Your Attendance was Key - Late Winter Conference CONFERENCE RECAP
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Your Attendance was Key.
CONFERENCE RECAP
The 16th Annual HJ Sims
Late Winter Conference
Sheraton Sand Key Resort
Clearwater Beach, FL
Tuesday, February 26 – Thursday, February 28, 2019
Member FINRA,SIPC
Table of Contents 2019 Conference Review...................................................................................................................... 1 CFO Breakfast....................................................................................................................................... 2 The Senior Living Industry and Capital Markets: Today and Tomorrow........................................... 4 The Latest Digital Asset: Blockchain Technology .............................................................................. 6 Workforce Trends, Retention Strategies & the Millennials Factor.................................................... 8 Partnerships in Mixed Use Development..........................................................................................10 New Ways at Looking at Growth and Redevelopment................................................................... 14 The Future of the Continuum of Care................................................................................................17 The Science of Revenue Management and How It Can Be Applied To Senior Living................... 19 Let’s Hear from the Leaders.............................................................................................................. 21 Insights into Today’s Financial Markets............................................................................................ 23 Event & Recreational Activities......................................................................................................... 25 Save the Dates.................................................................................................................................... 26 2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM
2019 Conference Review
During the past sixteen years, HJ Program highlights included:
Sims has hosted its Annual Late
■■Researchers from outside the
Winter Conference as a forum to
senior living industry who shared
gather experts from across the
valuable ideas from fields like
Senior Living industry. This year,
block-chain technology, revenue
more than 300 operators and
management, and financial
other professionals convened at
markets. These speakers pressed
the Sheraton Sand Key Resort in
attendees to consider how recent
beautiful Clearwater Beach, FL for a
innovations and approaches may
discussion of thoughts, experiences,
be applicable to their organizations.
and concerns from February 26
to February 28. Throughout the ■■Informal events to bolster
conference, attendees explored connection and conversation,
recurring themes like the changing including a session about how our
landscape of workforce engagement, palate for wine evolves as we age.
unique opportunities for revenue and
■■Educational sessions that covered
mission advancement, and continued
topics, such as: workforce trends,
development of the new payer model.
partnerships in mixed-use
“Amidst upheaval in the nursing home development, new ways of looking
industry, and potential overbuilding of at growth and development, and
independent and assisted the future of the continuum of care.
living and memory
The following pages
care communities, our
provide comprehensive
conference provided
coverage of the many
attendees from the non-
sessions at the 2019 Sims
profit and proprietary
Late Winter Conference.
sectors of the senior
Be sure to subscribe to
living industry with an
our HJ Sims mailing
environment to share their recipes for success,” said
list for information on
Bill Sims, Managing Principal. “With the backdrop of
forthcoming conferences.
one of the best beaches
in the U.S., conference
participants greatly
contributed to making this
one of the best programs
we have ever hosted.”
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 1
CFO Breakfast
This year’s CFO breakfast conducted by CliftonLarsonAllen
featured an overview of found that a vast majority of
change within the senior surveyed seniors would prefer
living Industry. Gail Miller, of to stay in their residence (80%),
CliftonLarsonAllen, provided while only 3% indicated they
insight on some of the major would prefer to move to a
trends she is witnessing retirement community. Aging-in-
across the industry. Key place is becoming increasingly
takeaways included: for the first time in U.S. history. viable due to affordable
Additionally, the 2030s will see technology, Internet access,
Demographic Growth declining caregiver ratios. In transportation alternatives,
The 2030s are projected to be a 2010, the caregiver support ratio delayed transition through
transformative decade. By 2030, was more than seven potential the continuum, and expanded
all Baby Boomers will be older caregivers for every person in the offerings. Other trends include
than age 65, and one in every high-risk age years of age 80-plus. senior living options without
five residents in the U.S. will be In 2030, the ratio is projected nursing living care, assisted
retirement age. The population to decline to four to one and is living serving higher acuity, and
in the U.S. is projected to expected to fall further to less a preference to maintain one’s
grow at a slower pace and age than three to one in 2050. current environment.
considerably, which will result in
seniors outnumbering children Senior Living Options Occupancy and
As we look Construction Trends
toward the Independent living occupancy as
coming “Silver of 4Q 2018 was 90.2% with 2018
Tsunami,” showing moderate inventory
Boomers growth and absorption. Assisted
are expected living occupancy as of 4Q 2018
to demand was 85.4% with net inventory
customization, growth and absorption reaching
flexibility and the highest level on record. The
choices. Aging- skilled nursing sector continues
in-place is to see reduced occupancy in
a trend that all regions of the U.S., and the
is becoming overall occupancy median is now
increasingly 83.9%. The industry also saw
important to construction starts trending lower,
seniors. A suggesting the construction
research study pipeline may be slowing.
