With CHP merger complete, Sonida looks to reduce combined portfolio by 10 percent

With its $1.8 billion merger with non-traded real estate investment trust CNL Healthcare Properties now complete, Sonida Senior Living plans to sell 10% of the 153 communities in the newly combined portfolio, Sonida President and CEO Brandon Ribar said Wednesday during the Dallas-based company’s fourth-quarter and full-year 2025 earnings call. Ribar estimated that “a handful” of the communities, which he described as “noncore,” should be on the market in six to 12 months. “Dollars from those transactions would first go to de-lever the company and then would be available for recycling into assets that we feel like reflect what the go-forward portfolio represents, which are high-quality, newer-vintage assets in strong growth markets that have a really good growth trajectory,” he said. Executive Vice President and Chief Financial Officer Kevin Detz noted that the sales should result in a younger average community age in the portfolio. “Note that these communities represent significantly less than the 10% of [net operating income], as they are less profitable than the company’s core assets,” he said, later predicting that Sonida’s pricing power “will also benefit from the pruning of a handful of under-earning communities and increasing overall demand as occupancy levels continue to rise.” Sonida announced the finalization of its merger with CHP on Wednesday before the earnings call. The deal more than doubled the number of units under Sonida’s control, producing what would be the eighth largest senior living owner in the United States based on total number of units and seventh largest based on total number of communities, using figures from the 2025 ASHA 50 list of largest owners, which includes data current as of June 1. Sonida already was a large company, appearing in the No. 23 spot on the ASHA 50 list of largest owners. Based on total number of units as of the compilation of the 2025 ASHA 50, Sonida now ranks after Welltower, Ventas, Brookdale Senior Living, Harrison Street, Diversified Healthcare Trust, American Healthcare REIT and StoryPoint Group as an owner. Although dispositions are in the near future, Ribar said that Sonida will continue to pursue acquisitions in its primary geographies, “along with strategic expansion into additional markets” that “will create further benefit operationally, including the additional product offerings and pricing options, efficiencies in sales and marketing costs and labor efficiencies.” ‘Responsible’ integration planned When it comes to integrating the CHP portfolio into Sonida, the CEO said that it will be done “on a responsible and productive timeline” and that “further strategic relationships with select new managers offer additional growth opportunities.” Sonida’s first priority, he said, is “minimizing operational disruption for residents and community team members.” The former CHP portfolio has 16 operators, and Sonida has spent “considerable time” with them since the planned merger was announced in November, he said. “Two key components to the effort are creating additional incentives for strong ongoing performance at the operator level and maintaining continuity within the CHP asset management function in the pro forma Sonida platform,” Ribar said. RevPOR growth a target In addition to pruning the portfolio, the CEO said that this year, Sonida will target “growth in our revenue per occupied room at or above our same-store growth achieved in 2025.” In the same-store portfolio, RevPOR increased 4.6%, to $4,363, in the fourth quarter of 2025 versus the same quarter of 2024, the company reported. Year over year, RevPOR increased 4.8% to $4,330. Sonida reported that resident revenue for the fourth quarter was $86.3 million compared with $77.1 million for the same quarter in 2024, an increase of $9.2 million, or 11.9%. Resident revenue for the whole year was $332 million compared with $267.8 million for 2024, an increase of $64.2 million, or 24%. For both the fourth-quarter and whole-year revenue increase, Sonida said it was “primarily due to increased occupancy, increased average rent rates, and an additional 16 communities acquired during 2024 and 3 communities acquired during 2025.” Weighted average occupancy for the company’s owned same-store portfolio increased 90 basis points to 87.9% in the fourth quarter, from 87% in the fourth quarter of 2024. “The average average annual rent renewal rate on in-place leases for the recent March 1 renewal was 7.9%, which was applicable to 96% of the total same-store residents,” Detz said. “For context, the same percentage 1 year ago on a similar resident lease count was 6.8%. Additionally, the level of care revenues for 2025 increased 11.4% compared to prior year.” Other goals: Care delivery, labor Other goals for 2026, Ribar said, include an operating team focus on “the consistent delivery of excellent clinical care and services to support the health and well-being of our residents and the continued development of a labor model that rewards our strongest employees and furthers our retention efforts.” Sonida has reduced turnover by more than 30 percentage points in recent years, he said, crediting investments in wages, benefits and a positive, supportive culture. “However, we still have room for improvement,” the CEO added. “Operational performance based on retention and development of strong local and regional leadership, combined with advanced technology platforms to improve resident outcomes and operating efficiency, remain the linchpin to our success,” Ribar said.