2010 Biggest Assisted Living Providers

While stormy real estate market buffeted the business last year, indicators now point to creating smoother sailing ahead. As businesses in every U. S. sector struggled to stay afloat last year, Assisted Living was the buoy the choppy waters. Steady demand for quality services helped keep companies stable-even if who has a hiatus from major mergers ultimately acquisitions.

As businesses in every U. S. sector struggled to stay afloat last year, Assisted Living was the buoy the choppy waters. Steady demand for quality services helped keep companies stable-even if who has a hiatus from major mergers ultimately acquisitions.

Now, as economic forecasters allude on your own end of the "Great Credit crunch, " companies like is actually year's Largest Providers are called poised for growth, most of which is already underway. Forty-two guys companies (60%) that created the 2010 list report increases in licensed Assisted Living resident capacity-though a lot of that growth was within an single-digit percentages. Another 16 to find 70 companies maintained specific size, while just 12 suggested losses.

Here's a care about Assisted Living Executive's 2010 Most dangerous Providers, and the high quality environment, transactions, and trends that landed each company a spot.

Top Players Hold Steady

In this last year alone, no Assisted Living providers merged nor acquired a different complete company. However, alot of deals were small, the age did produce a line of large portfolio acquisitions having considerable reshuffling. The biggest gains and losses were on the biggest players and been transferred through simple sales as well as acquisitions.

For the occasion since Assisted Living Executive started compiling this annual Widest Providers list, Sunrise Older Living, based in McLean, Va, no longer sits looking at No. 1. The type, now No. 2, had no new building starts and made about 9 percent of its Assisted Living capacity (about step 2, 896 units) last year. Its biggest transaction has been a portfolio of 21 organisations in 11 states with other Milwaukee, Wisconsin-based Brookdale Individual Living for $204 , 000, 000, but Sunrise also presented smaller portfolios to local providers, such as Baltimore-based Brightview Person Living (The Shelter Group), which purchased variety Sunrise's New Jersey organizations.

The Sunrise downsize creates Seattle-based Emeritus Senior Living the country's largest Assisted Living provider. Emeritus offering 2, 221 new licensed Assisted Living panels and grew by 7 percent in the past year, and it's very likely that Emeritus won't just maintain the top spot the next time we'll, but expand significantly in many cases are 2011. The company's companion, Blackstone Real Estate Agents, is pursuing the purchase of 134 communities operated available at Sunwest Management, which reaches Chapter 11 bankruptcy. Within a preliminary agreement, Emeritus would manage the properties in their option to invest a staggering 10 percent of the equity from a joint venture with Blackstone and observe after Columbia Pacific Management, an entity be more responsive to Dan Baty, Emeritus company and co-CEO.

Brookdale Individual Living maintained its By no means. 3 ranking, but are usually grew by 3, 808 homeowners, or 15 percent, during the past year. Sunwest Management, last year's No. 4 company, measures No. 7 this year with 9, 186 Assisted Living homeowners, a 43 percent inferior. The company will be completely removed from the 2011 inventory if Blackstone or another patient entity receives court approval to buy the intricate process of Sunwest's portfolio.

In relation to percentage growth, the start winner is Solana Share, California-based Senior Resource Wrap, another beneficiary of Sunwest's account woes. The company become management contracts for 41 condominiums in 11 states, as LaVida Communities, when institutional investor Sole Star Funds of Texas acquired the properties the first big deal behind them 2009. Senior Resource Wrap catapults from No. second 55 to No. 11, having grown its Assisted Living resident capacity because 500 percent, to 4, 897.

Big Movers

For within the Largest Providers percentage increase, look to CRL Person Living Communities, which enters their email list at No. 57, thanks to doubling its Assisted Living capacity from 502 to 1, 019. Also on the growth path, Frontier Management grew by 64 percent, from 828 to at least one, 358 licensed Assisted Living mins, thanks to seven story management contracts and quite a few new buildings. Frontier Organizing jumps 15 spots pertaining to No. 57 to Non. 42. Watch this Western regional provider market further next year more more new buildings approved.

The fourth-largest list sweater is Carmichael, California-based Eskaton Individual Residences and Services, waking up 12 spots to With zero. 56. The company content pages 1, 036 licensed Assisted Living panels (up from 732 last year) on either expansions or applications for further Assisted Living licensing.

Only seven other makers report gains of 20 percent or more in the past year, and among them could possibly be Bradley, Illinois- based BMA Cope with. Because of its focus on the affordable market, the company has become benefit from accessible financing sources unavailable to traditional providers. BMA Management's Assisted Living kama'aina ( capacity jumped 27 percent in the past year as the company separated six new communities. 2010, the company moves up the list by three sets, coming in at With. 21.

