Senior Living Operators Cogir, Cadence Merge

Cogir, the US subsidiary of Montreal-based real estate firm Cogir Services, is buying out Cadence Living’s shareholders, the companies have announced.

The combination of the two senior living operators will now encompass 60 communities including 8,000 units in nine states. The merged companies also will have about a dozen new developments in their merged pipeline.

Terms of the acquisition were not disclosed. Cogir CEO David Eskenazy will be CEO of the merged entity, with Cadence co-founders Rob Leinbach and Eric Gruber moving to senior VP roles.

Eskenazy, in a statement, said the operations of both companies have been merged, making the transaction more of a merger than an acquisition.

Communities in the merged portfolio will continue to operate under the same brand names as before the transaction. Cogir will keep its Sacramento-rea headquarters and additional offices in Scottsdale and Seattle.

Both Cogir and Cadence have portfolios that are a mixture of join-owned and third party-managed communities, and both offer independent living, assisted living and memory care services.

The merger is seen as a good fit geographically, since the footprints of the two companies currently complement each other more than they overlap. Cadence has a strong presence in Southern California, while Cogir has a cluster of communities in Northern California and in Washington State.

Cadence has a robust position in memory care, which has been targeted as a growth strategy by Cogir.

The merged companies are expected to continue to expand their expertise in the programming and analytical side of operating senior living facilities by investing in systems, margin performance and data analytics.

Senior living operators are focusing on staffing efficiencies as they cope with shrinking margins due to increased costs, especially labor costs.

Inflation and a shortage of skilled labor, especially nurses—a shortage which predated the pandemic but has grown much worse during it as nurses became part of the Great Resignation—have caused a surge in operating costs that is squeezing NOI margins at senior living facilities despite steadily rising occupancy levels.

Managing costs has become priority number one for senior living operators. For those relying on agencies to fill staffing shortages, that’s a tough row to hoe.

“Operators’ bottom lines are being squeezed tremendously due to higher agency costs,” Edward Pan, a Colliers first vice president who specializes in senior housing, told GlobeSt.

“Operators are relying heavily on agencies to fill staffing shortages, adding as much as 20% to the cost of labor compared to [an in-house paid staff],” he said.