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Eclipse Senior Living to Shut Down Corporate Operation By End of Q1 2022

Eclipse Senior Living, one the largest providers in the United States, plans to permanently shut down.

The Lake Oswego, Oregon-based operator has notified the state of Oregon about plans to shutter the company, in accordance with the Worker Adjustment and Retraining Notification Act (WARN). Senior Housing News obtained the company’s letter to the state Monday.

“This letter is to inform you that Eclipse Senior Living, Inc. will permanently be shutting down its operation, targeting closure by the end of the first quarter of 2022,” reads the company’s Oct. 1 letter to Oregon’s Higher Education Coordinating Commission/OWI.

The letter details 171 corporate employees slated to be affected by the closure, which is targeted to occur “by the end of the first quarter of 2022.”

The letter did not say what might happen to the  more than 100 senior living communities operated by Eclipse throughout the U.S., or the roughly 5,500 people who work in them. Many of those communities are owned by real estate investment trust Ventas (NYSE: VTR), which also owns a 34% ownership stake in Eclipse.

Representatives from Eclipse and Ventas on Monday night did not immediately comment to Senior Housing News.

Eclipse was founded in 2017. The company’s first management deal was to operate a 76-community portfolio of Elmcroft communities owned by Ventas. The operator typically took on turnarounds, with a strategy of building out technology infrastructure and leveraging efficiencies of scale.

But the future of the Eclipse portfolio has been an open question, as Ventas explored a joint venture in 2017 but did not close a deal at that time. In February 2020, leaders with the Chicago-based REIT again said that they intended to form a JV.

“We have also taken initial steps to form an institutional joint venture for the ESL portfolio, as ESL continues to find its footing following the transition of assets to it, the recent rollout of its simplified pricing model and an increased allocation of capital to the communities,” Ventas CEO Debra Cafaro said during the company’s Q4 2019 earnings call.

The closure of the Eclipse corporate office might indicate that the portfolio is changing hands and new ownership will bring in a new operator or operators, or that Ventas will maintain ownership of the properties but bring in new management, an analyst who covers the REIT told SHN on background.

The news of Eclipse’s closure comes during a challenging time for the senior living industry. Operators have been walloped by a one-two punch of rising expenses and lower-than-normal occupancy rates, squeezing margins.

Last year, Eclipse CEO Kai Hsiao led the company in a “recalibration” that took the company from “sprint” to “marathon” footing as it related to the Covid-19 pandemic.

In April 2021, Hsiao told SHN he was hopeful that a recovery was at hand as Covid case counts dwindled. But like others in the industry, Eclipse faced certain challenges in the pandemic age, such as a tough labor environment and occupancy pressures.

Eclipse was also among the first in the U.S. to mandate getting a Covid-19 vaccine as a condition of employment for workers, and the company has been focused on cracking the middle-market assisted living code with its Elmcroft brand.

Hsiao and other company leaders also emphasized having a diverse team, and in 2020 launched an initiative dubbed IDEA, around inclusion, diversity, equity and acceptance.

The post Eclipse Senior Living to Shut Down Corporate Operation By End of Q1 2022 appeared first on Senior Housing News.

Source: For the full article please visit Senior Housing News

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