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 2
Workforce Pressures enrollment. The transition of Baby (CMS)
Workforce trends in the senior Boomers, coupled with enhanced largest VBP
living industry include a required benefits, at lower overall costs initiative. It is
focus on recruitment and to beneficiaries, has made MA worth noting that four in five MA
retention as demand for talent attractive to this generation. For enrollees are in plans that require
continues to increase as well context purposes, Accountable some form of pre-authorization.
as an evolution in workforce Care Organizations, which are Most enrollees are required to
demographics. It is no surprise Medicare’s #1 value-based receive pre-authorization for
that the senior living market is purchasing (VBP) model have 10 high- cost services (like Skilled
growing and senior living job million beneficiaries participating Nursing). According to a 2018
growth outpaced the private in all versions, including non-risk study by the Kaiser Family
sector between 2006 and 2016. bearing. This equates to 17% of all Foundation, 71% require pre-
authorization for a Skilled Nursing
Facility stay, compared to 62%
for Home Health services, and
12% for preventative services.
The narrowing health networks
will result in “haves” and “have
nots.” This means the liaison role
is critical in navigating Medicare
Advantage relationships and the
ability to “tell your story” will
be key as referrals move to high
quality, low cost providers.
Job openings in health care and Medicare beneficiaries. Compared For more information on
social assistance continue to rise, to the 20+ million Medicare this session, please contact
topping 1.1 million in June 2017. beneficiaries enrolled in MA Christina Rappl.
The senior living industry will plans, it is double that of Centers
need to recruit and retain 300,000 for Medicare & Medicaid Services’
more employees in the next ten
years, while the labor force that is
comprised of 16-24 year olds will
see a 2.8 million decline.
Medicare Advantage
Medicare Advantage (MA)
enrollment has grown by more
than 70% since the passage of
the Affordable Care Act (ACA) to
just over 20 million beneficiaries,
or 34% of total Medicare
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 3
The Senior Living Industry and
Capital Markets: Today and Tomorrow
Each year, we begin the present for providers with sufficient
HJ Sims Conference with infrastructure and scale.
an overview of senior
living industry and capital Turning to capital markets, Bill,
market trends, as well as who last year believed “everything
an update on the latest points to higher interest rates,”
from HJ Sims. In addition noted that with the results of
to financing more than the mid-term elections and
$1B in 2018, adding 20 expectations of economic growth,
new employees, and interest rates have actually fallen
welcoming baby Lucas since last year’s conference. Bill was
Rappl to the investment hardly alone in his assumptions;
banking family, we also of hundreds of predictions from
launched our Corporate our 2018 conference, the closest
Social Responsibility to actual was just the third lowest
(CSR) program. For interest rate.
CSR’s inception year, our
organization was honored Aaron Rulnick, Managing Principal
to partner with Gift of Life, who was on site to and Co-head of Investment
educate attendees about their work to cure blood Banking, highlighted a number of
cancer through marrow and stem cell donation. unique non-profit financings that
More than 30 attendees chose to enter the registry HJ Sims was proud to complete
with a swab of the cheek. in 2018. As expansion and new
developments predominated
Bill Sims, HJ Sims capital needs in the wake of tax
Managing Principal, reform and the elimination of
highlighted current senior advanced refundings, HJ Sims
living industry trends and crafted a number of innovative
implications for providers. short-term debt structures and secured shorter call
Firstly, increased research periods. Most notably, these innovative structures
on loneliness (not to included the utilization of subordinate entrance
mention the first UK fee bonds to maximize the ability to deleverage,
Minister of Loneliness) while meeting loan to value requirements. Another
could lead to increased inventive structure helped clients to preserve future
market penetration as the benefits of community entrance fees in order to pay down outstanding
become more known. With continued revolution debt, instead of the new related debt, as the older
of the nursing home sub-sector, opportunities are outstanding debt carried a higher coupon.
