Two former leaders of Five Star Senior Living (Nasdaq: FVE) are officially back in the operations game.
Sona Senior Living, the operating company that Bruce Mackey and Scott Herzig launched last year, now has two management contracts under its belt in New Hampshire and Massachusetts, stepping into those buildings in the midst of Covid-19.
The company also is involved in a development project in Connecticut, with land already locked down. And Sona is potentially close to inking a joint-venture deal on another community, although those plans are still under negotiation.
Despite lining up a handful of projects right out of the gate, Mackey doesn’t aspire to run another company nearly as big as Five Star.
“With Five Star, people always ask me what I wish I could have done differently,” said Mackey, who is a managing partner at Sona along with Herzig. “And I always say that I wish I could have gotten out to communities a lot more.”
Sona will focus on staying nimble, with a goal to amass a portfolio of about 10 to 20 communities over the next few years. While the company is content building a base of operations in the Northeast, it also sees opportunities to branch out to other major metro areas, such as those on the West Coast or anywhere else that is a direct flight from Boston.
Among the company’s current ownership partners is Lake Forest, California-based Summit Healthcare REIT. Sona has also supplemented its offerings by partnering with senior living companies such as Sandi Flores Consulting Group, which is advising the company on the clinical side; and Oasis, which is helping the company with human resources.
On the sales and marketing side, Sona is also working with Five Star’s former vice president of sales and marketing, Rob Poyas.
While Covid-19 tossed a wrench in the duo’s plans earlier this year, it didn’t halt them outright. The company took over operations of its first community, the Riverglen House in Littleton, New Hampshire, on March 1 just as the pandemic started ramping up. Months later in July, Sona started managing its second community — this time, it was Seasons of Danvers, a memory care/assisted living community in Danvers, Massachusetts.
“It’s been interesting working through the pitfalls with Covid-19 and taking over, but we’ve done a pretty good job so far with it,” Mackey said. “Knock on wood, both communities have gone well, they’ve been stable, and they’ve been relatively Covid-free.”
Photo via Seasons of DanversPhoto via Seasons of Danvers
Photo via Riverglen HousePhoto via Riverglen House
Mackey (left) and Herzig (right), via SonaMackey (left) and Herzig (right), via Sona
Lately, Mackey and Herzig have devoted much of their time and attention to Heritage River Village, a 60-acre mixed-use development project in Griswold, Connecticut with planned medical, retail, restaurant and senior housing components.
While that project is still coming together, initial details call for an intergenerational senior living component with more than 200 units and a total project cost north of $50 million. Resident rates would lie around 25% to 30% below market rate.
“To Scott and I, it definitely seems like a home-run for senior living,” Mackey said. “It’s definitely more of a destination-driven area than a traditional senior living site.”
Sona’s launch has not been without its fair share of challenges. Like nearly every other operator in the space, Sona saw its expenses grow and its revenues shrink when shelter-in-place orders came down in March. And Covid-19 has put a damper on hiring new associates.
Still, the company is on firm footing now, and both Mackey and Herzig are optimistic about what lies ahead.
“If you look at where we were a year ago, and where we are now, it shows that we’re proven operators,” Herzig said. “So, we’re in growth mode and looking for partners.”
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