On the heels of its second quarter earnings announcement, Sonida Senior Living revealed it’s making a new nine-figure acquisition in the Southeast. The deal involves eight assisted living/memory care communities owned by Batson-Cook Construction (a development/construction company based in Georgia) and Principal Senior Living Group, and operated under Principal’s Benton House brand. They total 555 units, split between 383 assisted living and 172 memory care units, and averaged five years old, as opposed to the 19-years-old average for properties in the surrounding 10 miles of each asset. Five of the assets are located in Florida (Jacksonville, Orlando and Daytona Beach MSAs), while three are in South Carolina (Hilton Head, Charleston and Florence MSAs). They will add to Sonida’s existing footprint in those regions and further upgrade and modernize its portfolio.
Operations were solid, as well, with the portfolio’s in-place occupancy around 83% and an average RevPOR of more than $6,000. Sonida anticipates that multi-year stabilization of NOI margin should result in an accretive effective cap rate on the deal. The company paid $103 million, or $185,000 per unit. Upon the closing of this acquisition, which is targeted for late September, Sonida’s total operating portfolio would grow to 91 communities. The South Carolina communities are located in Florence, Bluffton and West Ashley, while the Florida properties are in Narcoossee, St. Johns, Port Orange, Oviedo and Oakleaf.
The deal follows Sonida’s other recent portfolio acquisitions, including four communities in Texas and Georgia (made with minority joint venture partner Palatine Capital Partners Management for $34.7 million) and four other communities in Ohio, Kentucky and Missouri (made with majority JV partner KZ Family Ventures for $64 million). Its 2024 deals, which includes the acquisition of American House Macedonia in May for $10.7 million, total more than $200 million.
In addition, Sonida announced that it has commenced an underwritten public offering of four million shares of its common stock. The company expects to grant the underwriters a 30-day option to purchase 600,000 additional shares of its common stock.
Sonida intends to use $102.9 million of the net proceeds, including any net proceeds from the underwriter’s exercise of their option to purchase additional shares, from the offering to fund the purchase price for the aforementioned acquisition of eight seniors housing communities and for other general corporate purposes. Morgan Stanley, RBC Capital Markets, LLC and BMO Capital Markets are acting as joint lead book-running managers of the offering.
