The COVID-19 pandemic put behavioral health providers across the country under immense strain. Increased costs, new safety protocols, and reduced patient access created major financial challenges. According to a survey from the National Council for Behavioral Health, 71% of organizations had to cancel, reschedule, or turn away patients in the early months of the pandemic. Despite these challenges, one addiction treatment provider managed to defy the trend. Landmark Recovery not only continued operating, but also pursued aggressive growth plans. By leveraging a unique real estate strategy and building a strong partnership with a real estate investment trust (REIT), Landmark has been able to expand its footprint, maintain profitability, and position itself for long-term success.
Landmark Recovery’s Growth Amid Uncertainty
Founded in 2016, Landmark Recovery operates comprehensive substance use disorder treatment centers. With locations across Kentucky, Indiana, and Oklahoma, the company provides a full continuum of care, including detox, residential treatment, partial hospitalization, and intensive outpatient programs. Landmark accepts commercial insurance and Medicaid at select locations, making its services accessible to a wide range of patients. Unlike many providers forced to scale back during COVID-19, Landmark pressed forward with expansion. The company announced plans to open three new treatment centers in 2020 and another six in 2021, adding to the five facilities it already operated. The ambitious plan sets the stage for even more growth, with projections to reach 18 to 20 facilities by 2022. The ability to expand during such a volatile period is not just luck—it’s the product of deliberate financial and operational strategies, especially Landmark’s unique approach to real estate.
Real Estate as a Strategic Advantage
Most behavioral health providers lease their facilities, but Landmark has taken a different path. The company owns nearly all of its buildings, a decision that COO Matt Boyle says provides stability and leverage. “Owning our own buildings makes banks and real estate investment trusts more open to working with us because of the financial stability that comes with owning our properties,” Boyle explained. This ownership model gives Landmark several advantages, including financial stability through real estate equity, greater flexibility in compliance and facility upgrades, and stronger partnerships with investors. In 2019, Landmark Recovery entered into a significant partnership with Sabra Health Care REIT, one of the nation’s leading health care-focused REITs. Sabra purchased two Landmark buildings in Indiana and Kentucky for $14.8 million, then leased the facilities back to Landmark. This sale-leaseback structure allowed Landmark to free up capital while maintaining operational control of its treatment centers. The partnership has since become a cornerstone of Landmark’s growth strategy, providing financial support for new facility openings and helping the company weather the disruptions caused by COVID-19.
The Role of REITs in Behavioral Health
REITs are not new to health care. They have long served as landlords for nursing homes, senior living communities, and medical office buildings. However, their involvement in behavioral health is relatively limited. Landmark’s relationship with Sabra represents one of the few significant partnerships between a behavioral health provider and a REIT. For Landmark, the arrangement provides capital for expansion and stability during uncertain times. For Sabra, it represents an opportunity to diversify into a growing sector with increasing demand. Behavioral health needs have surged over the past decade, with substance use disorders and mental health conditions affecting millions of Americans. At the same time, insurance coverage for addiction treatment has improved, making behavioral health an attractive sector for investors. REITs like Sabra see partnerships with providers like Landmark as an opportunity to invest in essential, recession-resistant services. Sabra’s CEO Rick Matros has been clear about the company’s commitment to expanding its behavioral health portfolio. Even during the pandemic, he reiterated the REIT’s strategy to grow in this sector, favoring institutional-level treatment centers over luxury retreat-style facilities.
Landmark’s Roots in Real Estate
Landmark’s embrace of real estate is not a coincidence—it’s in the company’s DNA. The Boyle family, who founded Landmark, has a long history in property development. In 1988, Clifford Boyle, father of Landmark COO Matt Boyle, founded Simsbury Associates, Inc., a real estate development company. Initially focused on rehabbing historical properties for affordable housing, Clifford later transitioned to senior housing, creating Landmark Senior Living. That background in real estate provided the foundation for Landmark Recovery’s strategy. Assisted living was profitable but capital-intensive, with high upfront costs and long turnaround times. In contrast, substance use disorder treatment facilities required lower capital outlay, offered higher margins, and provided a quicker return on investment. The Boyle family’s personal connection to recovery also played a role. With close family ties to the recovery community, including a mother in long-term recovery and a stepfather who served as president of the National Association of Addiction Treatment Providers, the move into SUD treatment was both financially and personally meaningful.
Navigating COVID-19 Challenges
Like all health care providers, Landmark had to adapt quickly to the realities of COVID-19. The company introduced new safety protocols, including enhanced cleaning, PPE use, and COVID-19 testing during intake. Despite these additional costs, demand for services remained strong. In fact, Landmark reported occupancy rates between 85% and 90% during the pandemic—well above industry averages. Costs per admission and per patient day remained 50% and 40% below industry averages, respectively. By offering all levels of care and maintaining efficient operations, Landmark stayed profitable while continuing to serve patients in need. The REIT partnership proved especially valuable during this time, providing financial support and stability as the company navigated pandemic-related delays in licensing, inspections, and zoning processes.
Looking Ahead: Growth Fueled by Partnerships
Landmark Recovery’s growth story is far from over. With three new facilities slated for 2020, six more in 2021, and long-term goals of reaching 18 to 20 facilities, the company is on a steep upward trajectory. Its partnership with Sabra is expected to continue expanding, with additional deals already in the works. The relationship offers a model for how behavioral health providers can leverage real estate partnerships to scale quickly and sustainably. As the behavioral health sector continues to attract interest from investors, Landmark Recovery stands out as an example of innovation and resilience. By combining operational excellence with strategic real estate management, the company is not only navigating the pandemic but also building a foundation for long-term growth.
Conclusion
Landmark Recovery’s ability to expand during the COVID-19 crisis highlights the importance of strategic planning and creative financing in health care. By leveraging its real estate ownership model and forming a strong partnership with Sabra Health Care REIT, Landmark has positioned itself as a leader in the behavioral health space. While many providers faced closures and setbacks, Landmark demonstrated that with the right strategy, it is possible to grow—even in the midst of a global pandemic. As demand for addiction treatment continues to rise nationwide, Landmark Recovery’s approach could serve as a blueprint for other providers seeking to balance mission-driven care with sustainable business growth.
