“During 2021, it felt like the ‘Covid-19 finish line’ kept being moved further away. I don’t think we’ll see a world without Covid-19 soon, but I think our industry is armed with the knowledge and experience to help enrich seniors’ lives better than ever.”
Brookdale Senior Living CEO Cindy Baier’s words ring true for nearly every senior living operator in the U.S. as the industry continues to deal with the lingering effects of the pandemic — and that is reflected in the sentiment of industry executives looking ahead to 2022.
While senior living leaders are optimistic that Covid-19 is on its way out, when is still an open question. In the meantime, they are remaining flexible and adaptable to weather more disruptions and surprises in 2022.
Staffing was a top industry concern in the latter half of 2021. But with Covid-19 cases in the U.S. higher than they’ve ever been, industry leaders are still wary of more disruption fueled by the rise of the omicron coronavirus variant. At the same time, given all that the industry has learned regarding infection control — and thanks to highly effective vaccines — many are also more hopeful about their prospects than they were heading into 2021.
Although they acknowledge that 2022 may not be the return to normalcy that some in the industry had hoped at the beginning of the pandemic, they are optimistic that positive occupancy momentum will carry through into the new year.
To learn more about how senior living executives are feeling heading into the new year, Senior Housing News connected with a wide swath of industry leaders. What follows is the first part of a two-part series sharing those responses:
Cindy Baier, President and CEO, Brookdale Senior Living:
With the rapid change of clinical information, new Covid-19 variants and an evolving healthcare continuum, the industry has only one piece of consistency, and that’s the importance of adapting so we can continue to provide optimal care and services for seniors.
During 2021, it felt like the “Covid-19 finish line” kept being moved further away. I don’t think we’ll see a world without Covid-19 soon, but I think our industry is armed with the knowledge and experience to help enrich seniors’ lives better than ever.
We should expect demand to increase based on the forecasted increase in the industry’s demographic population, in the years to come. This should benefit our entire industry and hopefully, take us beyond our pre-pandemic occupancy levels.
Future growth of our industry partially depends on the state of staffing. We want to focus on what we can do to retain, engage and develop the talent we currently have while attracting new candidates.
I am so encouraged by Brookdale’s high resident and associate vaccination rate, which demonstrates their commitment to taking available steps to help protect the health of themselves and others.
My top priorities will be to continue to help keep Brookdale’s residents and associates protected, solidify market confidence and implement innovative solutions that benefit our residents, families and associates.
Alan Butler, CEO, Erickson Senior Living:
The pandemic has had a profound impact on how senior living providers operate and deliver services to residents. From dining to health care, no facet of the industry has been unaffected. At Erickson Senior Living, adaptability has proven to be a key factor in our company’s ongoing recovery and growth. Since the start of the pandemic, consistently evolving to meet changing dynamics enabled us to continue moving construction projects forward without laying off any employees. As we look ahead to 2022, we are as optimistic about the future of this industry as ever.
In 2021, our confidence was rewarded with record-setting results, including the most settlements in the company’s history. Because of the enthusiasm for our product, we have committed $3 billion in capital projects over the next five years to meet the ever-growing demand for our communities. We also continue to explore new growth opportunities across the country as we seek to bring the Erickson Senior Living lifestyle to more seniors.
With much to look forward to in the coming year, challenges remain. Workforce concerns will continue to be among the most significant issues facing our industry, and many others. Attracting the best and brightest talent to work in senior living must be a top priority. After all, our product is only as good as the people who deliver it.
At Erickson Senior Living, we’re adapting to the tight labor market by examining how and where we attract new employees, and devoting resources into new hiring incentives and a successful national social media recruitment campaign. We believe in the vitality of our career opportunities and view this as the perfect time to attract top talent. Making our communities great places to live and work go hand-in-hand.
