Residents of The Village at Gainesville and their family members clutched pens and notepads as they sat shoulder to shoulder in the ballroom of the retirement community’s Tower Center building last week, ready with questions about their potential new owner. 

In July, the senior living community owned by non-profit SantaFe Healthcare signed a preliminary agreement with alternative asset management company Fortress Investment Group, setting the stage to shift The Village into for-profit status.  

The purchase is part of a growing national trend of for-profit companies buying not-for-profit senior living facilities and services. According to Ziegler Investment Banking, nearly 900 not-for-profit senior living communities have changed to for-profit ownership since 2015. BrightSpring Health Services is expected to finalize the purchase of Gainesville’s Haven Hospice later this year. 

Last Wednesday’s 1 p.m. meeting at The Village was one of three informational sessions that day. Each included the property management team and Fortress representatives addressing questions about the new acquisition and laying out future plans.  

A resident of The Village invited Mainstreet to the meeting, but both The Village and Fortress declined to be interviewed for this story.  

Ron Jennette, SantaFe Senior Living’s president and chief operating officer, opened the meeting by explaining how The Village got to this moment and where they are in the process, since the sale is not final.  

Representatives said they anticipate the deal to be finalized by the end of the year or first of 2025. The primary outstanding task is to transfer The Village’s loan from the U.S. Department of Housing and Urban Development (HUD) to Fortress.  

“It’s sort of like a house,” Jennette said. “We have a buyer, but we haven’t closed yet. So SantaFe Healthcare, the sponsor, is still your owner.” 

Fortress managing director Pete Stone said that even though the time involved in the assumption process involves risk of the deal falling through, that’s “an incredibly low probability, and we’re preparing to be owners.” 

Jennette said The Village began looking for a new owner after SantaFe Healthcare sold its health insurance company AvMed Inc. to Sentara Healthcare in December 2022. 

SantaFe’s board spent the next year considering “the future of the organization without the big primary piece of the organization,” Jennette said, before divesting all operations and exiting senior living and hospice entirely. All plans in motion for renovations and expansions at The Village were dissolved.  

“I had no choice but to find the next best possible owner for you. And actually, these guys are better suited,” Jennette said.  

Founded in 1998, Fortress Investment Group is a New York-based management controlled, global investment company. With 68 percent of its equity owned by Abu Dhabi-based investment group Mubadala Capital, Fortress oversees some $48 billion in managed assets in nearly 2,000 different institutions around the world. 

Fortress specializes in acquiring companies experiencing financial problems. Recently, Fortress affiliates created RL Investor Holdings LLC to acquire the Red Lobster restaurant chain and help it climb out of its Chapter 11 bankruptcy restructuring.  

Fortress has invested in senior living communities since its founding and currently owns ChampionsGate near Orlando, as well as communities branded under Sonata in Windermere, Coconut Creek, Boca Raton, Delray Beach, Boynton Beach and Vero Beach. 

During the meeting, Rebecca Catalanotto, regional executive director of The Village, said more than 10 companies expressed interest in buying the retirement community. She said she looked for a company larger than Santa Fe Senior Living that could offer additional financial resources and expertise in senior living, as well as one that had a strong vision and plan for the future of a legacy community.  

“Many of you here today, we served your parents…that’s a beautiful story to tell. It’s something that we’re so proud of, and it’s something that we want to continue,” Catalanotto said. “It’s important that we stay relevant for all of you, but also that we continue to grow and capture that next group of seniors that are coming.” 

She also acknowledged that The Village is both a business with assets and a home to its residents. She said the new buyer must understand and respect the culture residents and associates have built in a “business where people care for people.” 

Jennette and Catalanotto said Fortress’s commitment to The Village’s goals was evident in how the company put a team on the ground to go through the property and come up with detailed plans for its future during the initial “due diligence” period of paperwork. 

Stone said getting to invest in “such a special team and such a tight-knit community of residents” at The Village was an opportunity his company “jumped on.”  