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 4
In instances of refinancing and expansion alike, we Rounding out our executive
saw an increase in the utilization of taxable bank panel, Anthony Luzzi,
debt. With the benefit of declining tax-exempt bank President of Sims Mortgage
rates (owing to the lower corporate tax rate), the Funding (SMF), updated the audience on the HUD
ability to quickly secure a taxable loan was appealing, happenings of the past
especially in instances of short-term capital needs. year. While 2018 multi-
family and health care loan
Jeff Sands, Managing production was generally
Principal and Co-head in line with that of 2017,
of Investment Banking, the recent partial Federal
explained the anatomy of government shutdown
our HJ Sims Investment temporarily slowed down
(HJSI) deals, highlighting the review and closing of
how the structure applications.
is typically used by
proprietary senior living In 2018, SMF) closed loans across all three HUD
providers relevant to non- mortgage insurance platforms: LEAN for Healthcare,
profit borrowers in a variety of situations. Please Multi-family Accelerated Processing, and Office of
email Rebecca Brady for a copy of our forthcoming Hospital Facilities. The SMF team established new
white paper. and expanded partnerships with bridge lenders and
expanded its financial advisory
Anatomy of HJSI Financings practice throughout the year.
For more information on
this session, please contact
Kerry Moynihan.
In the context of some of the key financings and
transactions HJ Sims completed this past year, Jeff
shared ongoing trends in the industry and how some
operator and capital providers are responding. These
included: nursing home consolidation and divestiture
by REITS, more affordable communities with 25%
Medicaid waiver, and increased participation by
private equity funds.
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 5
The Latest Digital Asset:
Blockchain Technology
This year’s conference
featured keynote
speaker, Manual
Stagars. Stagars,
who resides in Zurich,
Switzerland, spoke
about the latest digital
asset, blockchain
technology. An award-
winning documentary
filmmaker and an expert in blockchain technology,
artificial intelligence, and Fintech, Stagars
also serves as host of a blockchain podcast.
Stagars has authored numerous books about
entrepreneurship, financial innovation, Open Data,
and impact investment. Stagars speaks frequently,
around the globe, illuminating audiences about
blockchain technology.
What is blockchain technology (blockchain)? In
a nutshell, a blockchain is a distributed digital
ledger with transactions in sequence. Blockchain
is a growing list of records or blocks, which are
linked using cryptography. By design, a blockchain
is resistant to modification of the data it contains.
It is an open, distributed ledger that efficiently
records transactions between two parties in a
verifiable and permanent manner.
A blockchain is typically managed by a peer-
to-peer network, whom collectively adhere to
a protocol for inter-node communication and
validation of new blocks. Once recorded, the data blockchain records are not unalterable, blockchains
in any given block cannot be altered retroactively are considered secure by design. The most well-
without modification of all subsequent blocks, which known use of blockchain technology is by the crypto
requires consensus of the network majority. Although currency Bitcoin.
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 6
Where is current research occurring? Below is a
classification of seven blockchain dimensions by
researcher Roger Wattenhofer:
These are the dimensions that blockchains enable In closing, Stagars offered the following advice
and on which research is happening. The farther out to those considering the utilization of blockchain
one travels down technology:
each arrow, the more
■■It takes time to understand this technology;
advanced a system
take several months to read and research.
becomes. According
to Stagars, most ■■There is a great deal of “hot air”
companies do not surrounding this technology; learn to ask
follow this example; the right questions.
rather, they focus on
■■When you decide to try the technology,
a few dimensions
be mindful of controlling risk. As the
and neglect the
technology is still in the inception
remainder; thus,
phase, even experts are in a constant
compromising the
learning cycle.
integrity of the
blockchain.
For more information on this session,
please contact Jimmy Rester.