The current inflationary economic environment will be another important challenge to meet head-on in 2022. Each week, I receive letters and emails from residents and family members who share that moving to an Erickson Senior Living community was one of the best decisions of their lives. While these messages fill me with great pride, they also remind me of the incredible responsibility we have as leaders in this industry. We understand that many residents live on fixed incomes and we take seriously our responsibility to operate as efficiently as possible to deliver the highest quality at the best value for seniors. I am confident that one of our unique advantages—the ability to leverage national economies of scale—will help us navigate through this headwind of higher prices.
Despite these challenges, as we head into the new year, I am most excited to bring the Erickson Senior Living lifestyle to more seniors. My parents have lived at one of our communities for years, and my Dad always says that he feels 10 years younger since moving there. As the demographic we serve continues to grow, I am excited about the opportunity to provide that same feeling to more and more people, by developing new communities and continuing to expand our service offerings.
In that same vein, I am particularly excited about the work that we are doing to provide more holistic health and well-being programs for residents and employees. Throughout the past two years, it has become clearer than ever that having convenient access to physical, emotional, and social interaction is the ideal way to spend one’s retirement years, as opposed to being isolated at home.
Accordingly, through a partnership with Harvard University and Massachusetts General Hospital, we are dedicating a multi-million dollar investment to expand health and well-being resources to residents at all of our communities in 2022. From a new digital fitness app to enhanced amenities, residents will have greater access to tools that support resilience and overall well-being.
In addition, we will continue to expand innovative solutions such as telehealth to provide medical consultation and services to residents. This is a great example of something positive that came out of the pandemic and will continue to provide benefits as we move forward. Erickson Senior Living went from not having a formal telehealth program in 2019 to scheduling more than 68,000 appointments in 2020 and 2021. Not only did we provide residents with more convenient interaction to our on-site medical professionals, but also expanded overall coverage.
This approach to well-being extends to our dedicated professionals, who have worked harder than ever to serve residents. As we continue to welcome new team members in the coming year, it will be critical to support the well-being of all employees in mind, body and spirit, in addition to providing ongoing opportunities for meaningful career growth.
If 2020 and 2021 have taught us anything, it’s the ability to adapt. While I am proud of what we’ve accomplished, we must to continue to evolve to meet the ever-growing demand for vibrant, engaged retirement living and to be considered an employer of choice in today’s competitive marketplace. At Erickson Senior Living, we are well-positioned to take advantage of these opportunities in the year ahead and look forward to a very bright future.
Torsten Hirche, President and CEO, Transforming Age
It’s been an incredibly interesting year. We are certainly expecting the pandemic to continue to be a topic in 2022, and everything that comes with it.
While the labor market seems to be calming down a little bit, I think labor shortages and the “great resignation,” if you will, is still going on. And that presents challenges and opportunities for us. We went to a fully distributed workforce for the support team, for example, and we have been able to onboard team members who are not necessarily in Seattle or Minnesota or Nebraska where we have operations. Being able to offer that flexibility is huge.
Another pandemic-related challenge — and maybe an opportunity — that we’re looking at for 2022 is obviously inflation. It’s definitely putting a lot of cost pressures on operations, and the challenge and opportunity there is, how do we manage that? How do we become better operators in the face of increased operating expenses? What do we pass on to those we serve? I think that’s a valid discussion.
Specifically in the nonprofit space, consolidation is still a big topic, and that will continue. We just announced another affiliation here in Seattle. We are in conversation with many partners across the United States that are considering joining the Transforming Age network that we’re building. We’ve organized ourselves around housing, services, technology, philanthropy and partnerships. We’re talking with potential affiliation and M&A candidates, across all five spheres. One big opportunity for us that we’re looking at executing is integrating the housing, services and technology deeper into what we call the one-customer journey, essentially, which is about having one face to the people we serve as an organization, regardless in which operation or which affiliate they may be.
Creating a more integrated and holistic experience for the customer is the opportunity for 2022. Think of it as population health management at scale, and in a very personalized way, where we really cater to the needs, wants, dreams, hopes and plans of each of the people that we serve.
We are innovating, and creating new business models with our SHAG affiliation and DASH affiliation. We’re about to announce a new brand that we’re rolling out, a new management company. We’re putting our foot on the pedal quite a bit , and we are knee-deep in development of new affordable communities, and market-rate communities, as well. Nobody can really do this alone, and I think it will take strong partnerships to create a better experience for those we serve.
