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Insights Article | March 10, 2023

Exit & Acquisition, Reviving an Assisted Living Memory Care Facility

One owner’s exit is another owner’s opportunity

One owner’s exit is another owner’s opportunity

When a portfolio sale creates opportunity for both the seller and buyer

The Background: Reimagining What’s Next  

The pandemic forced a new normal and resulted in a collective reassessing of life’s priorities. From relocation and resignations to rebranding and retirement, everyone has personal criteria for determining what their new normal will represent.

This narrative is no different in seniors housing and senior living. Everyone from owners and operators to frontline staff was stretched thin during the pandemic. For owners and operators on the cusp of a planned retirement, it is understandable that some are ready to implement their succession plans and pursue their next chapter.

When an owner or an operator decides to turn over the reins to someone else, it creates an opportunity for both parties, as was the case with an assisted living facility in Lodi, California.

The Challenge: Ready for Retirement  

A second-generation owner-operator with more than 20 years as administrator at this facility was interested in expediting his succession plan as quickly as possible. It was clear that the pandemic had taken its toll, and he was ready for retirement. In this case, the exit strategy required finding a new owner-operator to take the reins.

While the facility wasn’t distressed, it fell into a status quo state for far too long. The facility had been simply surviving, rather than thriving. Without regular improvements and capital reinvested into the building, there was no room to adjust resident rates, so occupancy fell flat. Because of that, this storied facility became an afterthought in the marketplace, often overlooked for newer facilities and amenities nearby.

This scenario created an opportunity for Wilshire’s client, who saw the potential and recognized that the facility would benefit from the infusion of a fresh perspective and a face lift. It was an opportunity to inject new life into a facility yearning for attention, while sprucing up the appearance and deploying fresh marketing and community relations activities.

The Solution: Infusion of Ideas, Capital & People

The infusion of capital, along with fresh ideas and new people, was just what this assisted living community needed to position itself for success in the marketplace. The new management team, replete with experienced in-market team members, realized they could yield more from the existing footprint by reinvesting in the building and enhancing the memory care units. The owner-operator assembled the right team members for this acquisition, relying on experienced individuals who could ramp up marketing and referrals, while reengaging the broader community.

“The facility had deep roots in the community, but the previous owner-operator wasn’t interacting with the community or reinvesting in the building, so the new management team looked at the facility and saw opportunity. They had a fresh set of eyes, more energy, and a plan for marketing,” Wilshire’s CEO Don Pelgrim said. “After rebranding, the business development team began engaging the local police and fire departments in various events, along with other community organizations to create visibility and deepen those community relationships that are so crucial to success,” Pelgrim continued, noting it was the team’s vision and energy that sealed the deal.  

The business development team also re-established a neglected referral relationship with the neighboring skilled nursing facility, which created continuity of care benefits for current and future residents, as well as increased referrals to both facilities.

Wilshire’s fast financing within 30 days facilitated a $3.1 million bridge loan with $800,000 in reserves for capital improvements to spruce up the building. That refresh and rebrand included furniture, fixtures, equipment, flooring, painting, and reconfiguring a wall to enhance the memory care footprint.

The Impact: Sage guidance and entrepreneurial approach

First lien bridge

$3.1 million

Unit Count

73 Units

Pre-Acquisition Occupancy: 


Post-Acquisition Occupancy: 


Wilshire’s sage guidance and entrepreneurial approach enabled a new owner-operator to enhance a stagnant assisted living memory care facility and breathe new life into it to achieve optimization. Post-acquisition occupancy increased from 73% to 92%. The assisted living building was valued at $4.9 million at acquisition and after stabilization the value is estimated at approximately $12 million.

Creating Investor Opportunity

Wilshire’s experienced in-house team evaluates each loan opportunity with a disciplined and conservative underwriting approach. The WFP Income Fund’s investments in first trust deeds and mortgages secured by real estate requires borrowers to have significant equity in the property—approximately 35% of the property value—to protect investor’s principal even if market values drop. In addition, faster financing and certainty of execution allows the fund to command higher rates, which generates attractive risk-adjusted returns to its investors. 

Contact Wilshire’s  team to learn more about investment opportunities.

Don P - Profile Picture

Don Pelgrim

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