DALLAS - Sonida Senior Living, Inc. (NYSE: SNDA), a company specializing in senior living communities, announced plans to acquire eight senior living communities in the Southeast United States, including locations in Florida and South Carolina. The transaction, valued at $103 million, will add 555 units to Sonida's portfolio, with the communities featuring Assisted Living and Memory Care services.
The strategic acquisition aims to enhance Sonida's presence in the Southeast, focusing on high-growth metropolitan areas such as Jacksonville, Orlando, Daytona Beach, Hilton Head, Charleston, and Florence. The communities average five years in age, which is significantly newer compared to the 19-year average of similar properties within their locales.
According to Brandon Ribar, President and CEO of Sonida, the move is part of the company's growth strategy to invest in quality real estate and capitalize on demographic trends and limited competition in the region. Ribar emphasized the expected benefits of integrating Sonida's operational platform to drive occupancy and revenue growth while managing expenses.
The in-place occupancy rate for the portfolio stands at approximately 83%, with an average Revenue per Occupied Room (RevPOR) exceeding $6,000. Sonida anticipates that the effective capitalization rate will be accretive once the net operating income margin stabilizes over the coming years.
Upon completing this acquisition, expected in late Q3 or early Q4, Sonida's operating portfolio will expand from 83 to 91 communities. This increase includes a new management contract closed earlier in August.
Sonida Senior Living's announcement includes forward-looking statements, which are subject to risks and uncertainties that could cause actual results to differ materially. These include the company's ability to realize the anticipated benefits of the acquisitions and the impact of such acquisitions on the company's operations.
The information provided in this article is based on a press release statement from Sonida Senior Living, Inc.
In other recent news, Sonida Senior Living disclosed strong financial results for the second quarter of 2024, featuring record-high occupancy rates and substantial improvements in operating margins. The company's operating results showcased a robust performance with an average occupancy rate of 86.2% in its same-store owned portfolio and operating margins surpassing 28% for the quarter. Sonida Senior Living also reported a year-over-year rate growth of 8.4% for the quarter and acquired nine communities through strategic joint ventures, backed by a $50 million investment.
In further developments, the company is focusing on growth initiatives and plans to acquire more assets in the second half of the year. Sonida Senior Living has also committed to further deleverage the portfolio and aims to improve organic portfolio performance, stabilize recently acquired communities, and identify attractive acquisitions.
In terms of resident metrics, the company noted a decrease in move-outs by 19% from the previous quarter and the comparable quarter in 2023. Sonida Senior Living also reported a quarter-over-quarter RevPOR increase of 3%, year-over-year increases of 8.3% for RevPOR, and 11.3% for RevPAR. These recent developments underline a period of growth and operational efficiency for Sonida Senior Living.
InvestingPro Insights
As Sonida Senior Living, Inc. (NYSE: SNDA) embarks on its strategic expansion with the acquisition of eight senior living communities in the Southeast United States, investors are closely monitoring the company's financial health and market performance. With a market capitalization of $410.14 million, Sonida operates with a significant debt burden and its stock price movements have been quite volatile, as observed in the recent price total return metrics. Over the last six months, the stock price has seen a large uptick, delivering a return of 153.47%, and even more impressively, a year-to-date price total return of 214.08%.
Despite these robust returns, InvestingPro data highlights that Sonida's short-term obligations exceed its liquid assets, indicating potential liquidity challenges. Additionally, the company is not profitable over the last twelve months, with a negative P/E ratio of -12.88, which has adjusted to -7.47 in the last twelve months as of Q2 2024. This is further evidenced by the company's operating income margin of -4.62% over the same period. However, the EBITDA growth is notably high at 50.45%, suggesting some underlying operational efficiency gains.
InvestingPro Tips also reveal that Sonida is trading at a high EBITDA valuation multiple and near its 52-week high, with the price at 92.85% of this peak. This could signal confidence from investors or potentially indicate a cautious watch for those seeking value opportunities. It's important to note that Sonida does not pay a dividend to shareholders, which could influence investment decisions for income-focused portfolios.
For investors seeking a deeper dive into Sonida Senior Living's financials and market performance, additional InvestingPro Tips are available on the platform, providing a comprehensive analysis of the company's prospects and challenges. There are currently 6 additional tips listed on InvestingPro for Sonida, which can be found at: https://www.investing.com/pro/SNDA.
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