanded its memory care program, known as Magnolia Trails by adding an additional care level to better serve incoming residents and improve the company’s operating health.

“The collective impact of these efforts and investments drove significant improvement across our lower performing communities in Q2, and strengthened key operating metrics across the board,” Ribar said during the company’s earnings call Monday.

In terms of new acquisitions to the portfolio, Ribar said Sonida would continue to acquire “high-quality, recently constructed communities” for value-add opportunities.

During the quarter, Sonida completed the purchase of nine communities, spending $50 million at an average basis of under $125,000 per unit. The acquisitions added further density to the existing markets in Texas and the greater Southeast where the Dallas-based operator has a footprint.

In July, Sonida entered into a joint venture with affiliates of Palatine Capital Partners as part of a four-community senior living portfolio in Texas and Georgia, acquired through $12.5 million in cash and financing of $21.8 million in senior mortgage debt, with Sonida as the 51% owner in the joint venture. Sonida will manage the communities in exchange for a management fee.

Ribar noted during the earnings call that Sonida’s growth focus “remains both simple and concentrated,” focused on regional and value-add acquisitions.

“We can be thoughtful and aggressive in how we’re pursuing current [acquisitions], as long as they are within our sweet spot, so we continue to stress the Midwest, Texas, and the Southeast where we are seeing some really interesting opportunities,” Ribar said. “When you see a really nice opportunity in the market, you want to be thoughtful, but you want to be aggressive in taking advantage of it, because those things can change quickly.”

Looking ahead, Ribar said Sonida would continue to emphasize strong local leadership development as the “key to our success” in hiring and retention. The company has launched an integration team led by Chief Clinical Officer Tabitha Obenour to establish best practices in operations for new communities that enter the Sonida fold.

“Half the battle is just getting to know where everything lives and what different types of systems we use, and how they’re integrated into day-to-day life,” Ribar told SHN. “It’s about establishing relationships with local leadership and showing them how Sonida has proven to be successful.”

Also in the second quarter, Sonida expanded relationships with four new lenders offering debt capital for recent acquisitions. Additionally, resident rates increased by 9.4% compared to last year, in conjunction with the reworked care levels through its Magnolia Trails memory care program.

For the remainder of the year, Ribar said Sonida would continue to pursue the acquisition of senior living assets, either as a sole owner or through a joint venture structure. Opportunities abound as defaults continue and distress drives transactions, leading to potential sales—all of which mean well-capitalized companies can add communities at attractive prices.

“We want to stay true to our strategy, and we feel there’s a significant amount of opportunity in the immediate term and in the near-term future,” Ribar told SHN.