I think the key is innovation. Some people are really holding their current business model, which I think it’s great. But typically disruptors of an entire industry don’t come from the field. And so with our multi-sphere approach, we’re trying to disrupt ourselves where we can.
So, one of the key themes for 2022, like it was in 2021, is that we have not taken our foot off the gas on our strategic initiatives and innovation activities. Despite the disruption of Covid, if you stop innovating, that’s going to catch up with you pretty fast.
Jeff Fischer, President, MBK Senior Living:
We recovered about 75% of our pre-pandemic occupancy. We’re not home yet, but we’re well out in front. While others shuttered sales and advertising efforts, we kept our sales teams and marketing plans in place throughout the pandemic. I’m most proud of the response of our team. Their focus and passion for recovering have helped us outpace the industry.
We burnt through leads from pent-up demand and had three straight months of record sales in the summer – but all ships rise in a rising tide. Now that leads are leveling out back to pre-pandemic numbers, we’re ramping up sales efforts, outreach, and database management. Our goal is to achieve 100% occupancy recovery by April 2022, the end of our fiscal year.
MBK Senior Living is in a growth mode. We added two Arizona properties to our portfolio in November. We anticipate closing on two more communities in the next 90 days and have two other acquisitions in the pipeline. To some degree, it continues to be a seller’s market and harder to find deals that pencil, but we’re committed to robust growth.
We’re also exploring co-investment opportunities in development. There is a new generation of seniors on the horizon. As we move toward serving that generation, we need to be ready to answer to different needs, wants, and desires. It will call for different outlay and reimagining buildings, services, and programs.
The strain of what the world has been under is having an impact. This is the year we’re going to deal with the trauma of the pandemic. Residents and team members are frazzled. The stress and strain have not let up. We need to be cognizant of this, and stay in tune with how are team members are feeling as we do our best to forge ahead with our recovery and growth.
Restoring genuine human connections and breathing a sense of normalcy into our communities is what’s most needed. Virtual connectivity has played a vital role, but nothing substitutes face-to-face interactions and embracing loved ones without the cloud of COVID over our heads. Fear and new COVID variants seem to keep throwing speed bumps in our way, but we must be steadfast in our efforts to bring that “normalcy” to our teams.
Another significant hurdle to overcome is finding qualified workers, who want to work. We increased the MBK Senior Living talent acquisition team from three to five people, have bolstered incentives to shoulder costs that would impact our employees, and are continuously trying new ways to attract team members.
One avenue we’re taking is creating relationships with students entering college and technical programs now versus waiting for them to graduate. It’s about educating them on the benefits of working in the senior living industry, introducing them to MBK’s culture, and bringing them into the MBK family now.
This is the year we’re going to deal with the trauma of the pandemic. Residents and team members are feeling the burden of the past 18+ months. The stress and strain haven’t let up. Symptoms of anxiety and depression on the rise. We need to be cognizant of this as we push on.
Restoring genuine human connections would help considerably. But fear, a new Covid variant, and strict protocols keep that out of reach. Virtual connectivity has played a vital role, but nothing substitutes face-to-face interactions and embracing loved ones without the dark cloud of Covid over our heads.
Pre-pandemic issues we’ve wrestled with as an industry have only intensified. Take, for example, staffing. In the “great resignation” era, frontline workers are in a position to make demands – demands that may not be possible in a high-touch, 24/7 health and human service industry like ours. Since shorter workdays or weeks and working remotely isn’t possible, the onus is on us to find creative ways to attract and retain employees.
Our focus is on robust growth and more than doubling our size in the coming years. We’re aiming to grow, and the target we’re shooting for is 10,000 units.
Our cultural framework and emphasis is on Yoi Shigoto – or “the good work.” We keep it front and center to inspire our team members and care for our residents. You have to walk the talk. You can see our culture reflected in the people we have here. They genuinely believe in what we do, who we serve. There is a wonderful camaraderie here that has only grown during the pandemic. Our team leaned on each other, reached out to help when colleagues were stretched or struggling, and still stayed focused on the business at hand.
