Three senior living industry veterans have launched a new management company aimed in part at community turnarounds, and at meeting the oncoming wave of middle-market demand.
The company, Trinity Senior Management, officially launched earlier in August with a goal to specialize in building “self-sustaining” independent living, assisted living and memory care communities. Like other operators in that space, the company aims to do that through improving community culture, staff training, margins and revenue, according to CEO John Gonzales.
“Owners … because of the pandemic, they’re in some serious trouble. Their expenses are out of whack, their occupancy has taken a hit,” he said. “We’re able to go in there and help them and get the occupancy back up.”
The company does not plan to manage communities long-term. In fact, Gonzales said that “we don’t want to be your third party operator in five years.”
The new operator is also taking a particular focus on middle-market communites, which Gonzales noted is among the industry’s biggest opportunities ahead.
“If you’re a smaller operator in this business catering to and serving this middle market, where are you going to go?” he said. “The end goal, again, is to create the self-sustaining ecosystem so we can get out of the picture.”
The company is taking a unique approach to third-party operations that Gonzales said was relatively uncommon among operators like Trinity Senior Management. Under the model, the operator will work alongside communities — many of them belonging to small ownership groups — to help overhaul their operations.
Typically, management companies will charge 5 to 7% of gross revenue as fees, which Gonzales said was “untenable for the smaller middle market-owners.” To keep its overhead costs low, the company employs independent contractors instead of growing its own company payroll. That, in turn, gives communities on a razor-thin margin “an easier starting point.”
“Instead of our adding to their overhead for a long period — sometimes in perpetuity — we set out to give them the tools they need to manage themselves,” Gonzales said. “We then train, implement systems, policies, improve performance all while using our independent contractors, who are stringently vetted and veterans who are wanting to make a difference in our industry.”
Independent contractors also stand to get a percentage of the management fees, “so we all get in the same boat and are all incentivized to improve and maintain optimal performance,” he added.
Once the community is up and running, Gonzales said its owner has several options, ranging from keeping Trinity Senior Management on as a manager or consultant, maintaining the independent contractor role “who now becomes a management company in their own right,” or outright hiring that person on as an employee.
Gonzales is no stranger to the senior living industry. Before launching Trinity Senior Management, he worked as president and senior vice president of consulting for operator Haven Senior Living. He also previously was president and principal owner of SDG Senior Living.
Joining him are two co-founders, Chris Kincaid, who, like Gonzales, has operational experience in a variety of roles across the industry; and Linda Townsend, who Gonzales described as Trinity’s “marketing guru.”
Though the company is still in its early stages, Gonzales said it has already secured third-party operating contracts for three communities in the Pacific Northwest, with more soon to come.
As of this week, Trinity had secured management contracts with a community in Spokane, and Wilbur, Washington; and Pendleton, Oregon. Trinity is also involved in a contract to manage a forthcoming community from a California-based developer, and the company is in the final stages of negotiations for at least one community in Georgia.
Gonzales noted that while “anyone can learn the nuts and bolts of this business,” it is harder to create a self-sustaining operational model. But with Trinity’s help, he aims to help communities “ride on their own.”
The company’s top priority is building a better community culture, which often starts at the top. For example, the company overhauled leadership when it came into its Pendelton, Oregon-based community.
Community size isn’t a focus for Trinity, as it doesn’t matter “whether the building has 25-30 units or it has 180 units,” said Gonzales. In addition to management contracts for existing underperforming or distressed communities, Trinity Senior Management also will evaluate opportunities to partner on new developments.
With a cluster of partners in the Pacific Northwest, a contract in California and interest in the deep South, Trinity’s reach is already nationwide. Gonzales imagines Trinity as a hub, with those regional clusters will be the spokes.
Gonzales understands that not everyone out there will share Trinity Senior Management’s vision for the middle market.
“But, if we find someone that does align with that vision, it doesn’t matter if they have a 25-unit … or if they are building 180 units from scratch, we can work with all of them,” said Gonzales.
As the middle market grows, so too does the need for a large-scale change in senior living, and Gonzales said that he has yet to see another operator tackle the middle market in a big, issue-solving way.
The post Senior Living Veterans Launch Operating Company Focused on Middle-Market, Turnarounds appeared first on Senior Housing News.