Sonida Senior Living Deploys ‘operational Excellence’ Team To Improve Results In 2025

Sonida (NYSE: SNDA) is taking a laser focus to senior living operations by identifying and grouping communities in need of better results and providing them with more support.

The Dallas-based senior living operator is in 2025 seeking to further improve operations according to CEO Brandon Ribar. The company’s average occupancy rate in the first quarter of 2025 registered at 84.7%, representing a 100 basis point improvement compared to the first quarter of 2024.

Sonida has been in growth mode in recent quarters, and today the company’s portfolio numbers 94 primarily private-pay communities across the country. As it has taken on new communities, the company has sought to bring operations up to its standards.

That effort further intensified in the first quarter of 2025 with a new portfolio dedicated to communities that are undergoing repositioning. The portfolio currently consists of five communities in Indiana in which the company believes it can “generate ROI through a combination of capital investment and/or material changes to the communities’ business plans,” according to its latest earnings presentation.

To drive better results, Sonida has an “operations excellence team” of eight people who focus on reducing disruptions for acquired communities. So far, that effort has resulted in a net operating income (NOI) of 31.3% in the first quarter of 2025, representing a 450 basis point gain from the same period in the previous year

In an interview with Senior Housing News, Ribar highlighted the company’s efforts to reposition some of its assets away from Medicaid models and toward private-pay, including in the five communities now in the company’s repositioning portfolio.

“We’ve seen the writing on the wall, which is that the Indiana Medicaid program is going to get tighter and tighter,” Ribar told Senior Housing News. “What we’ve done and and we’ll continue to do is we’ve taken units offline and reinvested in those buildings so that the product type really matches the higher paying private pay customer.”

New technology and a stronger emphasis on employee appreciation has also helped the company notch a better improvement in turnover in 1Q25 than in any previous quarter, Ribar said.

“For our teams, it’s super important that we don’t change direction all the time. We’re really just focused on the opportunity that we have at hand,” Ribar added.

Sonida’s stock is priced at $27.13, up 9.8% from the previous close.

Achieving ‘excellence’ in operations

Sonida’s efforts hinge on its ability to deploy new strategies and support to communities on the ground level. To that end, the company is taking a similar approach as operators including Brookdale Senior Living (NYSE: BKD) by deploying dedicated teams specifically to drive better community performance.

The company’s total portfolio includes 25 communities with occupancy at or below 80%, according to financial filings. That count includes nine communities the operator brought on in 2024.

Sonida’s operations excellence team aids in ownership transitions for recently acquired and other communities in need of improvements. According to Levy, Sonida added the eight team members in early 2024. By the end of 2024, the team “really bore fruit” by streamlining ownership transitions and allowing Sonida to more quickly implement new operational changes.

The team consists of employees who have operated at either the community or regional level. When Sonida onboards a new community, the team focuses on sales and clinical operations to improve performance.

“It’s a separate group from our operational leadership intentionally,” Ribar said. “We’ve built our system to try and really help minimize that disruption and make sure they feel [they are] a really strong part of the Sonida family right out of the gate.”

Sonida’s initial repositioning efforts in 2025 revolve around five communities in Indiana, which represent a total of 474 units. The communities are located in markets “that support a sustainable and higher private pay rate.”

The company’s goal with its initial five-property repositioning portfolio is to move the communities away from Medicaid services in order to reduce exposure to government reimbursements, and toward more traditional rental private-pay models, according to Ribar. The company is seeking to convert the communities’ care levels to memory care from assisted living in order to build more complementary footprints across the U.S.

The Indiana Medicaid program was officially changed in April and could bring about an estimated $1 billion shortfall to the program, which caused “significant disruption by limiting both the timing and authorization for residents to access the benefit for assisted living and memory care services,” Ribar said.

Planned renovations in the five communities include redoing units, wings and common areas in order to better reflect residents being in a private-pay community. The company expects to generate a 30% return on investment for expenditures averaging about $4 million to $5 million. Sonida started the renovation projects earlier this year and expects to complete them over the coming quarters.

Looking ahead, Ribar believes Sonida will have more opportunities to undertake similar renovation projects as it adds new communities to its portfolio. The company also is seeking to acquire and stabilize communities into the low-90 occupancy percentile with margins nearing 30%.

As for where it might deploy its operational excellence team next, Ribar said there are “strong southern markets in Florida and Georgia” where the company has communities that would benefit from its current model for operational overhauls.

“This is representative of an ongoing opportunity to use our platform to identify strong, very-high quality assets that just need some operational capabilities and transitions, and then can stabilize with really solid operating metrics in the very near future,” Ribar said.

Staffing improvements aid efforts

Senior living operations hinge on the people who work inside communities, which is why Sonida is seeking to further improve staffing in 2025 through a variety of means.

Sonida slashed employee turnover by more than 15% overall since 1Q24, with an improvement of more than 10% for executive directors, according to the company’s earnings presentation. The company also brought down labor costs by 110 basis points in the first quarter of 2025 compared to a year prior.

What has made a difference and helped the company achieve that improvement is employee recognition and growth and training opportunities, according to Ribar. He added the company has also increased investment into employee benefits to “help on the homefront,” such as subsidizing groceries within a subset of Sonida’s communities.

“The more people feel valued, the more likely they are to stay with you,” Ribar said. “When you’re a growing company, and there’s opportunities for people to do different things, ultimately, that helps you keep really great people.”

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