DALLAS - Sonida Senior Living, Inc. (NYSE: SNDA), a prominent operator and investor in senior living communities, announced the acquisition of a senior living community in Macedonia, Ohio, marking the latest expansion of its U.S. portfolio, now totaling 72 properties. The company also provided updates on its joint venture partnerships and capital market activities for the second quarter of 2024.
On Thursday, Sonida completed the purchase of a 100-unit Assisted Living and Memory Care facility for $10.7 million, a 43% discount to the senior mortgage loan. This acquisition, financed by the existing lender, is expected to enhance Sonida's operational scale and efficiency in Ohio, where the company now owns 11 properties. The community, constructed in 2015, has seen challenges due to operator changes and the pandemic, but Sonida aims to stabilize the asset to a low double-digit cap rate.
Further growth is anticipated with the pending acquisition of eight additional communities through two joint ventures. These strategically located communities will add over 750 units to Sonida's portfolio, offering Independent Living, Assisted Living, and Memory Care services. The company seeks to leverage these acquisitions to generate significant management fee revenue and Net Operating Income, with purchase prices averaging below $120k per unit and at or below 50% of replacement cost. The transactions are expected to close in the second quarter of 2024, subject to due diligence and definitive agreements.
Sonida also plans to transition three new communities to its management on June 1, 2024, expanding its management contracts and bolstering asset-light earnings growth.
The company's recent capital raises, including a $47.75 million equity private placement in February and a $10.3 million At-the-Market (ATM) equity offering in April, support these strategic acquisitions. The ATM program, facilitated by Mizuho Securities USA LLC, has already generated approximately $10.3 million in net proceeds, which Sonida anticipates using for future acquisitions, capital expenditures, and general corporate purposes.
These forward-looking statements are subject to risks and uncertainties, and there is no guarantee that the planned acquisitions will be completed as scheduled or at all. The information is based on a press release statement.
InvestingPro Insights
As Sonida Senior Living, Inc. (SNDA) continues to expand its portfolio with strategic acquisitions, the financial health and market performance of the company remain critical for investors. Here are some insights based on real-time data and InvestingPro Tips:
InvestingPro Data indicates a Market Cap of $430.34 million, reflecting the company's current valuation in the market. Despite not being profitable over the last twelve months, Sonida has shown a Revenue Growth of 10.97% over the same period, suggesting an expanding operational scale which could be further enhanced by the recent acquisitions. Additionally, the company has experienced a significant Price Total Return of 381.91% over the past year, highlighting strong market confidence and growth potential.
InvestingPro Tips reveal that Sonida operates with a significant debt burden and that its stock price movements are quite volatile, which investors should consider in the context of the company's aggressive expansion strategy. The company's high shareholder yield is another point of interest, indicating a potential return to investors through capital gains or other distributions. Notably, Sonida does not pay a dividend to shareholders, which might influence investment decisions for income-focused investors.
For those interested in a deeper dive into Sonida Senior Living's financials and market performance, InvestingPro offers additional tips that can provide further insights. With a total of 12 InvestingPro Tips available, including information on short term obligations and EBITDA valuation, investors can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription and gain comprehensive guidance on SNDA's investment profile.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.