Trustwell Living, founded by Larry Cohen, the former CEO of Capital Senior Living, just announced its first acquisition. The senior living community is located in Springfield, Illinois and has 67 units comprised of 55 licensed assisted living units and 12 independent living units. While there are no memory care units, they will be in the future plans for the community.
The community was built in 2005 with about 70,000 square feet, so it is large for a primarily assisted living community with just over 1,000 square feet per unit. The apartment units are bigger than average, and there are two large atriums. While it shows well, Trustwell does plan to start some capital improvements to help boost census. Census was not stabilized, partially because of the pandemic, but all the communities in the local market are at 90% occupancy or better, with a few above 95%. This tells us that with some staffing tweaks and physical upgrades, they may be able to increase census very quickly, especially since it is not a large community.
Although no details have been disclosed, a little sleuthing in Springfield revealed that this community had been operated by Bickford Senior Living, so it was most likely sold by the landlord, National Health Investors. Bickford’s portfolio with NHI has been in trouble since the beginning of the pandemic, and NHI has had to decide to sell some of the communities, find new operators or restructure leases. Bickford’s 41 communities with NHI bottomed at 75.0% occupancy in March 2021, peaked in November 2021 at 82.4%, a 740-basis point increase, but have since declined down to 79.4% in March 2022. Our assumption is that Trustwell got a good price, one well below replacement cost.
Trustwell has been hard at work on the acquisition trail and has a solid pipeline for the rest of the year. This includes a few deals that may close soon, some letters of intent and offers outstanding. Look for some solid growth for the company by the end of the year.
