Ignite Medical Resorts, an Illinois-based operator of post-acute care facilities, continued its expansion push this week in a new partnership with Sabra Health Care REIT (Nasdaq: SBRA).
Ignite formally took over management of three Sabra-owned properties in Oklahoma City, Bartlesville, and Norman, Okla. on New Year’s Day, the provider announced Thursday.
The previous operator, Vision Health, had elected to exit the business, Sabra CEO Rick Matros told Skilled Nursing News via e-mail. Ignite currently serves as the manager of the SNFs, pending formal operational transfer approval from Oklahoma health officials.
The transaction marks Sabra’s first tenant relationship with Ignite, an operator that has been slowly but steadily growing its footprint across the Midwest in recent years.
Primarily focused on the “medical resort” model, or higher-end properties that target post-acute rehab residents covered by Medicare, the company currently operates three other facilities: a ground-up development in Kansas City, Mo., an existing property the company acquired in the Chicago suburb of Niles, Ill., and a SNF on the main campus of the University of Kansas Health System in Kansas City, Kan.
In its most recent three-property pickup, governed by a 15-year lease, Ignite found a natural philosophical and operational fit, CEO Tim Fields told SNN. Fields had spoken with executives at Sabra about partnering on other properties in the past, he said, but none particularly caught his eye until Talya Nevo-Hacohen — the real estate investment trust’s (REIT) chief investment officer — approached Ignite about the Vision Health portfolio.
The previous operators had already focused on a rehab-only platform with no long-term care services, in line with Ignite’s model, and had maintained the physical plants properly, he said. Fields was also attracted to the family-owned business’s overall philosophy.
“We’re looking for needles in a haystack a lot of the time,” Fields said, adding that unlike some operators in the space, Ignite generally avoids turnaround projects or facilities in receivership.
In addition, the trio of properties allowed Ignite to expand into the Oklahoma market with some level of scale; the company generally would not consider embarking on growth in a new state with a single facility, according to Fields.
“We felt it was a nice match,” he said. “We liked the markets and we liked the area.”
Ignite’s debut in the Sabra portfolio represents the latest in a growing line of REIT partnerships. National Health Investors (NYSE: NHI) invested $25 million in the development of a new Ignite facility in the Milwaukee suburb of Oak Creek, Wis., and LTC Properties (NYSE: LTC) ponied up $38 million to purchase the existing Kansas City facility and fund a land-and-development deal for a second property in Missouri. The latter deal will see Ignite and LTC paired for at least 12 years under a lease agreement.
“As we look at our future, in terms of being able to assume operations of buildings or do new developments, it’s nice to have relationships with multiple REITs,” Fields said.