Willow Ridge Senior Living is continuing to grow rapidly, and the New York-based operator expects to hit 25 communities sooner than originally planned.

The company’s growth in 2024 is moving at a fast pace. Nearing the end of 2024, Willow Ridge now manages 12 communities, a number that the company is trying to more than double in the years ahead.

Last year, Willow Ridge CEO Michael Morris shared how the company was aiming for 25 communities by 2028. At the operator’s current pace of growth – primarily through acquisitions – the company could reach that goal in 2026, two years ahead of schedule.

“This year has been exciting for us because we’ve outpaced what we did in 2023 and we’re on track to double our acquisitions this year,” Morris told SHN.

But that’s not to say the year hasn’t been without its own unique challenges on wage pressure, rising expenses and a less-than-favorable interest rate environment.

Acquisition pipeline remains active

Willow Ridge is focused on distressed acquisitions to grow its senior living portfolio.

In February, the company acquired a community in Florence, Kentucky, as part of a real estate investment trust (REIT) divestment.The company stabilized the community and increased occupancy over the course of this year, Morris said.

“It’s been one of our best turnaround case studies that we’ve done to-date,” Morris added.

In June, Willow Ridge acquired two communities in western New York, also REIT divestments. Through “cost containment” and staff restructuring, Morris said the company “got things moving in the right direction.”

The company also took on management of a community in receivership on Long Island, New York, with the transaction closing in late September. The community marks the company’s largest transaction to-date and includes 192 units across independent living and assisted living. Willow Ridge now has four communities formerly managed by Atria Senior Living, Morris said.

Another deal in the pipeline, set to close at the end of the year, includes Willow Ridge bringing on a community in Kansas. Another acquisition in the pipeline is still in the works in Massachusetts—looking outside of its regional density in New York state.

“We’re geographically agnostic so we are not restricted anywhere,” Morris said. “We’re open to going to the right areas for the right opportunities.”

Executing on turnaround deals requires ‘lean’ operating model

Willow Ridge works with capital partner Cougar Capital, and even as access to debt has required a “much larger equity check,” Morris said the distress-driven opportunities remain plentiful for operators well-versed in turnaround deals.

In regard to the Sept. 18 Fed action on interest rates, Morris added that the move has created some “optimism from our debt providers.”

Succeeding in distressed acquisitions requires emphasizing staff restructuring, cost containment and driving occupancy re-growth, Morris said.

“Quality of care is of the utmost importance in these situations,” Morris said. “We see that national operators have a very heavy model from a labor perspective that is not conducive to bottom line performance.”

Through “organic lead generation,” as Morris puts it, WIllow Ridge is able to drive local marketing and increase occupancy more effectively—while relying on a “leaner” operational model to help cut costs.

“Those are the big levers that we pull to make a difference,” Morris told SHN.

In 2025, Morris forecasts challenges on wage pressure in New York where the minimum wage has increased in recent years.That creates challenges for the operator navigating long-tenured Willow Ridge employees and their compensation compared to new hires.

Willow Ridge raised resident rates on average of 6% across its portfolio, reflecting the need to offset wage costs.

“Coming in behind some of the national operators, our rate increases have been welcomed by those residents who historically have been getting higher increases,” Morris said.

In the past, senior living operators often pushed through 3% to 5% annual rate increases, with Morris seeing a landscape where the low end of that range now sits slightly higher than in the past.

“A lot of it is going to determine what our employee pressure looks like in terms of wages, but I expect 2% to 8% to be the new norm,” Morris added.

By taking smaller steps in scaling operations, Morris believes Willow Ridge is able to execute on its lean operating model, rather than building out a large corporate office team.

“Each acquisition we’ve done has been cleaner than the last and our acquisition checklist is more refined and efficient,” Morris said.

With wage pressures in mind, Morris said Willow Ridge would tackle employee satisfaction as the company’s “largest focus” in 2025, with the company recently hiring a vice president of human resources to tackle retention and recruitment of staff.

That could take the form of decreasing overtime spending, along with a focus on recruitment of qualified care staff. To boost employee satisfaction, Morris said the company was evaluating ways to improve benefits for staff in 2025.

“We want to prevent turnover and improve upon our retention,” Morris said. “Employee satisfaction is paramount.”

In terms of what deal opportunities could lie ahead, Morris expects a “large pruning of portfolios” to occur over the next 12 months, allowing Willow Ridge to strategically choose the areas it seeks new growth next.

“We’re staying disciplined and are growing for the right reasons,” Morris said.