Utah-based Eduro Healthcare has acquired nine buildings in Texas in just under a year, including two skilled nursing facilities added last month.
Through its expansion, Eduro has continued to build on its relationship with CareTrust REIT (Nasdaq: CTRE). And, Eduro’s model is similar to that of another CareTrust tenant, Ensign Group (Nasdaq: ENSG).
By striking the right blend of local autonomy and control with a larger corporate infrastructure, Eduro VP of Investments Sam Bechthold believes the company can continue to scale successfully, even as some large providers in the space have been scaling back into more regionally-focused businesses.
Going big in the Lone Star State
The Texas pipeline is currently the biggest across Eduro’s 27-facility, 10-state portfolio, and the company is dedicating on-the-ground resources in the state, Bechtold told Skilled Nursing News.
“Whether we have a formal office there or not, we’ve got several resources that are on the ground in Texas,” Bechtold said.
While it took some time to get into the Lone Star State, Bechtold attributes Eduro’s rapid growth and success to the first investment being the “right deal.”
Eduro first entered Texas through the April 2021 acquisition of a four-property portfolio consisting of 418 beds. The buildings are located in the Houston, Austin and Dallas/Fort Worth metro areas; Eduro sees upside in being able to dedicate resources to these facilities, which were affected by severe storms.
A building acquired this month in Lockhart, Texas, also was affected by the deep freeze that hit the state in 2021, which led to damage forcing a seven-month closure.
But Eduro sees the opportunity to add value in various ways in Texas, not just by helping restore storm-damaged facilities.
“It’s definitely an area that we want to grow in, whether it’s coming in and affecting Medicaid rates or implementing a more robust therapy program, it’s a state we feel like in most cases we can have sort of an immediate impact,” Bechtold told SNN.
Growing with CareTrust
Earlier this month CareTrust acquired the Ennis Care Center, a 155-bed skilled nursing facility in the Dallas-Fort Worth area. The facility was added to CareTrust’s existing master lease with Eduro, which took over operations on Feb. 1.
The REIT was “elated” to further grow its relationship with Eduro as the operator “has proven over the past few years that their model of patient centered care and extreme focus on facility culture produces great results for their residents and staff,” David Sedgwick, CareTrust’s president and CEO, said in a news release announcing the deal.
Eduro’s operations model resembles one used by CareTrust’s primary skilled nursing tenant, the Ensign Group. This model emphasizes local leadership with an overlay of corporate support.
Eduro brings its staff to its Salt Lake City headquarters every quarter to check-in and continually stress its shared corporate culture, but administrators overall are empowered to run their facilities as needed.
The operator also has a regional director of operations role, with these leaders serving as a resource to administrators in their geographic area — but understanding it’s important that administrators continue to run their own buildings, Eduro Managing Partner Michael Bewsey said.
“That’s really helped us be successful in those far flung places like Fargo,” he told SNN.
Bewsey considers Eduro somewhat of an anomaly in its ability to grow across the country while still remaining successful – especially as the skilled nursing industry moves away from large national operators.
“I think we’re going to continue to see the regionalization of these larger companies that have failed,” he said. “But I think successful companies like Ensign, and now Eduro on a much smaller scale, is going to continue, because we figured out how to kind of do that for a bigger scale.”
Eduro is eager to continue its measured growth, not only with CareTrust, but overall in the space. Bewsey said a conservative expectation is that Eduro will acquire 10 buildings this year, and roughly that number going forward on a yearly basis.
“We just want to keep growing,” he said. “We’re pretty cautious on which buildings we take, so we’re going to be judicious in what we look at and how we look at it, but we’re having a lot of success.”
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