Sonida Senior Living (NYSE:SNDA) reported second-quarter operating gains driven by occupancy growth, margin expansion and progress integrating the acquired CNL Healthcare Properties Inc. portfolio, while executives said the company is building a pipeline of additional acquisitions and targeting full-year normalized FFO guidance in 2027.
President and CEO Brandon Ribar said the company’s same-store weighted average occupancy increased 240 basis points year over year to 87.8% in the second quarter. Total portfolio occupancy also increased 40 basis points sequentially in July from June, he said.
Occupancy, Rates and Labor Drive Margin Gains
Chief Financial Officer Kevin Detz said the percentage of same-store communities with occupancy above 90% increased to 54% from 43% in the second quarter of 2025. Meanwhile, the share of communities below 80% occupancy fell to 20% from 30%.
Same-store revenue per occupied room, or RevPOR, increased 4.9% year over year, supported by rate strength after the company renewed 70% of resident leases during the first quarter, Detz said. Sonida cited digital marketing efforts and improved conversion from leads to tours as contributors to occupancy growth.
Labor costs declined 130 basis points as a percentage of revenue to 40.4%, a portfolio low, according to Detz. Direct labor improved by 100 basis points, while contract and other labor remained minimal and stable. Sonida recorded 63.4% incremental flow-through on same-store revenue growth, he said.
Total senior housing operating portfolio, or SHOP, NOI grew 17.5% year over year. Total SHOP occupancy rose 170 basis points to 86.6%, while total SHOP NOI margin reached 29.9%.
Ribar said Sonida sees stabilized occupancy reaching the low- to mid-90% range over time, though the pace will depend on company execution and market conditions. He said stronger pricing becomes especially important as communities exceed 90% occupancy.
CHP Integration and Operating Platform
Sonida completed its acquisition of CNL Healthcare Properties Inc., or CHP, on March 11. The company said results discussed on the call generally present the combined business on a pro forma basis for periods in which Sonida did not own CHP for the full period, while reported GAAP financials include CHP results only from the closing date.
As of July 1, Sonida had transitioned 14 communities, representing more than one-quarter of the CHP SHOP portfolio, to Sonida management. Ribar said the transitions were smooth and helped the company refine its integration process and data migration to its Sonida Performance Insight Navigator, or SPIN, platform.
Six communities transitioned at the beginning of May generated year-over-year NOI improvement exceeding 60% and expanded NOI margin by 850 basis points compared with the second quarter of 2025, Ribar said.
The company also introduced Anton Nicodemus as chief operating officer, a newly created position. Ribar said Nicodemus will focus on building a hospitality-driven culture and improving the resident and customer experience, including culinary quality, service consistency, programming, sales and revenue management.
Sonida said SPIN combines resident care, workforce and community-level data to provide real-time visibility into occupancy, rates and labor trends across more than 100 communities. Management said the platform’s data capabilities are also being used in underwriting potential acquisitions.
Acquisition Pipeline and Portfolio Recycling
Sonida is under contract to acquire about $88 million of assets that management said are located in attractive markets and offer opportunities for operational improvement. Ribar said the company expects the assets to generate a mid-teens unlevered internal rate of return and to be accretive to normalized FFO and net asset value per share on a stabilized basis.
The company said its current acquisition pipeline includes assets similar to those purchased in 2024 and 2025, ranging from opportunities requiring more substantial operational improvement to communities with occupancy in the mid- to high-80% range that offer potential for rate increases.
Sonida’s 2025 acquisition cohort had occupancy of 70.4% as of June. Since the fourth quarter of 2025, its first full quarter of ownership, occupancy increased 1,400 basis points and NOI increased 1,600 basis points, according to Ribar. NOI margin for the four-community cohort improved from negative 1% in the fourth quarter of 2025 to 15% in the second quarter.
The company also continues to pursue the disposition of 14 non-core communities, which represented less than 2% of total second-quarter NOI. Detz said the capital recycling plan is intended to redeploy funds into higher-quality communities with stronger growth and margin characteristics, while also supporting deleveraging.
Regarding its 15-community triple-net lease portfolio, Ribar said Sonida does not intend to grow that business. The company is evaluating whether it could eventually recycle those assets into SHOP investments, though he said management is not in a hurry because the properties remain strong cash-flowing assets. He said Sonida would seek a 100- to 200-basis-point spread between the triple-net asset sale economics and redeployment opportunities.
Refinancing Extends Debt Maturities
Sonida said its balance sheet is moving toward a targeted near-term leverage range of 6 times to 6.5 times. As of June 30, the company had two term loans totaling $575 million, including an additional $25 million commitment received during the quarter.
After quarter-end, Sonida completed a $380 million, five-year term loan with Ally Bank, including two extension options. Proceeds were used to settle a $170 million bridge loan, repay an existing $122 million Ally term loan and reduce borrowings under the senior revolving credit facility.
On a pro forma basis following the Ally financing, Sonida had approximately $1.6 billion in total debt with a weighted average interest rate of 5.43%. The company said 86% of its debt is fixed rate or floating-rate hedged, while 97% matures in 2029 or later.
In July, Sonida issued approximately 672,000 common shares through its at-the-market program at an average price of $41.05 per share, generating net proceeds of $27.3 million. The company said it expects to use the proceeds to fund the equity portion of near-term acquisitions.
When asked about earnings guidance, Ribar said Sonida’s goal is to begin providing full-year guidance for 2027 after it further integrates the CHP portfolio and works through acquisitions in its pipeline.
About Sonida Senior Living (NYSE:SNDA)
Sonida Senior Living (NYSE: SNDA) is a publicly traded company that owns and operates senior living communities in the United States. The company’s core business centers on providing housing and care services for older adults, with an emphasis on assisted living, memory care and related supportive services tailored to residents’ needs.
Sonida’s communities combine residential accommodations with on-site services such as personal care assistance, medication management, dining programs, social and recreational activities, and clinical oversight.
