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Senior Living Community Management Agreements
 12 Months Ended
Dec. 31, 2025
Risks and Uncertainties [Abstract]  
Senior Living Community Management Agreements Senior Living Community Management Agreements
Our managed senior living communities are operated by third parties pursuant to management agreements. Beginning in September 2025, we transitioned the management of 116 of our senior living communities previously managed by Five Star Senior Living, or Five Star, which was an operating division of AlerisLife, to seven different third party managers in connection with AlerisLife's sale of all of its assets and the wind-down of its business. As of December 31, 2025, we completed the transition of the management agreements for all of the Five Star managed senior living communities to these managers. We lease nearly all of our senior living communities managed by third party managers, to our TRSs.
Management Arrangements with Five Star. Prior to the transition of the Five Star management agreements described above, we and Five Star were parties to an amended and restated master management agreement, or the Master Management Agreement, for the senior living communities that Five Star managed for us. Pursuant to an amended and restated guaranty agreement, AlerisLife guaranteed the payment and performance of each of its applicable subsidiary’s obligations under the applicable management agreements.
Pursuant to the Master Management Agreement, Five Star received a management fee equal to 5% of the gross revenues realized at the applicable senior living communities plus reimbursement for its direct costs and expenses related to such communities. The Master Management Agreement was scheduled to expire in 2036. In December 2025, we and Five Star terminated the Master Management Agreement as part of the wind-down of AlerisLife's operations.
In connection with ABP Trust’s acquisition of AlerisLife on March 20, 2023, we amended the Master Management Agreement to eliminate any change of control default or event of default provisions effective upon the consummation of the AlerisLife acquisition by ABP Trust. See Note 8 for further information regarding ABP Trust’s acquisition of AlerisLife.
In January 2025, we sold a closed senior living community that had previously been managed by Five Star. Additionally, in October 2025, we sold two senior living communities that had previously been managed by Five Star. We and Five Star terminated our management agreements for these senior living communities in connection with these sales. See Note 3 for further information regarding these sales.
Our Senior Living Communities Managed by Five Star. Five Star managed 0, 118 and 119 of our senior living communities as of December 31, 2025, 2024 and 2023, respectively.
We incurred management fees payable to Five Star of $36,226, $42,474 and $40,119 for the years ended December 31, 2025, 2024 and 2023, respectively. For the years ended December 31, 2025, 2024 and 2023, $34,617, $40,212 and $37,436, respectively, of the total management fees were expensed to property operating expenses in our consolidated statements of comprehensive income (loss) and $1,609, $2,262 and $2,683, respectively, were capitalized in our consolidated balance sheets. The amounts capitalized are being depreciated over the estimated useful lives of the related capital assets.
Prior to the sale of their Ageility business to Fox Rehabilitation on June 17, 2024, Five Star also provided certain other services to residents at some of the senior living communities it managed for us, such as rehabilitation services. At senior living communities Five Star managed for us where Five Star provided rehabilitation services on an outpatient basis, the residents, third party payers or government programs paid Five Star for those rehabilitation services. At senior living communities Five Star managed for us where Five Star provided both inpatient and outpatient rehabilitation services, we generally paid Five Star for those rehabilitation services and charges for these services were included in amounts charged to residents, third party payers or government programs. During 2023, Five Star closed all inpatient clinics and as such we do not expect to incur these fees to Five Star in the future. We incurred fees $1,213 for the year ended December 31, 2023, with respect to rehabilitation services Five Star provided at our senior living communities that are payable by us. These amounts are included in property operating expenses in our consolidated statements of comprehensive income (loss).
Until December 31, 2025, we leased space to Five Star at certain of our senior living communities, which, prior to June 17, 2024, Five Star used to provide certain outpatient rehabilitation and wellness services through the Ageility branded business. Beginning on June 17, 2024, Five Star subleased this space to a subsidiary of Fox Rehabilitation, which acquired the Ageility branded business from AlerisLife on that date.
Our Senior Living Communities Managers. As of December 31, 2025, 2024 and 2023, respectively, our managers managed 212, 114 and 113 of our senior living communities, including closed communities. The terms of the management agreements with our third party managers are generally as follows: the managers will receive a management fee equal to 5% to 6% of the gross revenues realized at the applicable senior living communities. Certain of our management agreements also provide that the manager will receive a reimbursement for direct costs and expenses related to such communities. Additionally, the managers have the ability to earn incentive fees equal to 15% to 30% of the amount by which EBITDA of the applicable communities exceeds the target EBITDA for the applicable communities. The managers can also earn a construction supervision fee ranging between 3% and 5% of construction costs.
The initial terms of the management agreements are generally five to ten years, subject to automatic extensions of successive terms of two years each unless earlier terminated or timely notice of nonrenewal is delivered. The management agreements also generally provide us with the right to terminate the management agreements for communities that do not earn 70% to 85% of the target EBITDA for such communities, after an agreed upon stabilized period.
As a result of the transition of 116 of our senior living communities managed by Five Star to different third party managers, we incurred transition costs, including certain termination fees and other costs associated with the re-branding and marketing of these communities. For the year ended December 31, 2025, we recorded $10,356 of these costs to acquisition and certain other transaction related costs in our consolidated statements of comprehensive income (loss).
In March 2024, we terminated our management agreement with one of our managers which managed 13 of our communities located in Wisconsin and Illinois and transitioned these communities to another manager with which we have an existing relationship. The terms of the management agreement for these communities are generally consistent with the terms of the existing management agreements with our managers. We paid transition costs, including termination and other fees, of $2,228 related to the transition of these communities for the year ended December 31, 2024.
We incurred management fees payable to our managers, other than Five Star, of $32,861, $23,283 and $21,863 for the years ended December 31, 2025, 2024 and 2023, respectively. Additionally, we incurred incentive fees to certain of our operators of $637 and $241 during the years ended December 31, 2025 and 2024, respectively. These amounts are included in property operating expenses in our consolidated statements of comprehensive income (loss).
The following table presents residents fees and services revenue from all of our managed senior living communities disaggregated by the type of contract and payer:
Year Ended December 31,
Revenue from contracts with customers:202520242023
Basic housing and support services$1,040,322 $972,307 $915,528 
Private pay and other third party payer SNF services 167,709 171,741 146,767 
Medicare and Medicaid programs104,624 100,341 89,613 
Total residents fees and services$1,312,655 $1,244,389 $1,151,908 
The following table provides a summary of our managers that manage a large concentration of our senior living communities as of December 31, 2025:
ManagerNumber of Communities% of Gross Real Estate Properties
Sinceri Senior Living3830.8 %
Discovery Senior Living4423.7 %
Tutera Senior Living188.9 %
Charter Senior Living307.0 %
Phoenix Senior Living265.7 %
All other managers5523.9 %
Total (1)
211100.0 %
(1)Excludes one closed senior living community.