The 2004 ASHA 50 rankings appear for the 11th consecutive year in National Real Estate Investor and, as always, illustrate the business activity constantly shaping all sectors of market-rate seniors housing. Although the 2004 rankings do not reflect a dramatic shift in the landscape, as was the case the previous year when Marriott (with more than 25,000 managed units) exited the senior living business, there are a number of interesting changes in both ASHA 50 lists. As has been true for the past several years, however, the vast majority of firms that appear on the 2004 ASHA 50 will be familiar to those involved in seniors housing.

Seniors Housing Owners

For the 11th consecutive year, privately held Colson & Colson/Holiday Retirement Corp. is the largest owner with domestic ownership of 33,628 units in 283 properties. Since the ASHA 50 rankings began, Holiday Retirement Corp. has increased its owned U.S. portfolio by 18,887 units.

The second-largest owner, Nationwide Health Properties Inc., is a Newport Beach, Calif.-based real estate investment trust (REIT) with 17,227 units in 214 properties. Catapulting into the third position on the ASHA 50 owners list is a private REIT, CNL Retirement Properties Inc., which was the 14th largest owner a year ago. In just a year, CNL Retirement Properties increased its seniors housing holdings by 9,505 units — from 6,697 units (53 properties) to 16,202 units (144 properties). CNL's growth (142%) was fueled by large acquisitions of two 2003 ASHA 50 firms, Horizon Bay Senior Communities, which continues to manage these assets, and EdenCare Senior Living, which does not.

The fourth-largest owner is Boston Capital, with a portfolio of 14,500 seniors housing units in 260 properties. Toledo, Ohio-based Health Care REIT Inc. is the fifth-largest owner, with a portfolio of 14,370 units in 221 communities.

In addition to the explosive growth of CNL Retirement Properties, two other ASHA 50 firms reported dramatic increases in their owned holdings between 2003 and 2004. Indianapolis-based Prime Care Properties LLC reported growth of 52%, with ownership of 6,950 seniors housing units (62 properties), up from 4,565 units (41 properties) the previous year. Privately held Atria Senior Living Group, which is headquartered in Louisville, Ky., also reported a dramatic increase (47%) in owned holdings, from 9,239 units in 2003 to 13,580 units in 2004.

Among firms making the ASHA 50 owners list for the first time is Ventas Healthcare Properties (36th largest owner), a Louisville, Ky.-based REIT that has only recently begun to acquire seniors housing assets. Other newcomers to the ASHA 50 in 2004 include Southern California Presbyterian Homes (37th largest owner), Americare (41st largest owner) and Christian Homes Inc. (46th largest owner). One ASHA 50 owner, National Benevolent Association of the Christian Church (40th largest owner), has filed for bankruptcy, announced the sale of 11 large seniors housing communities, and almost certainly makes its final appearance in the ASHA 50 rankings.

Ownership Status

Although public companies account for less than a quarter (22%) of all ASHA 50 owners, half of the largest 10 owners are publicly traded entities including: Nationwide Health Properties Inc. (2nd), Health Care REIT Inc. (5th), Senior Housing Properties Trust (6th), Sunrise Senior Living (8th) and Health Care Property Investors Inc. (9th).

For-profit, privately held seniors housing owners comprise more than half (56%) of the ASHA owners list. Privately held owners include: Colson & Colson/Holiday Retirement Corp. (1st), CNL Retirement Properties Inc. (3rd), Boston Capital (4th), Atria Senior Living Group (7th), Merrill Gardens (10th), Prime Care Properties LLC (11th), Brookdale Living Communities Inc. (12th), Simpson Housing Solutions LLC (15th), First Centrum LLC (16th), Alterra Healthcare Corp. (18th), The Shelter Group LLP (20th), Classic Residence by Hyatt (21st), The Fountains (22nd), Senior Lifestyle Corp. (27th), Lytle Enterprises LLC (28th), Hearthstone Assisted Living Inc. (29th), USA Properties Fund Inc. (30th), American House Senior Living Residences (34th), Kisco Senior Living (35th), Southern Assisted Living Inc. (39th), Americare (41st), Justus Rental Properties Inc. (42nd), LifeTrust America Inc. (43rd), Life Care Services LLC (47th), FountainGlen Properties LP (48th), George M. Leader Family Corp. (49th) and Carefree Holdings LP (50th).

The remaining 22% of the ASHA owners list are not-for-profit organizations including: Erickson Retirement Communities (13th), ACTS Retirement-Life Communities Inc. (14th), Evangelical Lutheran Good Samaritan Society (17th), Covenant Retirement Communities (24th), Retirement Housing Foundation (26th), Life Care Retirement Communities (32nd), Southern California Presbyterian Homes (37th), Front Porch (38th), National Benevolent Association (40th), American Baptist Homes of the West (44th), Asbury Services Inc. (45th) and Christian Homes Inc. (46th).

Ownership Growth Profile

In the aggregate, the largest 25 owners increased their holdings by 4%, from 229,179 units to 239,084 units. Growth among the largest 25 owners was 15% between 2002 and 2003, after an increase of 7% in the preceding year. The 10 largest owners increased their owned portfolios by 7% between 2003 and 2004, from 143,687 units to 154,089 units. The average ownership portfolio size for the 2004 ASHA 50 owners is 6,320 units, up from 6,117 units in 2003. In all, the 50 largest owners have interests in 316,006 units, up from 305,869 units in 2003.

