The COVID-19 pandemic has created immense challenges for behavioral health providers across the United States. Many organizations have faced rising operational costs, declining revenue streams, and overwhelming patient demand. According to the National Council for Behavioral Health, 71% of providers had to cancel, reschedule, or turn away patients in the months following the onset of the pandemic. Yet, in the midst of these struggles, Landmark Recovery has managed to pursue growth. The substance use disorder (SUD) treatment provider has defied industry trends by expanding its footprint and planning new facilities, thanks in large part to its unique approach to real estate ownership and its relationship with real estate investment trusts (REITs).
Building Growth Through Real Estate Ownership
While most addiction treatment providers lease their properties, Landmark Recovery has taken a different path. The company owns the majority of its treatment centers, a strategy that provides stability and credibility with banks and investors. COO Matt Boyle has emphasized that owning real estate gives Landmark a financial edge, making it easier to secure funding partnerships with REITs and lending institutions. Unlike traditional operators, Landmark leverages its real estate portfolio to build trust with partners and unlock new capital. This approach has helped the organization maintain momentum even during a time when many providers are forced to downsize.
Partnership with Sabra Health Care REIT
One of Landmark Recovery’s most important financial partnerships is with Sabra Health Care REIT, a publicly traded company that specializes in healthcare-related properties. In 2019, Sabra purchased two of Landmark’s treatment centers located in Carmel, Indiana, and Louisville, Kentucky, for $14.8 million. Sabra then leased the facilities back to Landmark, providing the treatment provider with much-needed capital while allowing it to retain control of its business operations. This sale-leaseback model has fueled Landmark’s expansion by freeing up funds to invest in new facilities. The partnership has proven especially valuable during the pandemic, as the capital provided by Sabra helped Landmark weather economic uncertainty while continuing to grow its treatment network.
The Importance of REIT Relationships in Healthcare
Real estate investment trusts are common in sectors such as nursing homes, assisted living facilities, and medical office spaces. However, REITs have historically stayed away from behavioral health providers due to concerns about profitability and risk. Landmark Recovery is one of the few exceptions. By demonstrating stability through its property ownership and strong management practices, the company positioned itself as an attractive partner for REIT investors. The arrangement benefits both sides: Landmark gains access to capital without losing business ownership, while Sabra diversifies its portfolio with a growing behavioral health partner.
Landmark’s Deep Roots in Real Estate
Landmark Recovery’s real estate-focused strategy stems from its origins. The company’s story dates back to 1988 when Clifford Boyle, father of COO Matt Boyle, founded Simsbury Associates, Inc., a real estate development company in South Boston. Initially, Simsbury Associates focused on rehabilitating historic properties for affordable housing. Over time, the company shifted toward senior housing, launching Landmark Senior Living, which became a significant player in assisted living communities. By 2014, the Boyle family saw an opportunity to diversify further into substance use treatment, recognizing both the rising need for services and the financial advantages of the space.
Transition to Substance Use Disorder Treatment
The move into addiction treatment was not just financially driven but also personally meaningful for the Boyle family. With personal connections to the recovery community, including family members in long-term recovery and ties to leadership at the National Association of Addiction Treatment Providers (NAATP), the Boyles understood the importance of quality care. Addiction treatment also presented a more cost-effective growth opportunity compared to assisted living. Facilities required lower capital investment, and the margins were higher with a shorter return-on-investment timeline. Landmark Recovery was officially established in 2016 as a holding company under Simsbury Associates, carrying forward the family’s expertise in real estate and applying it to a new area of healthcare.
Operational Advantages and Efficiency
Landmark Recovery’s ability to remain profitable during turbulent times stems not only from its financial structure but also from its operational model. The provider offers a full continuum of care, from detoxification to outpatient services, ensuring patients do not fall through the cracks. Detailed scheduling, rigorous training, and centralized management further boost efficiency and reduce costs. According to Matt Boyle, Landmark’s cost per admission and cost per patient day are well below industry averages, which has allowed the company to remain competitive and sustain growth even during COVID-19 disruptions.
Expansion Plans Despite COVID-19
When the pandemic struck, Landmark Recovery had to quickly implement new protocols, including enhanced cleaning measures, COVID-19 testing, and screening procedures during intake. Despite these additional costs, demand for services increased as the addiction crisis deepened during the pandemic. Landmark maintained occupancy rates between 85% and 90%, a strong figure given industry challenges. The organization remains committed to its growth trajectory, with plans to operate between 18 and 20 facilities by 2022. While COVID-19 slowed some logistics, such as licensing, zoning hearings, and environmental reports required for new building acquisitions, the long-term expansion strategy remains unchanged.
How REIT Partnerships Accelerated Growth
Landmark’s relationship with Sabra Health Care REIT has become even more critical during the pandemic. The financial stability provided by the partnership allowed Landmark to continue developing new facilities while many competitors scaled back. Sabra CEO Rick Matros has expressed ongoing commitment to behavioral health investments, noting that opportunities like Landmark align with the company’s strategy to pursue institutional-level partnerships rather than high-end boutique facilities. This shared vision has helped Landmark not only sustain its growth but also position itself as a leader in the evolving behavioral health investment landscape.
Looking Ahead: The Future of Landmark Recovery
The Boyle family continues to own nearly all of their properties, reinforcing the company’s foundation of stability and independence. Landmark Recovery’s unique model of combining real estate expertise with addiction treatment services provides a blueprint for other providers navigating uncertain times. As the demand for behavioral health services grows, partnerships with REITs and innovative financial strategies will likely become more common. Landmark’s success demonstrates that with strong leadership, efficient operations, and creative capital structures, expansion is possible even in the midst of a global crisis.
Conclusion
Landmark Recovery’s ability to grow during the pandemic highlights the importance of financial innovation in healthcare. By leveraging real estate ownership and forging a partnership with Sabra Health Care REIT, the company has expanded its footprint, strengthened its operations, and continued to meet the rising demand for addiction treatment services. While many providers have struggled with closures and financial losses, Landmark Recovery has proven that resilience and growth are possible with the right strategy. As the behavioral health sector continues to evolve, Landmark’s model may serve as an inspiration for other organizations looking to balance financial sustainability with the urgent mission of saving lives.
