After Rebranding from JEA and Big Growth Year, Sinceri CEO Charts New Course

Sinceri Senior Living has had a big year in 2021.

The Vancouver, Washington-based operator in September changed its name from JEA Senior Living to reflect a new and growing focus on product types beyond memory care. At the same time, the company is expanding at a rapid pace, most recently by taking over 21 properties managed by soon-to-close Eclipse Senior Living for landlord Ventas (NYSE: VTR).

This all fits into Sinceri CEO Chris Belford’s plan to remake Sinceri into a mid-sized senior living player focused on a few regions throughout the U.S. Earlier this fall, he shared with Senior Housing News plans to double the company’s portfolio size in 2021 to around 80 communities. And in a more recent interview, he said that the plan is moving full steam ahead.

“One of the first things that I did as CEO was expand our corporate overhead. I really grew it beyond what is normal for a company of the size we were in January and February,” Belford said on SHN podcast Transform.

Belford came to Sinceri in 2020 after about four years working as executive vice president of asset management for another real estate investment trust (REIT), American Healthcare Investors. And he said having that experience helps him ensure that Sinceri aligns its goals and values with the company’s ownership and capital partners when taking on new management contracts.

“Coming out of the REIT … puts me in kind of a unique position where I’m able to talk the language, understand what their needs are and then develop the platform of Sinceri Senior Living to meet those needs,” Belford said.

Highlights of Belford’s podcast interview are below, edited for length and clarity. Subscribe to Transform via Apple Podcasts and SoundCloud. The interview took place in late October.

On the operator’s recent rebrand to Sinceri Senior Living and choice to move beyond memory care:

JEA Senior Living has been around for 30 years, and the legacy of JEA continues even with Sinceri Senior Living.

The repositioning is intended to get more in line with other senior housing operators. JEA was obviously an acronym for Jerry Irwin and Associates, and back in October of 2019, Access Industries purchased JEA Senior Living, and Jerry Irwin decided to retire. So, it was actually a great opportunity for us to reposition the company. [We have] a new name, new logo and new excitement around Sinceri Senior Living.

JEA Senior Living was mostly known for freestanding memory care units. And they were certainly very good at it. It’s still foundational for us, we still have a lot of free standing memory care [communities]. And it is a product line that we certainly like and enjoy and do very well with and it has created our Meaningful Moments program.

When I came on board and we started to think about the future of Sinceri Senior Living, we started talking about, why not go into other product lines? Why not talk about assisted living and independent living? There’s more opportunity for us to expand our services into those other product lines, and that was really the reason why we thought repositioning ourselves with a new name change … made a lot more sense.

Plus, I have pretty much dabbled in every level of care in senior housing, which includes SNF through mental health through independent assisted living memory care. So, I think Access was certainly receptive to going into these other product lines.

On senior living demand as of the end of October:

We continue to see increasing demand.

There was understandably some apprehension from folks who needed our services in assisted living and memory care, who were a little bit apprehensive of congregate living and [opted] to stay at home. I continued to see the industry rebounding in Q1 and Q2 and certainly, and we see the same trend lines as they do.

We continued to see that pick up through August, September and October. We’re starting to see a lot more inquiry, a lot more interest in it. So my view is that the apprehension that folks have had is starting to subside a bit. Certainly as an industry and at Sinceri Senior Living, we learned a lot in the pandemic regarding how to protect residents and how to enhance infection control and practices.

I mean, there has been a lot of good experience in that. But I really do see the industry as a whole kind of turning the corner on the pandemic. We will continue to see the demand pick up, in my view. We haven’t seen any evidence where demand is going to be subsiding for any varying reasons.

So, I think we’re doing a good job as an industry, I think we’re doing a great job as a company, on keeping Covid out of our communities. The flu is going to be something that we’re focused on, as well. But with the lessons learned from the Covid experience and in infection control, I think that we could reduce any kind of flu exposure that we typically see in the winter months.

