With a management agreement in place with Northstar Senior Living for seven additional properties, Diversified Healthcare Trust has now completed 62 of 108 planned transitions from Five Star Senior Living to other third-party operators.
Northstar Senior Living will take over management of five memory care communities and one assisted living community in California, as well as one assisted living community in Arizona, totaling 422 units within Diversified senior housing operating portfolio, the Newton, MA-based real estate investment trust announced Monday.
With this transaction, Diversified now has entered into new management agreements representing approximately 84% of the communities in its senior housing operating portfolio to be transitioned from Newton, MA-based Five Star. The REIT said it expects to transition the remainder of the Five Star properties by the end of the year.
Five Star will continue to manage 120 communities for Diversified, excluding the skilled nursing units at such properties. August month end occupancy for those remaining communities was 74.7%, an increase of approximately 100 basis points (1%) compared with July month-end occupancy. August average occupancy in this portfolio was 73.4%, an increase of 50 basis points (0.5%) compared with July average occupancy.
“We have made progress on our three-pronged strategy to ‘Reposition, Evolve and Diversify’ by transitioning these 62 communities and repositioning our senior living management services to focus on larger, higher-performing independent living, assisted living and memory care communities,” Five Star President and CEO Katie Potter sad in a business update on Monday. “Going forward, we will build on our strengths operating larger senior living communities and stand-alone active adult and independent living communities while continuing to evolve our choice-based, financially flexible rehabilitation and wellness services offerings to meet the changing needs and preferences of older adults.”