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 7
Workforce Trends, Retention
Strategies & the Millennial Factor
Recent surveys of senior living Nursing (ASN) for $1,000 tuition. Given the caregiver labor
executives have confirmed that For community students, the shortage, recruiting employees
labor issues continue to be a tuition can be funded with no- is just as challenging as
dominant challenge in the senior interest loans provided by a retaining employees. Ms. Rickert
living industry. Industry experts local agency, Jewish Free Loans. discussed the use of technology
Yvonne Rickert, Senior Director For LAJH staff members who for recruiting efforts. Rickert
of Human Resources at Life Care seek ASN admission, if after highlighted the benefits of
Services (LCS), and Molly Forrest, certification/licensure they choose leveraging digital job listings
CEO and President of the Los to work at the LAJH, 25% of and social media presence
Angeles Jewish Home (LAJH), the loan is forgiven for every (LinkedIn), including an increase
discussed the unique approaches six months they stay with the in the quantity and quality of
their organizations employ to organization. Another proven applications and total outreach,
compete for and retain talent in a retention method for the LAJH especially candidates whom
tight labor market, including how is a training program focused on rely on the Internet for their
these approaches have changed teaching front-line staff members job search. Rickert talked about
throughout the last few years. the skills needed to advance the way in which data gathered
in the workplace, particularly from those sites can improve
While turnover levels can vary employees with language and/or employee recruitment.
by employee type, both panelists math challenges. Specifically, the
discussed the high levels of LAJH created a program through Rickert addressed the key
turnover at the caregiver and which an employee can complete factors LCS focuses on when
front-line positions, which English and/or math classes (or hiring employees: personality,
can be 50%-75% for for-profit earn a GED) via a local adult intelligence, experience and heart
companies, and 30%-35% for educational program. For every (the latter being, particularly
non-profit organizations. Ms. six hours of LAJH University important for caregivers). She
Forrest explained how the Jewish classes (above the federal/ explained that the facility tour
Home has been able to maintain state minimum requirement is important in evaluating these
an 11% turnover rate through a of 12 annual hours), the LAJH factors; much can be gleaned
combination of creative solutions. employee receives a twenty- from observing how a candidate
One example included offering five cent increase in pay (to be interacts with residents and
Certified Nursing Assistant (CNA) applied the year following the staff members. For example,
classes to the public through annual evaluation). does the candidate smile at a
LAJH’s Annenberg School of resident when they meet? In LCS’
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 8experience, these characteristics Wage compensation is generally partnering
cannot be accurately measured a short-term satisfier, though with
by personality assessments; the paying a sufficient living wage educational
tests did not draw a correlation is important. Employees may institutions to provide students
between scores and success. leave for a wage increase or an with direct, real-world experience,
Instead, Rickert recommends advancement, but if a workplace as well as financial assistance and
involving the best employees boasts a positive culture, that scholarships for college students
in the recruitment process in employee may return, if you leave to pursue studies that prepare
order to hire others with similar the door open for them. them for a career in senior living.
characteristics.
With employee engagement a Forrest provided insight on
Both panelists noted that with key to success, Forrest revealed the ways in which LAJH is
four to five generations working that LAJH engages employees partnering with local universities
in communities, there is not a through the Chai-way to Health to develop the next generation
single formula to retaining top wellness program. The program of senior living leaders. She also
talent as people from different provides a way for employees highlighted the success of their
age groups tend to stay in a to publicly recognize the good Annerberg School of Nursing,
position for different reasons. acts of their colleagues, and which educates and trains
A community’s ability to adapt empower staff to help improve students to become qualified
to their workers and provide the organization by seeking their health care practitioners, whom
multiple avenues for retention advice in key decisions like the will, in the course of their careers,
is key to reducing turnover. For selection of a health care plan. meet the needs of a culturally
example, Rickert noted that 75% diverse society in its continuum
of Generation Z believes they Both Rickert and Forrest agree of illness-wellness.
can be entrepreneurs and when that the industry faces a long-
deciding where to stay long term challenge of attracting the For more information on
term, they may value career highly skilled workers whom are this session, please contact
advancement over other factors needed to take care of an ever- Curtis King.
that might be more important to increasing senior population.
other age groups. Rickert expounded about the
ways in which the LCS Foundation
With that said, regardless of age, is discovering a solution to
both panelists agree that money this challenge by providing
is not the most important factor opportunities to high school
and employee engagement is key. and college students, including
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 9Partnerships in Mixed
Use Development
The focus of this session was to provide different William (Bill) Pettit, Jr., President and Chief Operating
perspectives on the intersection of mixed use Officer of Merrill Gardens kicked off the discussion by
development and senior living communities. highlighting his organization’s experience in driving
Following on the 2018 HJ Sims Conference theme of successful mixed use developments. In reviewing
growth in demand by the Baby Boomer generation a survey conducted by A Place for Mom, 85% of
for downtown communities, this session gathered independent living consumers, and 66% of assisted
leaders from the for-profit and non-profit senior living living consumers, place importance on being within
communities, as well as a well-known mixed-use walking distance of at least one major neighborhood
developer evaluating the inclusion of senior living amenity, with a significant percentage of each
communities in its developments. demographic indicating that this was a “must have”
in making their decision on where to live.
