One of the strategies that senior living providers are embarking upon in today’s era of low interest rates is to grow their portfolios through acquisitions. This recently became more apparent with the announcement by Dallas-based Buckner Retirement Systems (BRS) that it will seek to acquire or enter into an affiliation with Sears Methodist Retirement Systems, Inc. Sears is a non-profit corporation also based in Texas with eleven senior housing properties. BRS’s plans include purchasing seven properties as part of the acquisition, and Sears would divest itself of the remaining four. If this acquisition goes through, it would increase BRS’s unit count to approximately 2,600, while also making it the largest non-profit senior housing provider in Texas, and one of the 20 largest in the country.
Buckner Retirement Systems Takes Advantage of Sears’ Financial Situation
One of the reasons Sears is open to the acquisition by Buckner is because of its poor financial situation, which culminated with it filing for Chapter 11 bankruptcy earlier this year. The first Sears retirement community was established for Methodist church leaders and their spouses in Abilene, Texas in the 1960s. Over the years, Sears grew to become one of the largest senior housing providers in Texas. After decades of expansion, Sears would eventually house over 1,500 residents at eleven different communities in eight different Texas cities. However, the company could not maintain its success, and the company began to fall on hard times in recent years. After failing to restructure its debt load with various creditors, Sears filed for bankruptcy in June. They revealed that it held assets of only $10 million to $50 million, an amount which dwarfed by massive liabilities that ranged from $100 million to $500 million.
Sensing a unique opportunity to expand its portfolio by purchasing an established brand, Buckner quickly targeted Sears as a potential acquisition once its bankruptcy became public. Buckner currently operates senior housing communities in a number of different cities in Texas, including Austin, Dallas, Longview, San Angelo, Beaumont, and Burnet. It is also developing a community in North Dallas that is scheduled to open in 2018. Buckner is extremely excited about the prospect of acquiring Sears, as evidenced by statements from its management team. The president and CEO of Buckner’s parent company, Buckner International, stated that purchasing Sears will allow Buckner “to build on our vision and mission of serving more senior adults,” and that Buckner “[looks] forward to entering into negotiations regarding the final terms of a possible transaction, subject to required approvals by our BRS board of trustees and the court system.”
Buckner Retirement Systems is just one of many senior housing providers pursuing a strategy of growth through acquisitions. Other providers interested in doing so and seeking capital to further their endeavors should contact the Chicago-based financing firmCambridge Realty Capital to learn more about the many different financingoptions it offers for senior housing acquisitions and for other purposes as well.
