Inside the ‘New Era of Collaboration’ Between REITs, Senior Living Operators

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Multiple brands, dense portfolios centered on specific regions, new incentives to achieve alignment in operations – this is the future of senior living owner-operator relations.

Recently, Diversified Healthcare Trust (Nasdaq: DHC) took this strategy when it transitioned 116 communities to six senior living operating companies.

The Newton, Mass-based real estate investment trust (REIT) is seeking to partner with operators who are “market sharpshooters” that deeply understand the markets in which they do business.

In 2021, DHC began clustering its operations after transitioning 108 communities formerly operated by AlerisLife under the Five Star Senior Living brand to other operators.

That move helped the REIT’s leaders “better understand what densification means and does” and has helped inform the company’s strategy ever since.

“The byproduct of that just fits well with the broader business plan that I think we’ve been deploying and talking about doing more of and this just accelerated it,” DHC President and CEO Chris Bilotto told me.

As WTWH Media Editorial Director Tim Mullaney wrote in 2021, regional operators are now akin to market specialists, helping larger partners do business with new and incoming older adults. The DHC transition, coupled with other recent moves from REITs, shows that this trend has only accelerated since then.

Operators are tilting toward this future, too. I recently spoke with Phoenix Senior Living President and CEO Jesse Marinko, who told me he believes the industry is “entering a new era of collaboration between REITs and operators—one that’s built less on pure scale and more on alignment.”

“Ownership groups are looking for partners who can provide transparency, operational integrity, and data-driven performance without sacrificing culture,” he said.

In this week’s exclusive, SHN+ Update, I analyze the recent DHC-AlerisLife transition and offer the following takeaways:

– Market factors have pushed ownership toward regional partners

– Why regional operators are ‘the most effective partners’ for ownership groups

– How operators of recently transitioned communities view the future of owner-operator relationships

Industry evolves away from ‘purely centralized management’

Ownership groups are fueling the shift toward regional operators, using hyper-local sales and marketing to lift occupancy, margins and net operating income (NOI).

Bilotto said owners now favor regional “sharpshooter” operators that cluster locally rather than national platforms. He pointed to the transfer of AlerisLife’s Pacific Northwest assets to Sinceri Senior Living; AlerisLife had “very little visibility” there before.

Regional operators can understand local markets and sales and marketing better than a decentralized larger operator, according to Bilotto. Sinceri devoted an “outsized amount” of resources and regional support to the portfolio segment, helping to have more insight on occupancy and revenue trends.

“Less local presence means fewer chances to bring residents in and elevate care. Scaled across markets, that creates pockets without a focused, densified approach, and that can impair opportunity,” Bilotto told me.

A host of factors in the last few years have pushed DHC and other ownership groups to grow in similar ways. Operators sometimes struggle to hire and retain workers at the community level, and other costs can eat into their margins. But by clustering their communities in a market, they can pool their resources and deploy staff in a more flexible way than a national organization. As such, ownership groups are preferring to work with operators that have dense local footprints.

In 2021, Welltower (NYSE: WELL) acquired a portfolio of nearly 90 communities managed by Holiday Retirement for almost $1.6 billion. Originally, national senior living operator Atria Senior Living managed the communities, but in 2024 Welltower broke up the portfolio and assigned it to six operators more focused on specific regions.

After the transitions, Welltower reorganized community management and sales at the regional level, along with renovating common areas and units to improve resident satisfaction. This resulted in growing occupancy in the portfolio by 560 basis points since the start of 2025.

Following the breakup of the Enlivent portfolio in 2023, Sabra Healthcare REIT (Nasdaq: SBRA) shifted 11 assisted living and memory care communities to Inspirit Senior Living. In 2025, Invesque (TSX: IVQ) completed transitions to Viva Senior Living and Constant Care Management, citing state-specific operating experience and Viva’s regional experience as contributing factors to the transition.

Discovery Senior Living CEO Richard Hutchinson told me that the recent transitions from DHC to the Bonita Springs, Florida-based operator “validates” the company’s multi-brand management company approach across its nationwide portfolio.

“The industry is evolving away from purely centralized management toward localized leadership anchored in group accountability across various markets,” Hutchinson told me.