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 10The first community presented by Mr. Pettit was Merrill Gardens has repeated
University Village, located in downtown Seattle. The these town center successes
community sits upon a 2.5 acre site that is comprised elsewhere in Washington
of 123 dually-licensed independent living/assisted and California, creating senior living communities
living apartments and 103 market-rate apartments adjacent to town amenities, allowing their residents
with 22,500 square feet of retail space. The total to be within walking distance of at least one
development cost was $70 million with $55 million major neighborhood amenity. As a result, they
financed with tax-exempt financing. The senior living have achieved rapid fill-up of new projects and
apartments frame one side of the site, while the retail stabilized occupancy earlier than may otherwise
space and market-rate apartments are on the other have been achievable. They believe that town
side of the site; a common courtyard is positioned center development represents an important new
between the buildings. Mr. Pettit mentioned that the opportunity for senior housing. Though it can take
mixture of senior living and market-rate apartments more time and potentially increase costs, there are a
encourages intergenerational interaction – including limited number of opportunities in a particular town
students of the nearby University of Washington creating natural barriers to entry. The popularity of
either visiting grandparents or creating friendships these communities reflect the shifting preferences of
with residents of the Merrill Gardens community. today’s seniors who seek to be more connected to
Residents and students share meals, and the happy their surroundings.
hour at Merrill Gardens was frequented by residents
of the market-rate apartment buildings. Bill Hagstrom, Vice President of Senior Housing
Partners, the development arm of Presbyterian
Another highlighted project was Merrill Gardens Homes & Services, walked through a case study
at Burien, a bustling, growing town that boasts of their Folkestone Community, located on the
a number of prominent companies with national shores of Lake Minnetonka in Wayzata, MN. While
headquarters within 10 to 15 minutes of the Senior Housing Partners has developed a number
community (including Starbucks Coffee, The Port of projects—from strategic planning and product
of Seattle, Sea-Tac Airport, Alaska Airlines, REI, positioning to site selection and zoning and regulatory
Weyerhaeuser, Amazon, Russell Investments, and compliance—the Folkestone project was highlighted
Nordstrom). An undeveloped two-block area was in our session to illustrate the nuances of combining a
situated in the town center of Burien, and was a local government’s vision for a particular site and the
prime location for a mixed-use project located near developer/end user’s vision for the site. The master
a town square park, transit center, farmers market plan for Folkestone includes 80 condominiums, 36
and library—all within one block. Merrill Gardens market-rate apartments, a 115-room boutique motel,
developed Merrill Gardens at Burien for $41 million, 109,000 square feet of retail space and a senior living
including 126 units with a 15-unit memory care wing. community that is sponsored by Presbyterian Homes
At the opening, Merrill Gardens collected 100 deposits & Services, including a 30-unit care center, a 58-unit
and within six months, saw 94% occupancy, which assisted living community, enhanced assisted living
drove more than $2 million in revenue. options, a 17-unit memory care neighborhood, and
148 independent living units.
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 11Residents of Wayzata felt strongly that a significant to develop 250 underground portion of the development should contain retail parking stalls. The community space. Initial hopes were that leading big-box retailers also needed to be walkable, even would lease the space; however, when that did not in the harsh MN winters; therefore, a geothermal come to fruition, the retail targeting strategy shifted energy system was implemented to heat and cool the to smaller units. Now, the community includes a campus. Additionally, the sidewalks and streets are barber, hair salon, several restaurants, Sotheby’s heated in the winter. International Realty, high-end boutiques, a running store, Anthropologie, and a Pilates studio. Additional The senior living community at Folkestone is vibrant requirements of the city were that there be sufficient and well-occupied with occupancy rates for its care parking to accommodate the mix of residents, center running at more than 92% since its opening in retail customers and hotel patrons; thus, the need 2015. The assisted living occupancy touts an average 2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 12
occupancy in excess of 96% since opening. Memory aspects. In developing
care is at 97% occupancy and independent living Downtown Columbia, Howard
averages 99% occupancy since opening. Among the County maintained significant
lessons learned with the Folkestone community were requirements of Howard Hughes, including
the need to be careful in making commitments to incorporating affordable housing, open space and
local jurisdictions, reinforce the focus on the benefits parks, upgraded public infrastructure and structured
for the community residents, consider service retail parking to accommodate a “park-once” approach,
over product retail, expect that there will be smaller allowing visitors to the area to park once and walk
retail units, plan for parking and, depending on within the town center.
