Sonida Senior Living (NYSE: SNDA) is taking a new approach to quality and standards that involves separating communities into multiple pricing tiers, each with rates and services geared toward their respective place in the market.
The company’s leaders also are underway on the next phase of senior housing operating portfolio (SHOP) growth with a focus on pricing, community turnarounds and the ongoing integration of CNL Healthcare Properties assets.
The Dallas-based senior living provider reported same-store SHOP net operating income growth of 15.6% in the third quarter of 2026, with margins growing 230 basis points to 31.8%.
CEO Brandon Ribar pointed to opportunities in recently acquired properties, care revenue and a data-driven pricing initiative planned for 2027 as proof that the company has lots of ground yet to gain.
“We feel like there’s still plenty of upside in the portfolio,” Ribar said during the company’s Thursday’s earnings call with investors and analysts.
Sonida’s stock price was $34.06 at market close on Thursday, a loss of 7.97% or $2.95 per share compared to the day prior.
Same-store weighted average occupancy was 88.6% in the third quarter, an increase of 200 basis points compared to the same period last year. Revenue per occupied unit increased 4.6% to $5,413, helping lift resident revenue 7.3% to $163.5 million.
Across the total SHOP portfolio, NOI increased 17.2% to $55.3 million, while occupancy reached 87.4%. The difference between total and same-store occupancy reflects additional lease-up opportunities in newer acquisitions.
Ribar said Sonida was still reporting occupancy gains through October despite a slight deceleration in occupancy and revenue-per-occupied-room growth.
“The opportunities to grow things like level of care and other ancillary revenues are something we’re going to be highlighting and targeting in 2027,” he said.
Pricing tiers, investments in operations
Sonida’s leaders plan to roll out a more detailed pricing approach in 2027, using operating data to evaluate rates and capital investment at the unit level. This comes after Ribar noted earlier this year that the company’s data platform was “central” to the company’s future growth plans.
This effort pairs with a new internal framework for standards around dining, amenities, care and lifestyle activities across different community tiers, known as Sonida Collections. Changes to dining programs at various communities are underway, with assisted living and memory care renovations and upgrades also on the docket.
“The goal is to ensure that the experience in every community is aligned with its price point and the value it delivers,” Ribar said.
These “significant investments” in new corporate culinary leaders also include rethinking menus to be “chef-led” and “tailored to each collection” to enhance dining across the company’s growing senior living portfolio, “delivered in a way that reflects what residents value at each price point.”
The Collections program remains in its early stages, Ribar said during the call. He expects sales, marketing and rate-setting changes to provide the most immediate benefits in the near-term.
“We started on the dining front and really investing on that side, and we’ve got a lot of work to do, but are seeing immediate opportunities in how we’re planning for growth on the rate side in 2027,” Ribar said.
At the same time, Ribar sees further opportunities for “efficiency [in] our labor model,” using the Collections framework to “set the standards and build our operating model even more specific to those tiers.”
“It’s going to help with margin; it’s going to help with pricing and ultimately it’s going to deliver a better product that’s aligned with the dollars that the residents are paying on a monthly basis,” Ribar said. “I think we’ll continue to share more of the efforts on the collections front.”
Sonida leaders also are improving the company’s share of prospective residents reached without the aid of third-party referral services. Internally generated leads account for just over 70% of the company’s total lead volume, Ribar said. Digital leads at same-store communities owned before 2026 grew 30.6% compared to 2025, and move-ins from digital sources rose 13.6% from last year.
“We just want to keep pushing up on those internally generated percentages because we see better conversion,” Ribar added.
Sonida is set to invest $250 million on acquisitions in 2026. The company purchased seven communities after the third quarter totaling $150.2 million and spanning 620 units.
Ribar described a blended initial capitalization rate of approximately 3% to 5% across completed and anticipated acquisitions, with some communities operating at a loss. The company sees opportunities to stabilize yields above 9%, he said.
“We’re buying at a cash-flow-negative position and see really strong upside,” Ribar said of one or two acquisition targets. “It might just take a little bit longer because of that lift required.”
Existing acquisitions demonstrate this recovery potential, as occupancy at four communities acquired in 2025 increased from 52% in 4Q25 to 75% occupied today, with NOI improving from negative 1% to 15%.
SHOP margins decreased sequentially from 29.9% in the second quarter to 29.1% in the third quarter, with leadership attributing the decline to seasonal labor and utility expenses and not diminishing fundamentals.
“We have a high-quality portfolio, a platform that consistently converts occupancy gains into margin and NOI growth and a leadership team with the continuity to execute our strategy,” Ribar said.
CHP integration continues
Sonida also continues to make progress on transitioning communities associated with CNL Healthcare Properties. Sonida has transitioned management of 19 of the 54 CHP properties as of Nov. 1, with the first 14 onboarded communities generating year-over-year net operating income (NOI) growth of 33.2% and margins growing 600 basis points.
However, those communities started with weaker operating results, and Sonida leadership expects more moderate growth from subsequent transitions since the remaining communities generally have stronger performance.
Sonida continues to advance plans for 43 of the 54 communities, including eight non-core properties set for sale. When asked about the 11 remaining properties, Ribar said they are managed by two operators that Sonida has strong relationships with.
During the call, analysts questioned leaders on the potential savings from replacing CHP’s third-party management agreements, and Ribar said Sonida can operate at a stabilized cost equivalent to 3% to 3.5% compared to the 5% tied to the $19 million in management fees.
“That wasn’t built into our assumptions around the CHP integration, but we still feel confident that that’s the upside opportunity,” Ribar said.
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