The next phase of value creation won’t come from monolithic, national operating platforms. It will come from operators that understand their markets. I believe gone are the days of the sprawling, single-brand model while multi-brand “market sharpshooters” will convert leads faster, staff more reliably and better manage fixed costs.

Why regional operators have emerged as ‘the most effective partners’

Regional operators bring local knowledge and resources to bear closer to communities, allowing for a more nimble approach toward increasing occupancy and margins, according to Marinko.

The Roswell, Georgia-based operator has steadily grown with institutional partners, taking on clusters of communities for various ownership groups, including DHC, across the southeast. Marinko called regional operators “some of the most effective partners” for institutional ownership groups, able to bring “agility, accountability and market familiarity that large national platforms often struggle to maintain at scale.”

Marinko told me that regional operators understand both local market dynamics and referral networks along with a more intimate understanding of regional staffing issues.

The attractiveness of regional operators also allows for “immediate benefit of operating synergies” since these teams don’t need to bring on more staff to support taking on communities due to pre-existing regional resources, Bilotto told me. This allows ownership groups to “get the benefit” of other properties managed by an operator in the region despite whether or not the property in question is owned by an outside group.

Both Discovery and Sinceri bring “core densification in certain markets” with subbrands and business plans that are “specifically targeting a certain product type” in the continuum of care.

“The structure they have, the presence they have in a market and then the function of their setup as organizations make sure that we’re still getting that sharpshooter, high touch team that can really make a difference,” Bilotto told me.

Take Discovery Senior Living’s business assimilation team (BAT), for example. The company’s transition team was created specifically to “address the stale industry paradigm” owners face in making a transition to a new operator. The BAT includes subject matter experts covering operations, sales, marketing, finance, IT, risk, legal and compliance, and the “frontline group” acts as an “operational bridge” during every transition. The “special forces” team, as Hutchinson describes BAT, the cross-department effort creates a “live running list” of issues that must be addressed with respective management companies and maintains “high-touch communication” with ownership groups to inform decision making.

“We want to ensure residents, families, and on-site teams feel informed, supported and connected. That is the foundation that enables everything else including performance, stability and trust,” Hutchinson told me.

I believe the next era of owner-operator relationships will hinge on density. Operators with clustered communities and focused sub-brands know their markets the best, are able to be nimble in staffing and more quickly divert resources should problems in transition arise.

‘A fundamental shift toward strategic partnerships’

Hutchinson views the current state of operators and ownership groups aligning through regions as a “fundamental shift toward strategic partnerships,” with operators bringing data and scalable infrastructure to become partners as these relationships become “more transparent, more performance-oriented and more integrated.”

While “performance-oriented” sounds great, it’s a different thing entirely to make this play out at the community level as operators juggle NOI targets and staffing issues. I believe true partnerships must rely on shared data dashboards, and weathering challenges side-by-side as they arise.

Tutera Senior Living has added 45 communities to its ranks since 2023, and recently added 19 additional communities through the AlerisLife transition with DHC. The pivot toward regional partners is a “positive evolution” for the industry, according to Tutera President and COO Randy Bloom.

But fast growth can’t happen without strong operational support, defined hiring pipelines and adaptable clinical teams. Where the true challenge lies is in integrating communities to a new operator, as seen by Tutera’s quick growth and Discovery’s BAT team.

“When strong operators and forward-thinking owners work together, we can move faster, respond more strategically to market shifts, and build environments where residents and team members thrive,” Bloom told me.

Moving faster shouldn’t mean cutting corners in operations, and it means operators must have strong workforce and hiring strategies paired with local market knowledge to out-maneuver less agile management companies.

In the years ahead, Marinko told me he believes the industry is entering a “new era of collaboration” between institutional ownership groups and operators, one that’s built on alignment over pure scale as “shared priorities” in workforce stability, capital reinvestment and long-term community health bring operators and owners together.

“The traditional landlord-operator divide is narrowing as both sides recognize that sustainable success depends on partnership, not just property management,” Marinko said.

If this is a “new era,” as Marinko notes, I believe it will be defined less by who owns what and more by how well ownership groups and operators work together. Regional operators that are transparent and bring operational discipline will set the pace for what future growth looks like in senior living.

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