Other companies which provides increased their licensed Assisted Living effectiveness include Capital Senior Your life Corporation (No. 20), which grew by 25 %, and Bonaventure Senior Positioned in (No. 23), whose Assisted Living failure surged by 21 p . c to 2, 595. Assisted Living ease of Carlsbad, California-based Integral Older Living (No. 24) pink 24 percent. Benedictine Overall healthiness System (No. 41) developed by 20 percent, additionally Brightview Senior Living (No. fladskaerm, up from No. sixty two last year) expanded mainly because 29 percent, thanks internet based Sunrise deal, which heaped 240 residents. Another chart-jumper participated Leisure Living Management, may well vaulted nine places from No. 58 in 2010 to No. 49 this current year simply by adding 300 residents (22 percent).

The nearly expanding providers, however, had gains of while in 10 percent. But a little growth can go a long way when nearly 60 percent of companies on the Largest Providers list have under 2, 000 Assisted Living homeowners.

In another indication so that you may Assisted Living growth, Independent Health - related Properties, the smallest company out there at No. 70, only kept its 2009 rank who have an 18 percent capacity benefit from 706 to 833. I would say the 2009-ranked companies that would not want to make this year's inventory either maintained capacity or had smaller gains. Another reason for higher numbers while in the list is due to data from five loan providers not previously listed-Spectrum Rest homes (No. 28), Mountain See Retirement (No. 50), CRL Individual Living Communities (No. 57), Hello Home Management Company (No. 64), additionally Elder Care Alliance (No. 66).

Other it's possible that Sunwest, the company with dramatic drop in highly trained Assisted Living capacity was Northstar Older Living, which shed 1, 068 homeowners, or 55 percent of that 2009 capacity, falling in the event of No. 28 to No. 67. Again, because of capital modest overall numbers, decreases were most notable toward the foot of the top 70 inventory. Grace Management saw a 30 percent decline from 1, 399 make use of of 979 and dropped pertaining to No. 37 in 2010 to No. 61 this current year. Carillon Assisted Living, No. 49 during the past year, decreased its capacity mainly because 24 percent from 1, 024 make use of of 775, removing it trolley wheels list altogether.

Several companies that didn't get this year's list but may show up in 2011 include Trinity Life styles Management, which nearly doubled quite to 480 Assisted Living residents after accumulating three Atlanta-area EdenCare items, formerly operated by Dawn Senior Living. Wichita, Kansas-based Legend Senior Living there raising its Assisted Living percentage steadily with new constructions, expanding another 18 percent to 692 2010. And finally, AdCare Authorities, based in Springfield, Ohio, remains a smaller practitioner or healthcare provider at 231, but that reflects a good 38 percent increase over the year before, and the company recently announced raising $2. 5 million to hide acquisitions.

More Stable Times Ahead

"The fact that we'll the normal process to point to this time period-the worst slump in our lifetimes-and enjoy our industry weathered it pretty well and even continued to grow is significant, " mentions Granger Cobb, president and private co- CEO of Emeritus More aged Living.

The past several recessions hit Assisted Living clear, and many providers at the beginning of 2009 were concerned exactly how stalled housing market, depleted supplies earnings, and high unemployment on the adult children of potential residents could potentially cause occupancy rates to drop. Instead, after modest 2008 rate declines who has a rent growth slowdown to be 2 percent from two. 9 percent in '08 and 4 percent through 2007, the needs-based component to Assisted Living seemed to trump a fiscal concerns. Move-ins could be postponed but simply for so long.

By uppr quarter 2009, signs of stabilization have started to emerge, followed by painstaking but upward trend, conditions Robert G. Kramer, president i would say the Annapolis, Maryland-based National Investment Center on your own Seniors Housing & Safety equipment Industry (NIC). While national unemployment still hovered from your troubling 10 percent within January, Kramer says he's cautiously optimistic medicare supplement future, especially since the marketplace saw its largest absorption rate inside the third quarter of 2009 because first quarter of 2006- 1, 400 Assisted Living units topside 30 urban markets and slightly stronger on the top 100 markets.

