From sunrise to sunset, Sunrise Senior Living helps the elderly make the most of life. A top senior living services provider, Sunrise operates some 300 assisted living communities with some 30,000 units across the US and into Canada and the UK. Sunrise owns outright or has an interest in half of the facilities and manages the rest for third parties under long-term contracts. The company's communities offer a range of care for their residents; some provide opportunities for independent living, while others offer special care for Alzheimer's patients or skilled nursing care. Sunrise is being acquired by Health Care REIT.
The real estate investment trust (REIT) will acquire Sunrise for some $845 million in a cash-for-stock transaction. The acquisition by Health Care REIT will help Sunrise to stabilize its operations, which have been floundering financially in recent years. Health Care REIT was attracted to Sunrise's concentration of quality, private-pay communities in large, affluent markets such as Boston, Los Angeles, New York, and Philadelphia.
There's little doubt that demand for senior living services will remain a constant, and is actually expected to experience a surge in demand as Baby Boomer's reach retirement age and beyond. However, Sunrise was hit hard by the global financial recession which manifested as massive losses and a swelling pile of debt. To ensure its future viability Sunrise reversed its course of rapid development and commenced selling properties and management contracts throughout the US and exited the German market completely.
Some of the company's more notable sales included the 2010 divestiture of its interest in 58 facilities to real estate investment firm Ventas for about $41 million (plus debt assumption of about $145 million). Sunrise also sold management contracts for 27 facilities owned by HCP, which earned the company $40 million in buyout fee revenue and divested its German communities for about $60 million.
Along with the big sell off of assets (and debt), the company restructured its obligations, streamlined its operations with small workforce reductions, and management restructuring, and trimmed the company's headquarters space. All of these efforts brought some black ink back to the company's bottom line in 2010.
By 2011 the company had stabilized its size and focused on increasing occupancy at its remaining communities, as well as improving operating efficiencies company wide. To further reduce complexity (and debt), in 2012 Sunrise and an institutional investor sold 16 communities to Ventas for a total of $362 million; Sunrise received $28 million of this amount for its 20% ownership in the communities, but will remain as manager of the properties. Also in 2012, Sunrise formed a new joint venture with CNL Healthcare Trust's subsidiary CHT Partners, in which Sunrise contributed seven consolidated communities (690 units) and CHT contributed about $57 million. The joint venture is 55%-owned by CHT, while Sunrise owns the remainder and continues to manage the communities.
In order to attract residents to its communities, Sunrise concentrates on diversifying its service offerings. Care options range from assistance with general day-to-day activities to tailored care packages designed by "designated care managers." By offering residents' a wide range of options, Sunrise hopes to appeal to a broader client base.
The company was founded in 1981 by spouses Paul and Teresa Klaassen (who continue to hold a stake Sunrise). Paul Klaassen serves as chairman of the board. – less