Ensign Adds 17 Skilled Nursing Communities as Sabra Deal Closes 

The Ensign Group (Nasdaq: ENSG) on Wednesday announced that the company is assuming operations of 17 skilled nursing communities in California, as part of a previously announced deal with Sabra Health Care REIT (Nasdaq: SBRA).

That deal involves 20 communities total, which previously were operated by North American Health Care.

The properties located in Ensign’s home state bring its portfolio to 288 health care operations across 13 states. Ensign’s real estate investment trust subsidiary, Standard Bearer, owns 108 real estate assets.

Ensign has sped ahead as one of the largest nursing home operators in the country, overtaking Genesis HealthCare late last year. The group had a busy third financial quarter as well, with Ensign COO Chad Keetch telling shareholders Q3 was “one of the biggest” acquisition quarters in several years.

Ensign-affiliated companies entered into two separate triple net leases with affiliates of Sabra as part of the California deal, one with an initial 18-year term lease and the other with a 20-year term lease, Ensign said in a statement.

Three other properties will be subleased to Aspen Skilled Healthcare, with Sabra’s consent. Rent from the subleased properties won’t contribute to Ensign’s overall performance, the company said.

Ensign CEO Barry Port said the properties are “a perfect fit” within the company’s existing footprint, adding strength to already strong and mature markets.

“Our strong team of local leadership in California have been executing on detailed, building-by-building transition plans for the last several weeks,” added Port. “Due to some of the unique aspects of this transaction, we are grateful to both Sabra and North American for working with us with a common goal, to ensure continued clinical and operational strength in each of these communities.”

Port expects transitions to take some time, citing staffing agency challenges. Still, he has confidence in local leaders to “implement Ensign-proven cultural and operational principles” and in time contribute to the success of their market clusters.

He refers to Ensign’s localized business model, which allows locally-driven leadership to respPnd to unique needs of their markets.

A prime example of this business model is seen in the California acquisition, with Flagstone Healthcare acting as Ensign’s California-based subsidiary.

“Our market resources and cluster partners are so excited to add these operations to the team,” Flagstone president Adam Willits said in a statement. “We are very impressed with everyone we’ve been able to meet so far and can’t wait to add our experience to theirs as we seek to provide top-notch care to the residents and families we are fortunate to serve.”

Ensign is still actively seeking more real estate acquisition opportunities, along with leasing both well-performing and distressed properties, Port said in a statement.

Potential deals include skilled nursing, assisted living or other health care-related businesses in the U.S.