Adava Care Enters Senior Living Industry With 12-Community Deal, More Growth Planned

Adava Care Enters Senior Living Industry With 12-Community Deal, More Growth Planned

Adava Care is a new face in the senior living sector thanks to a recent 12-community acquisition, and the company has plans to become even more established in the space.

Adava on May 1 acquired a 12-community portfolio in Wisconsin from a public real estate investment trust (REIT). The seller and terms of the deal were not disclosed.

The portfolio addition – 279 units of assisted living and memory care in all – adds to the company’s footprint that, prior to the deal, numbered two behavioral health centers in Milwaukee. Though not a large number of units to take on at once, owner Kurosh Dejgosha said the expansion into senior living is just the start of the company’s plans.

Dejgosha said the portfolio was attractive from a regional footprint standpoint, given that most of the communities are within the Milwaukee and the Green Bay metropolitan areas. Additionally, senior living is a similar business model to behavioral health.

Moving forward, the idea will be to offer senior housing on the lower end of the resident rate spectrum, utilizing Wisconsin’s Family Care Medicaid program for residents in combination with private-pay rates.

“I think that if you pay attention, if you care about business, that you can have good margins and still provide a high quality of care, and you don’t have to sacrifice the resident experience,” Dejgosha said.

Growing a new platform

The 12-community platform that Adava Care acquired was “underperforming” during the selling process, according to a notice from broker Blueprint on the sale. But the portfolio was also “historically well-occupied and cash-flowing.”

Two of the 12 communities included in the portfolio are currently vacant, but the remaining ones are sitting between a 70% and 75% occupancy rate at the moment.

Dejgosha and the company’s team are immediately focused on stabilizing the communities. The company is currently onboarding around 150 new employees and hiring additional administrative staff is among its top priorities.

“These properties haven’t gotten the level of attention they’ve needed for a while, so that all needs to be done,” he said.

It will take at least six to nine months in order to get everything under control with the communities, Dejgosha said, but noted he is optimistic that it can be done in that time frame. Once that is complete, the plan will be to start looking at expanding further into the industry.

Dejgosha said the company may in the future target continuing care retirement communities and other properties with access to the full continuum of care. He also would like to eventually expand the company’s senior housing holdings outside of Wisconsin, once the company’s newest acquisition can be managed without as much oversight as currently. In the meantime, Dejgosha said the plan is to stay nearby, as the majority of the communities in the acquired portfolio are within 20 minutes of each other.

“The nice part about becoming a mid-size company is I can really invest in my team and have them grow,” he said. “So if I do expand into other states and areas, I have that management team that can go and assist and help them run these operations.”

While it may not be in the cards for the time being, future growth for Adava Care will likely be in the form of acquisitions due to the high cost of new development. Acquisitions also can occur more quickly than the typical two-to-three year development cycle for building from the ground up.

Dejgosha got into the senior housing space as a serial entrepreneur looking for a new challenge. He first bought three 20-unit residential behavioral health facilities in Milwaukee in 2019 and has expanded in residential and care services since.

“It was kind of trial by fire,” he said. “The sellers were very nice people, they were quite helpful.”

While there were struggles, such as having to move 20 people into hotels for months on end and even building fires, Dejgosha said he was at the point where he was ready to expand, prompting his move into senior living.

With his newest venture, Dejgosha said he wants to show that it’s possible to provide good services without being stingy and that a midsize senior living provider can be profitable even with utilizing Medicaid funding.

“It’s tough, but I believe … that you can provide good services, even on Medicaid, and still make a profit,” he said.

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