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After Rebrand from Five Star, AlerisLife Primed to Grow Lifestyle Services in 2022

AlerisLife (Nasdaq: ALR) is continuing to expand its lifestyle services offerings, and leaders with the company are optimistic that growth will continue over the near- and long-term.

The Newton, Massachusetts-based company formerly known as Five Star Senior Living rebranded last month with a new name, marking its ongoing evolution from a company that is primarily a senior living owner and operator to one that is a “more diversified and comprehensive partner.”

To achieve those goals, the company is planning to further expand its lifestyle service offerings such as its Ageility rehab and fitness business line, which is a growing source of revenue. AlerisLife is already collaborating with Compass Group on dining services and Dispatch Health to bring more acute care to residents.

“We are actively pursuing expansion of our lifestyle services and hope to announce new partnerships and our strategic events investments this year,” CEO Katie Potter said Thursday during the company’s fourth-quarter earnings call with investors and analysts.

AlerisLife is also starting 2022 with a leaner portfolio than last year, having agreed to transition 107 Five Star Senior Living communities to 10 other operators in a restructuring effort with real estate investment trust (REIT) Diversified Healthcare Trust (Nasdaq: DHC).

Now, AlerisLife’s senior living operations comprise 120 managed communities with landlord Diversified and 20 it owns, with a unit mix that is much more heavily weighted toward “lower-acuity, choice-based customers,” Potter noted.

Driving AlerisLife’s focus on new services is a belief that diversifying its senior living offerings will lead to longer and stronger relationships with customers — something Potter has noted in the past in conversations with Senior Housing News.

“We have been focused on meeting evolving customer demands and capturing both residential and lifestyle needs earlier in the customer lifecycle,” she said during Thursday’s earnings call.

AlerisLife reported a net loss of $10.7 million during the fourth quarter of 2021, which included $2.3 million of expenses in conjunction with the DHC restructuring.

Average occupancy in the company’s senior living portfolio hit nearly 73% at the end of December, an increase of 210 basis points over the company’s third-quarter occupancy. Average occupancy for the company’s managed portfolio increased 150 basis points from the third quarter of 2021, landing at 75.2% as of the end of 4Q.

AlerisLife’s share value dipped nearly 4.8%, landing at $2.59 by the time the markets closed Thursday.

‘Significant potential’

One offering that exemplifies AlerisLife’s lifestyle services strategy is its Ageility service line, which has steadily driven revenue growth and operational results for the company and makes up the bulk of the company’s services in that segment.

During the fourth quarter of 2021, AlerisLife’s fitness revenues increased to $3.3 million, representing a 38.1% increase over the same period in 2020. On the whole, revenue for the company’s lifestyle services segment revenues increased 1.6% from the third quarter,

The company has opened outpatient rehabilitation clinics at a five-year compound annual growth rate of 22%. The company’s leaders also noted that their data shows a 36% reduction in the rate of resident falls and a 31% increase in length of stay when an outpatient clinic is added to a community.

“With minimal investment [of about $20,000 to $30,000] required in opening new clinics and a market share of under 1% of the estimated market opportunity for this service, we believe there is significant potential to continue growing this business,” Potter said.

Total outpatient rehabilitation visits in the fourth quarter of 2021 hit about 148,000, an approximately 4% gain over the company’s pandemic lows.

Looking ahead, Five Star is looking to grow its service line offerings inside and outside of the communities it manages. For example, the company is looking to grow its offerings in the home care sector.

“As we grow and expand the segments, we expect to add additional lines of business operated through new and existing brands representing a diverse offering of services to support older adults as they age,” Potter said.

The post After Rebrand from Five Star, AlerisLife Primed to Grow Lifestyle Services in 2022 appeared first on Senior Housing News.

Source: For the full article please visit Senior Housing News

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