SavaSeniorCare is set to transition the remaining five skilled nursing facilities in its portfolio to other operators by the end of January, in what seems to be a trend in long-term care that also involves Welltower and CareTrust REIT.
“The nursing home industry has experienced significant challenges over the past few years due, in large part, to COVID-19. As a result, SavaSeniorCare and its affiliated operating companies have made the decision to transition the portfolio of nursing centers to regional operators,” a spokesperson for the company told the McKnight’s Business Daily.
The decision dates back to November 2020, when SavaSeniorCare announced plans to transfer operations of 48 SNFs and assisted living properties across eight states by the end of 2021. At the time, SavaSeniorCare operated 169 facilities.
Through the offloading, the company said at the time, the company could create a more “nimble, regional organization committed to quality care” by shrinking its geographic footprint and developing two divisions that will allow it to cluster facilities around geographic centers.
Last year, SavaSeniorCare settled what it called “unfounded” and longstanding allegations filed against the nursing home chain of billing Medicare for allegedly unnecessary therapy services. The company agreed to an $11.2 million agreement after spending 10 years and “several million dollars” on defense costs.
Welltower
Dec. 22, Toledo, OH-based real estate investment trust Welltower said that ProMedica had surrendered to Welltower its 15% interest in a 147-property skilled nursing portfolio. On that date, Integra Health entered into a master lease for the entire portfolio and will bear financial responsibility for all assets, including assets where it has not yet acquired an ownership stake, according to Welltower.
The move came after the REIT announced in November that it would move the facilities into a joint venture between Welltower and Integra Health.
ProMedica Senior Care would continue to operate 58 private-pay senior living communities under a lease, Welltower said in November. Additionally, ProMedica will operate 10 skilled nursing facilities that are not part of the Welltower transaction, a company spokeswoman previously told McKnight’s.
In November, Welltower said that New York-based Integra would lease the properties — at a higher rate than ProMedica was paying — but bring in regional operators for on-site management. Integra’s business plan entails entering into sub-leases with approximately 15 regional operators with strong performance track records in their respective markets.
What’s unclear at this point is how much experience Integra has in the skilled nursing sector, and the transaction has not been without controversy. Hindenburg Research released a report in December calling the joint venture partnership a “sham” and a “shell game.”
“Despite the high praise from Welltower’s management and claims of being well-experienced in skilled nursing, Integra seems to barely exist,” the report stated. “Far from having a long operating history, Integra’s entity was registered six months ago, according to Delaware corporate records.”
CareTrust REIT
CareTrust REIT first announced in February its plans to sell or repurpose 32 skilled nursing or senior living facilities in a push to decrease risk in its portfolio, due to the lingering effects of COVID-19. In May, the company announced that it had reached tentative agreements regarding almost all of the 32 properties.
Most recently, the San Clemente, CA-based real estate investment trust completed in the third quarter the sale of seven skilled nursing facilities in Ohio for $52 million. Among the facilities was one multiservice campus with 600 skilled nursing beds and 100 senior housing units.