We are capitalizing on what we learned from our annual resident and team member surveys. That feedback will propel us to make what’s good great, fix what’s wrong, and help us prove to our residents and team members that we’re listening.
I’m incredibly proud of our commitment to open communications and transparency – we need and want to know how they feel. There’s always more we can do, and we’re always looking for ways to improve.
Randy Richardson, President and CEO, Vi:
We have recovered incredibly well in 2021. We’re not back to 2019, but we’re close.
Because the housing market is generally very strong almost everywhere, but certainly in the markets where we’re doing business, it has made it easy for people to make a decision to sell their home. On the independent living side of the equation, we’re north of 90% occupancy. This year was stronger than we thought it would be. The care environments are not as well occupied, with occupancy rates similar to what NIC is recording or maybe a little better.
We’ve had our share, and continue to have our share, of challenges in hiring people in different markets for different positions. We also mandated a vaccine for all of our employees back in May of this year, and set a deadline of August 1. We were a little ahead of everybody on that one. I think it was the right thing to do. But, we lost about 8% of our hourly workforce as a result of that, and we have been recovering ever since. It’s going to be a slow process, causing us to rethink how we staff and schedule work. I think those are common themes for everybody, and with respect to labor, it’s going to be a reality that will have to live with and work with for many years to come.
I saw a very interesting set of information from NIC. If you take the middle-of-the-road approach from their analysis, you’re looking at a couple years before we cycle out of [the Covid-19 pandemic.] In some sectors of the business, we have excess supply that is still trying to be absorbed. And there is more that is still in the ground that was planned a year or more ago. So, there will be more inventory that comes online, and still more absorption to take place to get to an equilibrium.
The good news is we’ve got an aging population, and there should be an increase in demand as we go forward. But I think it’s probably going to be progressive and incremental. I won’t say slow, but I think it’s just going to be steady. And it probably is going to take a couple years — we’re probably looking at 2024 before we get back to the kind of metrics that we were seeing, pre-pandemic.
Chris Hollister, CEO, Pegasus Senior Living:
Just in terms of where we are, the big thing no one foresaw was that we would have amazing scientific breakthroughs in record time that led to not just vaccines but amazingly effective vaccines — but also that there would be a simultaneous virus of dis-information that would lead tens of millions of Americans to not take the vaccine. At the same time, vaccine distribution across the globe has been woefully insufficient.
Unfortunately, these unforeseen realities almost guarantee the virus will continue to evolve and mutate into new strains for years to come. So, we will all need to learn to live with the threat of new, evolving versions of Covid-19.
At Pegasus Senior Living we made the hard choice to mandate the vaccine for all employees even though we operate across the country. We are also now well on our way to completing a booster program as well, which seems vital now to protect everyone against the new omicron variant.
In 2022, labor relations and government regulation will become greater risks. A Starbucks in upstate New York just unionized. We took PPP money, so the government will likely look to have a larger say in our affairs. The labor challenge continues to dominate all conversations. For senior living operators, a hard business has become even more challenging and that is not going to change.
Capital providers need to recognize this, and align [with] and compensate best-in-class operators appropriately. Demographics matter but can’t fill a building. A good design matters but can’t fill a building. Financial managers often suffer from thinking all problems require an analytical solution. Senior living is all about people — now more than ever. Align with the operators that are taking care of their people, otherwise you are doomed. This trumps all other considerations.
For health care and human services leaders in particular the lesson of Covid is clear: Pay your people well and do everything you can to make your community a great place to work. The alternative is ongoing worker shortages leading to ongoing agency cost variances and dissatisfied employees, residents and family members, leading directly to lower occupancy and poor financial results — that will be much greater than the cost of higher wages. We are fortunate in senior living that we are private pay – we at least have a means to demand higher prices by delivering quality care; nursing homes and other government-funded providers do not have this option.