Seniors Housing Managers

For the second consecutive year, Sunrise Senior Living Inc. is the largest manager of seniors housing, with a managed portfolio of 39,310 units in 374 properties. Colson & Colson/Holiday Retirement Corp. is the second largest manager (34,962 units in 294 properties), followed by Lake Forest, Calif.-based Professional Community Management (24,802 units in 13 properties), Life Care Services LLC (23,381 units in 81 properties) and Emeritus Assisted Living (14,709 units in 174 properties).

Baltimore-based The Shelter Group LLP is the 23rd largest seniors housing manager, increasing its managed portfolio by 60% between 2003 and 2004. Other managers reporting significant increases in the number of units managed include USA Properties Fund Inc. (49%) and Simpson Housing Solutions LLC (39%).

Ninety-two percent of the firms comprising the ASHA 50 managers list are firms that appeared in the 2003 rankings. Newcomers to the ASHA 50 managers list include: Southern California Presbyterian Homes (39th), Americare (43rd), United Methodist Homes & Affiliates (46th) and Aegis Senior Communities (49th).

Management Status

Nearly three quarters (70%) of this year's ASHA 50 managers are privately held, for-profit companies. These companies include: Colson & Colson/Holiday Retirement Corp. (2nd), Professional Community Management (3rd), Life Care Services LLC (4th), Atria Senior Living Group (6th), Erickson Retirement Communities (9th), Brookdale Living Communities Inc. (10th), Sunwest Management Inc. (12th), Merrill Gardens (13th), Simpson Housing Solutions LLC (17th), Greystone Communities Inc. (18th), The Fountains (20th), Senior Lifestyle Corp. (21st), CRSA Management LLC (22nd), The Shelter Group LLP (23rd), Classic Residence by Hyatt (24th), USA Properties Fund Inc. (26th), Leisure Care Inc. (27th), Horizon Bay Senior Communities (28th), American Lifestyles Inc. (30th), Hearthstone Assisted Living Inc. (31st), LifeTrust America Inc. (32nd), First Centrum LLC (33rd), Kisco Senior Living (34th), Southern Assisted Living Inc. (35th), American House Senior Living Residences (36th), Renaissance Senior Living LLC (38th), Summerville Senior Living Inc. (40th), Americare (43rd), Justus Rental Properties Inc. (44th), Encore Senior Living LLC (45th), George M. Leader Family Corp. (47th), Benchmark Assisted Living (48th), Aegis Senior Communities (49th) and Newton Senior Living LLC (50th).

Not-for-profit organizations comprise 18% of the managers on this year's ASHA 50 list including: Evangelical Lutheran Good Samaritan Society (14th), ACTS Retirement Life Communities Inc. (16th), Covenant Retirement Communities (25th), Retirement Housing Foundation (29th), American Baptist Homes of the West (37th), Front Porch (41st), National Benevolent Association (42nd) and United Methodist Homes & Affiliates (46th).

Publicly traded companies comprise 12% of all managers on the ASHA 50 list and include: Sunrise Senior Living (1st), Emeritus Assisted Living (5th), American Retirement Corp. (8th), Five Star Quality Care Inc. (11th), Assisted Living Concepts Inc. (15th) and Capital Senior Living Corp. (19th).

Management Growth Profile

In the aggregate, the largest 25 managers increased their holdings by 4% from 286,568 units in 2003 to 298,608 units in 2004. Growth among the 10 largest managers was 2% during this period, from 196,343 units to 201,100 units. The average management portfolio size of ASHA 50 managers is 7,591 units, up from 7,287 units the previous year. The minimum threshold for inclusion in this year's ranking for ASHA 50 managers was 2,410 units, which is 214 units more than in 2003.

Conclusion

Although there are several firms that have grown markedly in the past 12 months, such as CNL Retirement Properties, more than 90% of the 2004 ranked firms appeared in last year's ASHA 50. With dramatic increases in the cost of construction likely to limit new development activity in 2005, it can be expected that changes to the next ASHA 50 rankings will reflect the extent to which consolidation occurs.

2004 ASHA 50 - 10 LARGEST OWNERS

Company 2004 Units 2004 Properties
1 Colson & Colson/Holiday Retirement Corp. 33,628 283
2 Nationwide Health Properties, Inc. 17,227 214
3 CNL Retirement Properties, Inc. 16,202 144
4 Boston Capital 14,500 260
5 Health Care REIT, Inc. 14,370 221
6 Senior Housing Properties Trust 14,191 87
7 Atria Senior Living Group 13,580 127
8 Sunrise Senior Living, Inc. 11,448 162
9 Health Care Property Investors, Inc. 11,231 100
10 Merrill Gardens LLC 7,712 62
Total 154,089 1,660


2004 ASHA 50 - 10 LARGEST MANAGERS

Company 2004 Units 2004 Properties
1 Sunrise Senior Living, Inc. 39,310 374
2 Colson & Colson/Holiday Retirement Corp. 34,962 294
3 Professional Community Management 24,802 13
4 Life Care Services, LLC 23,381 81
5 Emeritus Assisted Living 14,709 174
6 Atria Senior Living Group 13,822 131
7 Alterra Healthcare Corporation 13,789 315
8 American Retirement Corporation 13,062 66
9 Erickson Retirement Communities, LLC 11,664 12
10 Brookdale Living Communities, Inc. 11,499 62
Total 201,000 1,522