Senior Housing Conglomerate

The senior housing industry has been under great scrutiny for the past few years. With new facilities opening each day and more construction underway, it seems everyone wants to play in the Senior Housing space.

As the titan of the senior housing industry, Brookdale is the largest senior healthcare provider in the country. With over 1,100 communities under their banner, they serve seniors with memory care, independent living and assisted living facilities. Unfortunately, with such size comes a greater challenge. Currently, Brookdale is under the microscope, and as the largest player in the senior housing industry, what happens to them may affect us all.

Trouble at Brookdale

It is common for senior housing operators to buy or sell facilities, merge and develop new product. For Brookdale, they have been able to successfully and repeatedly do so, becoming the behemoth they are now. However, it appears that the seams are beginning to come apart. With 1,100 communities, hundreds of operators, thousands of staff members and even more residents, Brookdale’s responsibilities continue to multiply as they grow.

With each new addition of senior housing investments, Brookdale also acquires different operating styles, management styles, regional market variations and resident expectations. As a result, schools of thoughts clash.

Differences in corporate culture affect management and, by consequence, resident service. In addition, these accumulated senior housing investments come from different sectors and markets. As a result, operational approaches that work for one facility may not work for another. This means that Brookdale’s top management cannot impose the same method of operation for all their communities. Brookdale’s executive suite struggles to find a unifying method to leading 1,100 communities.

Brookdale Looks for Outside Help

At present, Brookdale is searching for outside help. Upper management is searching for the right candidates for new ownership/investment to maximize shareholder returns.

Senior housing industry veterans Ventas and Blackstone were the two companies with the horsepower and equity to strike a deal with Brookdale. Unfortunately, neither worked out. Now, Brookdale is looking toward an international bid.

The Beijing-based investing conglomerate, Zhonghong Zhuoye Group, is seeking ownership of Brookdale.

There are plenty of critics of this solution. With the current domestic issues plaguing Brookdale, inviting a foreign influence seems far from the right answer. Many oppose this option and fear what would happen if an international organization held control over the largest senior healthcare provider in the United States. Consequently, senior housing industry operators and those preparing for their next senior housing investments wait for its conclusion.

Navigate the Senior Housing Industry with the JCH Group

The growing layers of complexities continue to complicate the Brookdale situation. As the largest senior health care provider, what happens with Brookdale inevitably affects the rest of the senior housing industry.

The JCH Group plans to keep the senior housing community informed as things develop with the potential Brookdale transaction, reporting on how it may bring changes to our senior housing industry and what steps to take next to keep your senior housing investment stable.

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