On adapting memory care programming for IL/AL residents:

Meaningful Moments was created for a higher-acuity resident, a resident with Alzheimer’s or dementia. But what we do recognize is that there are a lot of residents who actually live in independent or assisted living who are beginning to suffer from memory loss and beginning to suffer from some form of Alzheimer’s and dementia. They may be able to function very well, but we estimate that probably 80% of the population within the communities on the assisted living side probably have some form of cognitive impairment or are starting to have some cognitive impairment.

So we took what we had as far as Meaningful Moments, and we really synthesized some of the more high-acuity components of the program … and in the end brought them into the assisted living side. It all revolves around activities and things that residents are very passionate about doing. There is some remembering of their lives that they’ve gone through and talking about their family and all those type things.

We’re also looking at adapting some of the technology that we use for Meaningful Moments for our program in assisted living. A good example of that would be Sagely, which is a computer communication program that we use in our memory care. It is helpful for family members to get in contact with residents. We’re starting to adopt that in our assisted living, and we’re starting to see some really good usage of that type of technology in our communities.

On how Sinceri is scaling up:

We just did a management deal with Ventas for … an eight-community portfolio in Wisconsin. We assumed those buildings back in the beginning of October, which is great. We have a number of other portfolios that we’re working through with various equity partners as well. November or December is what our expected transition date is. (Ed. note: Sinceri was revealed to be taking on 21 former Eclipse communities for Ventas subsequent to this interview taking place.)

Transitions are not easy. But what we see is a lot of good opportunities for Sinceri Senior Living to enhance and create value in those communities as we go forward. The team is working extremely hard. I could not be more proud of the Sinceri team and what they’ve been able to do. It’s been all hands on deck as we go through and start to transition portfolios. We’ll have press releases for November and December as those portfolios begin to transition over to us, certainly, but we’re excited to grow our family, and we’re excited to take care of more residents in new areas and new geographies in the United States.

We knew we were going to grow at the beginning of the year. One of the first things that I did as CEO was expand our corporate overhead. I really grew it beyond what is normal for a company of the size we were in January and February. Talent acquisition was the key element in our expansion. I was able to grow our team that have both experience in not only freestanding memory care, but also the other product lines that we had just talked about, assisted living memory care.

So, preparing the groundwork at the beginning when I first started is helping us transition those buildings as we go. And then before talent acquisition, it’s key to … take a look at our current systems, [and say] let’s improve those systems as if we were at 100 communities. So, we did a lot of groundwork prior to the transition in order to get us to where we’re at today. Once the ship has sailed, you can’t build the ship.

Our footprint is West Coast, Midwest and East Coast. Operators traditionally want to find efficiencies in their operations. They’re trying to make a margin just like everybody else is. So, what we’re trying to do is grow within our footprint. The portfolios that we have under contract, we’re growing into new states that we’ve never been in before.

If you’re trying to be too efficient as an operator — in other words you’re trying to squeeze margins — typically, what you do is you increase your regional size and your regionals are going from maybe eight buildings to 15 buildings, and you don’t really develop a lot of quality there. It’s really hard for one person to really run a 15-community portfolio and do it really well. So at Sinceri, we’ve reduced that intentionally and we base it on … the complexity of the community itself, the size of the community, as well as the geographic spread of those communities.

What we’re trying to do is trying to be much more efficient in the regional sizes that we have. Those geographic areas that are outside of our current footprint, we can develop a regional size small enough to handle the complexity of various states that we’re not used to working in.

We did an acquisition in the Carolinas, so we’re in North and South Carolina. We’re certainly looking at opportunities where we can buy portfolios, and that is what we’re mostly interested in, not one-off buildings unless it’s complimentary to our current regional structure and we see some value opportunity there. We’re definitely looking at both some management opportunities, maybe some management joint ventures and RIDEA joint ventures. As long as it fits within our footprint, and it’s portfolios of decent size, we’re certainly interested in acquisitions.

On how Belford’s operations and REIT experience gives him a unique perspective:

Before I went to the REIT, I would have said that I knew everything I needed to know. Going to the REIT, I discovered that I didn’t know anything I should have known.

