New Perspective Senior Living is primed for future growth with a new $200 million capital infusion and plans for a future $500 million development and acquisitions pipeline.
New Perspective this week announced it had secured a $200 million bridge loan, preferred equity and common equity with partners BMO Commercial Real Estate, investment manager Fengate and development/asset management firm Boldt. That dovetails with future plans of the partners and New Perspective to pursue $500 million in future acquisitions and developments going forward, according to Co-CEO Chris Hyatt.
For Hyatt and the New Perspective team, the execution on these plans is a long time coming – the partner relationships and the company’s effort to overhaul operations all started in 2017. Even amid the Covid-19 pandemic, New Perspective stayed active in opening new ground-up developments and continued to acquire communities, albeit at a slower clip than anticipated.
Now, the company is ready to expand at a quicker pace.
“This is our year to organically grow,” Hyatt told Senior Housing News during an interview at this week’s Argentum conference in Phoenix, Arizona. “This will help fuel acquisitions and new development and we’re reinvigorated and excited about what the future holds.”
Put even more simply, Hyatt said the company’s growth, thanks to the recent investment, is akin to souping up a V6 engine to a V12 supercar. In a news release issued on Wednesday, Co-CEO Ryan Novaczyk said the investment was the “fuel we needed to light the rocket” to spur future growth.
New Perspective operates 40 communities across seven midwestern states and the company has doubled its senior living portfolio in the last five years.
Capital investment is a ‘significant’ first step
Senior living operators have taken new approaches to growth in recent years, and many have had to rely on longstanding capital relationships to fuel future expansion as new unit development remains muted and operators are more selective in acquisitions than past years.
With the new infusion of capital, Boldt – a firm New Perspective has worked on with multiple developments in its portfolio – will facilitate financing of six of the company’s 40 communities representing approximately 800 units, Hyatt said.
“This is significant to underscore that this is a first step in a broader relationship we’re putting together with these partners to pursue future opportunities,” Hyatt said. “We’re pretty excited about it.”
Hyatt added he and Novaczyk are hopeful the organization can fire its development engine back up, even if acquisitions drive growth in the near-term compared to new development.
Nine years ago, the company set a goal of serving 10,000 senior living residents by the end of 2025. While the pandemic threw a wrench into those plans, Hyatt said the organization is laying the foundation for future growth.
Just prior to the pandemic, New Perspective completed an overhaul of its operations, implementing new systems including a new human resources platform and crafted relationships with vendors to support fulfillment of various aspects of onboarding. For example, dispatching company cell phones pre-loaded with the company’s operating tools to expedite onboarding of staff. The company also expanded its corporate community support center from 8,000 square-feet to over 30,000 square-feet that opened in 2019.
“We took a jackhammer to everything and we needed those systems in place to show that we’re serious to our capital partners by investing in our own infrastructure,” Hyatt said. “We’re coming out of [the pandemic] with the wind at our backs.”
In clawing back pandemic census losses, Hyatt said the company sees a roadmap ahead to 90% occupancy by the end of this year, having fought back 12% of those occupancy losses to-date. Hyatt credited New Perspective’s success in-part to a new partnership with Curana in stemming the tide of move-outs and coordinating care across its growing portfolio.
That comes as Hyatt said the company “bucked seasonality” trends in the early part of this year and were reaping move-in growth.
“We’ve coined the term, ‘Soar in 2024’ and it’s a continuation of building on our principles of servant leadership and this year we’re ready to move forward.
REIT relationship opportunities remain ‘strong’
Some operators, including New Perspective, have chosen to work closely with real estate investment trusts (REIT) in the wake of the challenges seen in the last four years.
New Perspective is an operator of 15 communities owned by Toledo, Ohio-based REIT Welltower (NYSE: WELL) and one property with Westlake Village, California-based REIT LTC Properties (NYSE: LTC), with future opportunities ahead, Hyatt noted.
With such a large partner behind it, New Perspective is identifying ways to continue growth as a “strong regional operator.”
“We’re looking at everything with [Welltower] and they’re more open to going down a path finding different ways of operating and they’ve really stepped up in a meaningful way on capital deployment on the physical plant side,” Hyatt said.
With hundreds of potential acquisition opportunities reviewed annually, Hyatt said New Perspective will pursue just 5% of those, as operators nationwide become more skeptical of new acquisitions based on local market dynamics and deal specifics.
“We haven’t been this excited about opportunities in our space for quite some time,” Hyatt added.
