Sonida Continues Executing on its Accretive Growth and Capital Allocation Strategy with $48 Million of Investments
November 05 2024 - 8:15AM
Business Wire
Completes previously disclosed purchase of two
senior living communities in Atlanta market for $29.0 million
Brings total year-to-date acquired properties
to 19 and total operating portfolio to 93 communities
Completes previously disclosed discounted
payoff of two mortgage loans representing $28.7 million of
outstanding principal for $18.5 million, a 36% discount
Sonida Senior Living, Inc. (“Sonida” or the “Company”) (NYSE:
SNDA), a leading owner, operator and investor in senior living
communities, announced today the closing of its latest acquisition,
as the Company continues to execute on its capital allocation and
inorganic, accretive growth strategy, which aims to further expand
and upgrade its portfolio to fully leverage operating scale and
efficiencies.
“Sonida’s latest portfolio purchase brings total year-to-date
property acquisitions to 19, as the Company continues to deploy its
fully integrated operating and investment platform to strategically
and aggressively invest in high-quality, recently constructed
communities at attractive valuations, amidst a bevy of historically
favorable senior housing trends,” said Brandon Ribar, President and
Chief Executive Officer.
Capital Allocation – Acquired Two-Asset
Senior Housing Portfolio in the Southeast
On November 1, 2024, the Company finalized the previously
announced acquisition of two senior living communities located in
the Atlanta, Georgia market. The two communities, in Lawrenceville
and Peachtree Corners, are strategically located in high-growth
submarkets of Atlanta with favorable demographic growth and
supply/demand prospects.
Consistent with the Company’s focus on regional densification,
the acquisition brings Sonida’s Atlanta portfolio total to three
assets and further grows its exposure to highly attractive
Southeast markets. The two-asset portfolio has an average asset age
of five years, which will further modernize Sonida’s portfolio, and
compares favorably to an average asset age of 10+ years for
comparable inventory within a five-mile radius.
Sonida’s purchase price of $29.0 million, or approximately
$163,000 per unit, reflects a significant discount to the Company’s
estimate of replacement cost and expands Sonida’s accretive
acquisitions year-to-date, as the Company capitalizes on
historically favorable senior housing trends. The portfolio’s
in-place occupancy is approximately 86% with an average RevPOR of
more than $5,700 and is comprised of 178 units with Assisted Living
(“AL”) and Memory Care (“MC”) offerings (approximately 60% AL and
40% MC). Sonida funded the transaction with cash on its balance
sheet and proceeds from its senior secured revolving credit
facility.
Capital Allocation – Completes
Discounted Payoff of Two Loans at 36% Discount to
Par
As previously announced in August 2024, the Company entered into
loan modification agreements (“Texas Loan Modification”) with one
of its lenders on two owned communities in Texas. The original loan
terms included maturities of April 2025 and October 2031, as well
as cross-default provisions with each other. The Texas Loan
Modification revised the loan maturities to December 2025 on both
communities and provided the Company with an option to make a
discounted payoff (“Texas DPO”) of the outstanding loan principal,
which the Company executed and closed on November 1, 2024. The
Texas DPO amount of $18.5 million represents a discount of 36% on
the total principal outstanding of $28.7 million on these two loans
(as of July 31, 2024).
Safe Harbor
The forward-looking statements in this press release, including,
but not limited to, statements relating to the Company’s
acquisitions, are subject to certain risks and uncertainties that
could cause the Company’s actual results and financial condition to
differ materially, including, but not limited to the Company’s
ability to recognize the anticipated benefits of such acquisitions;
the impact of such acquisitions on the Company’s business,
including our ability to successfully implement integration
strategies or achieve expected synergies and operating
efficiencies; any legal proceedings that may be brought related to
such acquisitions; our projections related to said acquisitions may
not materialize as expected; and other risks and factors identified
from time to time in the Company’s reports filed with the SEC,
including the Company’s ability to generate sufficient cash flows
from operations, proceeds from equity issuances and debt
financings, and proceeds from the sale of assets to satisfy its
short- and long-term debt obligations and to fund the Company’s
acquisitions and capital improvement projects to expand, redevelop,
and/or reposition its senior living communities; increases in
market interest rates that increase the cost of certain of our debt
obligations; increased competition for, or a shortage of, skilled
workers, including due to general labor market conditions, along
with wage pressures resulting from such increased competition, low
unemployment levels, use of contract labor, minimum wage increases
and/or changes in overtime laws; the Company’s ability to obtain
additional capital on terms acceptable to it; the Company’s ability
to extend or refinance its existing debt as such debt matures; the
Company’s compliance with its debt agreements, including certain
financial covenants, and the risk of cross-default in the event
such non-compliance occurs; the Company’s ability to complete
acquisitions and dispositions upon favorable terms or at all,
including the possibility that the expected benefits and our
projections related to such acquisitions may not materialize as
expected; the risk of oversupply and increased competition in the
markets which the Company operates; the Company’s ability to
improve and maintain controls over financial reporting and
remediate the identified material weakness discussed in its recent
Quarterly and Annual Reports filed with the SEC; the cost and
difficulty of complying with applicable licensure, legislative
oversight, or regulatory changes; risks associated with current
global economic conditions and general economic factors such as
inflation, the consumer price index, commodity costs, fuel and
other energy costs, competition in the labor market, costs of
salaries, wages, benefits, and insurance, interest rates, and tax
rates; the impact from or the potential emergence and effects of a
future epidemic, pandemic, outbreak of infectious disease or other
health crisis; and changes in accounting principles and
interpretations.
About Sonida
Dallas-based Sonida Senior Living, Inc. is a leading owner,
operator and investor in independent living, assisted living and
memory care communities and services for senior adults. The Company
provides compassionate, resident-centric services and care as well
as engaging programming operating 93 senior housing communities in
20 states with an aggregate capacity of approximately 9,966
residents, including 80 communities which the Company owns
(including eight communities in which the Company owns varying
interests through two separate joint ventures), and 13 communities
that the Company manages on behalf of a third-party.
For more information, visit www.sonidaseniorliving.com or
connect with the Company on Facebook, X or LinkedIn.
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version on businesswire.com: https://www.businesswire.com/news/home/20241105908174/en/
Investor Relations Jason Finkelstein IGNITION IR
ir@sonidaliving.com
Sonida Senior Living (NYSE:SNDA)
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