The REIT experience was pretty valuable for me. The language is a little different from a REIT to an operator, as are the needs and the services that they need. It’s fairly complex. They’re doing just what any other investor would do — they’re trying to create value with the assets they have, and they have demands on paying dividends if they’re a dividend fund.

What they need are valuable operators. They need operators that understand the language, understand what their needs are, and fulfill those needs. Coming out of the REIT, and … learning what a good operator looks like, versus maybe not such a good operator, and really understanding the language and their needs puts me in a kind of a unique position where I’m able to talk the language, understand what their needs are and then develop the platform of Sinceri Senior Living to meet those needs, meet the value creation that they’re seeking.

Going forward, I think the REITs’ desires are the same, but the industry is changing a little bit. We’ve been doing this for a couple of years where operators don’t necessarily want to take triple-net leases, for example. Covid has had a big impact on REITs, so the value of good operators is really that much more desirable than just going out buying an asset for an operator and hoping that they can create the value.

We’re probably going to start to see much more activity from the REITs on the operators to manage them appropriately so that they can fulfill their needs. I think the more the merrier, and the more insight that REITs can provide operators as to what their needs are and how to run best practices, I think it’s a good thing for the industry.

On recruiting and retaining workers amid a historic staffing crunch:

We actually designated recruiters in various geographic areas that specialize in that.

Typically, in the old world — I should say, probably two years ago — you had given it to the community teams to do their own recruiting with maybe some HR support. What we found is developing areas of recruitment in geographic areas, particularly where we’re condensed, is probably the better idea. So having a sole recruiter who helps get the staff engaged in the building for interviews, doing some preliminary interviews, passing the resume on to the community, making sure that they do that; that helped us.

We’re starting to see employees needing a lot more flexibility in their scheduling. So what it means is that they may only want to work four hours a day, they may only want to work two hours a day. So maybe what we do is we hire a pool of PRN staffing to cover those shifts. We also have developed daily pay, where if an employee requests they get paid at the end of their shift, we can do that as well, thanks to some of our program or payroll vendors that are able to do that.

The entire industry sees staffing as a major, major issue, and it is definitely one of those obstacles that we’re just going to need to overcome.

I’m always of the philosophy that whatever the problem is, no matter how complex the solution is, however nebulous it may seem, there is a solution out there. And I think we have a tendency to work in traditional manners with things that worked in the past, and never evolving to new solutions.

I really feel that as an industry … we need to find the answer to staffing issues, and change that norm because eventually, you are not going to be able to charge residents enough to cover some of the agency usage, the overtime usage, the staffing wage issues — and certainly there’s a lot of that.

We’re focused 100% of the time on making sure that … we’re creating a new opportunity for staff and employees who haven’t thought about working into the industry. We have the Granger Cobb Institute, for example, that will train leaders. I’m a proud member of that subcommittee with the Granger Cobb Institute. I actually worked with Granger Cobb, so I’m very proud to be a member of that. And again, the solutions for employees are out there.

On the future of both the senior living industry and Sinceri Senior Living:

I’m hoping within the next six to eight months, if we deploy best practices, that we can resolve some of the staffing issues. I tour communities all the time, I talk to caregivers all the time, and the reason they come to work every day is not just a paycheck, it is really that resident relationship that they love. And if we as an industry, and we as Sinceri Senior Living begin to enhance that, start to demonstrate that and are able to communicate that out to those potential employees, I think we’ve got some really good opportunities to change the dynamic that we’re currently in with this staffing crunch within the next six months.

[At Sinceri,] we’ll continue to grow. We’re looking at opportunities. As I’ve talked about in the past, we’re optimists, and we’re opportunistic in what we see in the future. We do continue to see opportunity and growth in our current size and complexity. We also see maybe some opportunities, some ancillary businesses that we may want to dabble in. And before we get into pharmacy or rehab, we certainly see home health as an opportunity as well. So [we are] starting to look at other varying product lines that serve our communities as a great opportunity for us. That’s what we’ll see in 2022.

We also talk about, from an investment standpoint, that the demographic is eventually going to catch up to us. We’re going to probably start to see that turn. Maybe not in 2022, but in ‘23, ‘24, we’ll start to see more and more demand for our services.

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