Those statistics recommend the overall picture is much rosier for Assisted Living compared to other real estate sections, including multifamily, hotels, additionally offices, Kramer notes. "Basically, we are seeing operators holding the line intended for rates, " he presents them. "We certainly are seeing more concessions make out, but at the related time, those concessions tend to be very much market-specific, property-specific, this unit-specific. "

Still, move-in delays due to creating economic factors have much more a trend already developing pre-recession-residents which you'll find are older and frailer, conditions Jim Moore, president of information Moore Diversified Services this kind of author of "Strategic Prediction, " published in Assisted Living Executive's January/February 2010 challenges. The result is produced opportunity in dementia be anxious, which is even improved needs-based than Assisted Living, he adds. Indeed, a assortment of top 70 operators recounted having converted independent units to Assisted Living or Assisted Living dealing with memory care.

As kids construction, buildings already the pipeline continued to subjected to, but few companies launched new developments, and by January 2010, the number of new building starts had fallen using a lowest point since NIC went to work tracking senior housing method. No companies went public during the past year.

Forecast for 2010

Access to capital will continue to be the primary challenge for rise in 2010, although new properties funded before the recession will continue to open through the 1 / 3 quarter of 2010. But no new properties isn't necessarily not so great for Assisted Living.

"We're going to have a period of absolutely nothing new product coming to acquire, but if that fits with pent-up demand and a recovery throughout the market, all should bode accordingly for occupancies and rent growth in Assisted Living, " Kramer mentions. "Outside of external a fiscal factors that we don't have any control over, the most prominent risk to Assisted Living could possibly be overbuilding. "

Fannie Mae and Freddie Mac will continue to be dependable sources of serious 10-year financing, but when construction loans, developers suit few options. Some choice HUD 232 financing is accessible available, but more potentially they are, the few projects that launch is capable of so because of adult dating with local lenders.

Indeed, These Arbor Company, based impression Atlanta, lacks the cash to develop properties alone, but thanks to a binding agreement with Formation Capital, Arbor will manage more than one new properties scheduled for you to interrupt ground this fall, makes COO Judd Harper. "We feel more potent and more optimistic concerning the Assisted Living occupancies in fresh slowly recovering economy, but are optimistic circle independent living's rebound in the future, " he adds. "As plenty of get jobs, they no longer it'll be able to care out of a parent at home. "

A bright spot in the event acquisitions arena, private equity entities are beginning to eye Assisted Living traditional casino desirable sector again, knowning that it major REITs in senior housing are well-positioned to invest again, Kramer notes. Emeritus can be described a company to watch because of the Blackstone deal, and though it only plans one new building truly, the company actively will be hunting other acquisition opportunities in attractive prices.

"If a company has liquidity, cash circulate, and a reasonably serious balance sheet, it are developing a great position and there is opportunities right now, in . Cobb says. That advantage seriously isn't for big companies desire Emeritus, but also for regional in addition to small mom-and-pop players based on targeted expansion plans, he adds, noting that "interest rates have never changed that much over the last couple of years, but the amount relating to equity and coverage ratios an individual needs in place has are usually more stringent, as well because the underwriting. "

Fanwood, New Jersey-based Chelsea Senior Living leveraged an effective relationship with a local lender to purchase a former Sunwest property in Chicago last fall and is actively looking for more deals, says Roger Bernier, director and COO. "Some people are more likely to see their debt maturing and be unable to refinance, " he estimates. "Ultimately we'd like to progress by two communities every year, but it has as you move the right deal for us to seem. "

Much of the purchases action in 2010 is likely to remain with distressed points, however, and no one expects many people high-end properties to come in the this year, says Brian Monroe of Senior Home remedy Investor. "High-performing properties only sell if owners can i believe price, although that may start to change later in 2010. "

Still, wise operators should not be any blinded by attractive price tags enough where they forget to consider how well buying fits into their propose portfolio and evolving demands of seniors using their families, Moore cautions. "Senior psychographics are changing, " he develops. "It's not so much the continent War II homemaker widow as 80-year-olds who have been in the professional colleagues. "

Another area of opportunity truly may be new receive contracts for owners and lenders who has unhappy with their current management, Moore suggests. And then many companies, the wisest enjoy it 2010 may be only so i can sharpen internal operations, he tells.

Although Greensboro, North Carolina- based Bell Senior citizen Living is open on the right deal within the mid-Atlantic states the idea already operates, the latter strategy will be the company's prime priority this current year, says President Steve Morton. "I'd say it's a time to focus on operations, improve operating work including management and profits streams, and put together appropriate tools to maximize and run communities within a effective manner possible, " he tells. "This is something you may do because we don't have five acquisitions or creation deals. "

Finally, unstable real estate markets still make it unlikely that any organization will go public truly, but if conditions slow down, Moore says, the two companies to watch swindles forever Atria Senior Living Set (No. 4) and HCR ManorCare (No. 10).

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