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New Senior Living Investor Readies Plan to Deploy At Least $300M This Year

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A newly repositioned investment company plans to invest $300 million or more in the senior living industry in 2024, both in operators and properties.

The company is SPHERE Investments, with a name that is an acronym for “Strategic Public Health Equities and Real Estate.” The company was part of Flagler Healthcare Investments until February, when it repositioned to reflect a new mission of investing in properties and companies lying “beyond traditional healthcare infrastructure.”

That includes the senior living sector, where SPHERE is now looking to grow in 2024. This year, the company is both looking to invest in senior living operators and acquire senior living properties as part of distinctly separate growth strategies.

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The company’s “sweet spot” lies in operators and communities dealing with a combination of independent living, assisted living and memory care services, according to Founder and CEO Didier Choukroun.

SPHERE’s long-term goal is to build a portfolio of properties that are also mostly managed by the operators it invests in. Though it has not yet announced any acquisitions or investments in the space, Choukroun said the company has a few letters of intent out to become a “minority but important” owner of a management company. The company also has a small handful of senior living properties under contract.

SPHERE is coming to the space with a health care portfolio built over a decade that today includes medical office buildings, outpatient surgery centers and long-term acute care hospitals in 15 states. In addition to senior living, the company also is looking to grow in workforce and general housing.

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Powering the company’s overall strategy is a data platform that it acquired in 2014. The business intelligence platform has “algorithms, multiple data sources and terabytes of claims, clinical, socio-economic, psychographic and medical real estate data, designed to provide readily actionable reports,” according to its website.

Choukroun is not looking to simply take advantage of current market dynamics and grow a senior living platform, he is seeking to “change the business model” for how owners and operators work together. Specifically, he believes that senior living operators do not have properly diversified revenue sources and spend too much time fighting each other on resident rates.

He sees SPHERE acting as a partner to senior living operators, both by investing in them and giving them access to a suite of data services that help them make better decisions. In theory, those companies would then be better equipped to improve resident outcomes by spending more time and resources on wellness or preventative care – a win-win for all involved.

“We believe that, by investing in a management company with our digitization and ideas that we have to improve the outcome of the residents, we should be able to create a very profitable company and thus, at the same time, benefit the ownership on the real estate side,” he said.

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