Iowa-based Sherer Management is exiting the hospice and senior living industries with the sale of its hospice and senior living assets. The company is keeping the identities of the buyers confidential. They include a regional senior living operator and a private equity firm. Financial terms were undisclosed.
Sherer Management is a family-owned business that operated continuing care retirement communities in western Iowa, including Rose Vista in Woodbine and Longview Home in Missouri Valley. These locations offer skilled nursing, assisted living and independent living services. Sherer’s hospice company, Generations, provided care in those facilities. The Sherer family has owned and operated hospice and senior living agencies for more than 60 years.
Commercial real estate finance company Lument advised the Sherers on the deal.
“The decision to sell our family business was very difficult and emotional, but we are confident this was the best path forward,” said Noel Sherer, president of Sherer Management. “Lument was an outstanding partner in facilitating this transition, and they stuck with us through extraordinarily difficult circumstances, such as the effects of COVID-19.”
Lument is a subsidiary of the financial services firm ORIX Corp. ORIX created Lument in late 2020, bringing three acquired businesses under a single brand, including Hunt Real Estate Capital, Lancaster Pollard and RED Capital Group.
Senior living occupancy and move-ins declined precipitously industry-wide during the COVID-19 pandemic. Many seniors avoided or postponed moving into senior living due to fears of contracting the virus. The inability to see family members due to safety restrictions during the outbreak was also a factor. This trend in turn reduced hospice referrals, admissions and length of stay for many providers, including Generations Hospice.
Through March of 2021, senior living providers nationally have incurred an estimated $22.5 billion in uncompensated financial losses due to the pandemic, with uncompensated losses expected to reach $29.8 billion by the end of the second quarter of 2021.
Pandemic-related headwinds also contributed to Brookdale Senior Living’s (NYSE: BKD) decision to sell an 80% stake in its hospice and home health business to the hospital system HCA Healthcare (NYSE: HCA) earlier this year for $400 million.
“As expected COVID-19 continues to have a significant impact on our performance, including closing our communities as necessary to visitors and movements to better protect our residents,” Brookdale President and CEO Lucinda Baier said in an earnings call.
Generations cared for 66 hospice patients during 2016, the most recent year for which data were available. Of those, 55 received care in a senior living or skilled nursing facility. The average age of their patients that year was 84-years-old.
Iowa ranked seventh nationwide in hospice utilization among Medicare decedents in 2018, with 56.2% electing the benefit, according to the National Hospice & Palliative Care Organization. The national average was slightly more than 50% that year.
Jim Parker is a subculture of one. Swashbuckling feats of high adventure bring a joyful tear to his salty eye. A Chicago-based journalist who has covered health care and public policy since 2000, his personal interests include fire performance, the culinary arts, literature, and general geekery.