With more than 100 acres and nearly 100 percent occupancy, The Village at Gainesville is the fourth largest rental community in the country, Stone said. He cited all that Gainesville offers residents, including healthcare options, good cost of living and schools. 

Stone said Fortress will keep The Village’s same management team and provide them with the resources needed to “continue to have this place be special.” Those resources will be geared toward lowering administrative costs and understanding the needs of the residents to know where to invest in the property, he said.  

Fortress plans to first improve transportation at The Village with additional buses and golf carts, strip Lake House—the oldest building on the property—down to its studs in order to resolve plumbing issues, and develop a plot of land known as the Atrium near the Cypress apartments to make room for the list of people waiting to get into the community. 

During audience Q&A, Jennette, Catalanotto and Stone addressed five of the most-asked questions from more than 50 pre-submitted by residents. Staff then passed a microphone around for live questions.  

In response to a question about how going from not-for-profit to for-profit will impact residents, Stone said The Village’s financial margin was a sign of a well-run community that Fortress considered in its bid. 

Although there will be higher real estate and sales taxes, as well as incremental software costs because Fortress is for-profit, Stone said those expenses were factored into the analysis in the bidding process. Maintaining the same management team will keep day-to-day things from changing, he said. 

According to Catalanotto, the same management team also takes care of the “Are you going to dramatically increase our rents?” question.  

The Village plans to continue using the same process it used every year with SantaFe Healthcare for determining annual rate increases, she said. The process weighs factors such as The Village’s own expenses, inflation, changes in insurance, the housing market and anything “we need to spend next year to continue to fulfill our mission, to continue to serve our residents.” 

Catalanotto said under Fortress The Village would continue to be transparent with residents, who should be budgeting for a 3 to 5 percent annual increase. 

“The reality is, it’s really nobody else’s fault. We’re the ones who are developing the budget,” Catalanotto said. “We are experiencing some wage pressure, but we are able to absorb that and we’re working through that. We’re going to have maybe some new benefits and some changes, but there’s nothing that’s impacting our budget right now, or that’s impacting our market, that would expect us to go outside of that 3 to 5 percent parameter.” 

Stone said Fortress does not need to increase rent in order to make The Village a successful investment.  

Jennette said The Village was paying a management fee to SantaFe Senior Living and overhead fees into SantaFe Healthcare, and now that those fees are going away, the existing operating margin will only increase.  

In response, one resident said if there’s a margin, management should be lowering rents. Another asked if residents on rental assistance would still be covered.  

“There are dollars already set aside for those people,” Jennette said. 

“So if I run out of my money, you’ll pay for my rent?” the resident asked. 

“We’re not gonna let you run out of money,” Jennette said. “Don’t worry.”  

Stone also said The Village will remain a rental community.  

“Our goal, and I think the rental model aligns with the interest, is to have happy residents,” Stone said. “We want them to continue to be happy here, and we want to earn their trust on a monthly basis. And obviously that’s what Rebecca does so well here.”  

When asked about what will happen to The Village Foundation, a platform for anyone to donate to The Village, Catalanotto said the organization plans to create a foundation that will absorb the old one. 

Jennette said the foundation is honoring donor wishes using all the donations for The Village. But the challenge going forward, he said, is that while donations could be given to benefit associates or residents directly, donations cannot be given to a for-profit for the benefit of the for-profit.  

One resident asked, “If your company is an investment company, it requires a certain profit for investment. If you don’t get that profit investment, what is your next act to do to bring that profit back up?” 

Stone said that while some investments go really well, others don’t. He said Fortress knows what it takes to run a good senior housing facility. 

The final pre-submitted question asked, ”What is your long-term plan for the community?” 

Stone responded that there are a lot of owners who try to come into broken situations and quickly fix them just to sell and make a profit, but Fortress is planning for the long-term future at The Village. 

“We know that there’s a mission on top of profitability that needs to be done. We know that the long-term success of this community is you really need to have happy residents, you need to provide great care. You need to have fantastic staff, and we would never do anything to jeopardize that,” Stone said. “Rest assured, we’re always going to do the right thing.”