With five skilled nursing properties acquired this month and two more due to come on board in August, Indiana operator Majestic Care is definitively in growth mode.
The operator continues to look for different opportunities to serve its core Midwest market while expanding to other geographic areas, Majestic CEO Bernie McGuinness said, including expansion into the Southeast.
“We look at a regional approach where we can find a cluster of buildings in a different state or in a different market, or we can provide that regional support, though we’ll [continue to] have the corporate office in Westfield, Ind.,” McGuinness explained.
July additions include three facilities in Indiana and two in Michigan, with David Marx, CEO of Marx Development Group as the purchaser; August facilities are all in Indiana, McGuinness said. Majestic told SNN it prefers not to disclose purchase price for these transactions.
Riskier Acquisitions
Once its August acquisition closes, Majestic will own and operate 21 SNFs and five assisted living facilities across Ohio, Indiana and Michigan. Its corporate workforce has grown from four to more than 50 since its founding in June 2018; McGuinness expects that number to remain stable for the rest of the year.
The pandemic has changed the types of deals McGuinness is seeing in the real estate market.
It’s more difficult to accurately predict how a potential acquisition will perform when occupancy is still recovering and the industry is dealing with a changing labor market, McGuinness said, citing an increase in staffing agency use among SNFs.
“Understanding the long-term impact of the labor market, and when it will bounce back with some more applicants for frontline caregivers, it’s made evaluating these opportunities … quite a challenge coming out of the pandemic,” noted McGuinness.
Localized Health Care
Majestic works with local teams of nurses to administer care, and regional vice presidents serve as “boots on the ground,” McGuinness said.
It’s hyper-localized health care, a point made by Bill Kauffman in a conversation with SNN; Kauffman is a senior principal with the National Investment Center for Seniors Housing & Care (NIC).
Operators should be aware of what health networks are in a given location, Kauffman noted in the Q&A, as well as how prevalent managed care is, if there are accountable care organizations or wide use of institutional special needs plans (I-SNPs) by nearby operators.
Kauffman said a successful operator can jump on these factors to better appeal to community demand.
McGuinness agrees that skilled nursing is a “very local business.”
“They know the local survey themes and some of the nuances that come in the different states. They know the different reimbursement systems,” noted McGuinness. “As we grow we want to be strategic and find cluster opportunities in these different markets as we expand outside of the Midwest.”
Continuum Care Expansion
Service line expansion and care continuum additions are part of Majestic’s growth strategy too; the group plans to expand its dialysis service, memory care and add a senior living division and ventilator units to its facilities.
The ink isn’t even dry on Majestic’s home health deal — the operator acquired what will soon be called Majestic Home Health Care and Operation in Indiana about a month ago.
The Majestic team isn’t at liberty to discuss which home health company that is yet, McGuinness said.
Its board of directors have discussed options in palliative care and hospice too.
“The majority of our growth is in skilled nursing,” added McGuinness. “As a younger organization we continue to look at different service lines, but keep our core business in the skilled nursing arena. That’s our expertise.”
Companies featured in this article:
