Holiday Retirement properties in real estate investment trust National Health Investors’ portfolio have seen a steady increase in occupancy over the past three months as the country’s largest independent living operator finished implementing a change in its management model, NHI Executive Vice President of Investments Kevin Pascoe said Wednesday during a second-quarter earnings call.

The operating model transition saw community oversight change from live-in managers to more traditional executive directors over the past year.

“Occupancy for July ended at over 91%, which is the highest since November 2016,” Pascoe said.

Holiday, he added, is “starting to get some traction” now that the the management changes, as well as a sales training program, are in place.

“We still are watching closely, but the leading indicators for occupancy are positive right now,” Pascoe said.

Holiday assets accounted for 15% of NHI’s cash revenue as of June 30, according to supplemental materials released in conjunction with the call.

NHI’s experience with Holiday is similar to that reported by New Senior Investment Group, which held its most recent earnings call last week. At the time, the REIT said that Holiday’s management change continued to affect second-quarter occupancy at properties in New Senior’s portfolio.

With 51 triple-net Holiday properties and 60 managed Holiday properties, Holiday accounts for 75% of the REIT’s net operating income, according to a presentation that New Senior released in conjunction with the call.

“We expected that the change would bring some volatility, and we really saw that this quarter,” CEO Susan Givens said. “The good news is that Holiday has completed the rollout of the new model, and we’ve already begun to see occupancy steadily increase over the last several months. So we’re optimistic that the new model is taking root and will ultimately contribute to better performance.”

An expanded relationship

NHI’s partnership with Olathe, KS-based Bickford Senior Living expanded during the quarter with the $10.4 million acquisition of a 16-year-old, 60-unit assisted living and memory care community in Lansing, MI, Pascoe said. The REIT committed an additional $475,000 for capital improvements to the property.

“The acquisition brings the total number of NHI facilities leased to Bickford to 43,” Pascoe said.

NHI also extended leases for five years on 13 Bickford communities and for 14 years on 19 buildings, he added.

Bickford accounted for 15% of NHI’s cash revenue as of June 30, the REIT reported.

A total of two additional Bickford properties in the NHI portfolio are expected to open in the fourth quarter of this year and the third quarter of 2018, respectively, he said.

A new partner

The REIT also recently gained a new partner, Charleston, SC-based Evolve Senior Living, when it invested in a four-year-old, 40-unit memory care community in Rye, NH.

The company announced the news Aug. 8 and discussed it during the call.

The five-year, $10 million mortgage loan on the property has renewable options at an 8% interest rate, Pascoe said. NHI has the option of buying the community after two years and once certain performance goals are met.

“It’s our expectation that we can help them into the future,” he said.