As expected, New Senior Investment Group has announced its plan to internalize management beginning in January. The move follows income and occupancy challenges at the publicly traded real estate investment trust.

Currently, the company is externally managed by FIG LLC, an affiliate of Fortress Investment Group LLC. As part of the termination and cooperation agreement, New Senior will make a one-time cash payment of $10 million to the manager and issue 400,000 shares of newly created series A cumulative perpetual preferred stock, which will have a liquidation preference amount of $100 per share and pay a cumulative quarterly cash dividend at a rate of 6% a year.

The REIT announced that the internalization effort will deliver cost savings, simplify the firm’s organizational structure and might expand its ownership base.

New Senior first announced its intentions to bring management in-house in August. The move is the result of a strategic review announced in February.

During a recent earnings call, CEO Susan Givens said the company would take a “hard look” at its assisted living / memory care communities, which were “weighing down” growth in overall portfolio net operating income and occupancy.

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