For senior living consumers the lesson is this: If you want quality care, choose the place that is taking care of their workers, because those are the ones that will be taking care of your loved one. It’s going to cost more, but quality care is worth it.
Dale Watchowski, President and CEO, American House Senior Living Communities:
Our motto is “the comeback is greater than the setback.”
Throughout 2021, we truly embraced this motto, and our team was as resilient as ever. In 2022, our strategy will be to focus on revenue generation, manage expenses, execute on our capital improvement plans and maximize income.
We are making great progress, given we are back to pre-pandemic occupancy levels and have developed solutions that mitigate inflationary pressure. We will also continue to pursue ground up development, redevelopment and acquisitions. Six new American House developments are underway, in Bloomfield Hills, Michigan; Oak Park, Illinois; Scarborough, Maine; Jacksonville, Florida; Ann Arbor, Michigan; and Meridian Township, Michigan.
As for existing communities, we are very excited to be taking American House’s well-respected brand into Tennessee in January. This transaction will include a portfolio of 13 communities that offer assisted living and memory care services. This will give us an opportunity to further expand our platform in the Southeast, in accordance with our strategic vision, with a footprint in a state with favorable demographics. We will start 2022 with 70 communities in the American House portfolio, demonstrating strategic controlled growth.
This coming year, we are putting an emphasis on differentiating our product, and truly delivering best in class service to our residents and their families. We are driven by our mission statement, “Living Well Is Being Well,” and we put our residents’ safety, happiness, health, comfort and care at the forefront of everything we do. To me, you cannot put a price tag on this. This mission extends to our team members.
One challenge we will continue to face in 2022 is staffing. The labor shortage has affected just about every industry, and senior living has been no stranger to this. Our Chief Human Resources Officer, Mary Anderson, will continue to develop training and compensation strategies which will enable career paths for employees who want to grow within American House. Our goal is to help team members build a career path and facilitate growth in our organization. We have many long-standing employees that have seen much success and we would like to model that for all team members. Our goal is to be a support system for our front-line workers, and throughout the pandemic we have continued to keep our team members informed, raise wages, incorporate more flexible scheduling and most of all, we have created programs to keep people safe and healthy.
Jane Arthur Roslovic, Co-Founder, CEO, Treplus Communities:
The need for housing across the U.S. continues to be an issue for all ages. The active adult industry is seeing the 55+ demographic making moves to be closer to families, staying in the cities they have been in but desiring to downsize, or moving somewhere to have a new life experience. Unfortunately, construction costs and the problems with the supply chain make it a challenge for everyone to build at a speed that can handle the demand.
2022 will be a year for continued growth for Treplus Communities. We are aware of and have been impacted by the economic disruptions that are prevalent across the country. Our team has built relationships with vendors that allow us to work with the conditions to minimize delays and disruption to the best of our ability. The biggest challenges we are anticipating are related to various supply chain issues for new construction, hiring at the property management level, and continuing to educate the marketplace on the value of the active adult asset class as a rental option.
Treplus Communities will bring two projects online and start one or two additional projects in 2022. We have already encountered product shortages or rising prices in materials and had to adjust our selections and proformas accordingly. We are buying sites throughout Ohio, Indiana, and Michigan and seeing a significant increase in land acquisition costs. We are bullish and optimistic about the future while developing our 5+-year growth plan that will continue the expansion of the brand in the Midwest and Southeast.
Planning for property management is predominantly focused on hiring talent and driving resident engagement. We are looking to hire individuals who enjoy providing the types of services our discriminating resident expects. Treplus has a robust training program to educate our onsite staff to provide a superior resident experience. Like many businesses, we are having a tough time finding the right people and continue to get creative on our hiring strategy. We will continue to develop the Treplus Resident Engagement experience as a critical aspect of our product.
Active adult multifamily is a relatively new asset class. We continue to educate the influencers and the baby boomers on the advantages of the active adult lifestyle solution. It is critical to developers in the active adult space that they continue to collaborate with digital providers on the use of “55+” and “active adult” as they are terms that resonate with our target market and elevate the solution.
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