the size of the retail commitment, engage a retail
management company. Important wins for this development included
securing Tenable, a publicly traded cybersecurity
Our final presenter was Mauricio Diaz, the Director company, as a flagship tenant that is establishing
of Strategic Initiatives from The Howard Hughes its world office headquarters at the development,
Corporation, a large mixed use developer in NY, and securing tax increment financing in the amount
MD, TX, NV and HI, among others. Though Howard of more than $48 million to support the costs of the
Hughes does not presently incorporate senior living public infrastructure. Through tax-exempt financing,
in its developments, it has been evaluating the the Maryland Economic Development Corporation
addition of senior living as part of the offerings of issued bonds, the proceeds of which were used to
its mixed use developments and is eager to offer its pay for public infrastructure within the development
perspective on how a large mixed use development and the debt service of which will be paid from the
can evolve. Diaz provided information regarding increased tax revenue received by Howard County.
its present development, Downtown Columbia in This form of tax-exempt financing is available in
Columbia, Maryland, conveniently located between nearly all states and should be a consideration in a
Baltimore, MD, and Washington, D.C. mixed use development, specifically in areas where
significant additional property tax revenue will be
Once complete, the new Downtown Columbia will generated, public infrastructure is a meaningful part
include 4.3 million square feet of office space, 6,250 of the development plan, and the development would
residential units, 640 hotel rooms and more than 1.25 not otherwise be completed or provide the same level
million square feet of retail space. While there is no of services and amenities.
senior living community presently contemplated, a
community like this would incorporate the walkability For more information on this session,
requirements for seniors and have a third-party please contact Melissa Messina.
managing the retail space and other development
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 13New Ways at Looking at Growth
and Redevelopment
Aging physical plants that are difficult to maintain and modern technology and opportunities for more social
market to new residents, land use restrictions, local engagement. The demographics were encouraging:
community opposition, and rising construction costs The 65-74 age group was expected to grow by almost
are just a few of the challenges senior living providers 40% throughout a five-year period.
face today in their efforts to improve and
succeed. The focus of “New Ways at Looking at Seattle Households % Change in Demographics
Growth and Redevelopment” was to examine
the strategies three leading organizations
employed to overcome these challenges and
deliver positive results.
Paul Aigner,
Vice President,
Transforming
Age, shared his
organization’s
experience in
redeveloping
Parkshore, a
community in
downtown Seattle
on the shore of Lake Washington. Parkshore
opened in 1963 and residents in its 113
independent living apartments enjoyed sweeping Transforming Age embarked on a comprehensive
views of Lake Washington throughout the 15-story master planning exercise for Parkshore in 2014.
building. However, over time, the building became Based on their analysis, they arrived on a capital
“stuck” in the past and was not as relevant as it once budget of $30 million to “reinvent” Parkshore. Units
had been in this competitive market area. More than were combined, in-unit washers and dryers were
half of the apartments were less than 750 square feet, installed, and studio apartments were no longer on
none had in-unit washers and dryers, and there was a the menu. Changes to the resident experience were
no-pet policy. Occupancy had declined to 82%, while implemented: Modern dining venues were created,
the average resident age increased to 87. common areas like an updated multi-purpose room,
theater/lecture room and a Sky Lounge that took
Market research yielded anticipated themes: Existing advantage of the views of Lake Washington were
residents liked the sense of community, the current created. Operationally, the prior three-meals-per- day
amenities and were not looking to change, while plan was eliminated in favor of a more desired one-
prospective residents demanded larger units, meal plan, and the community is now pet-friendly.
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 14In order to maximize the return on investment, Sequoia entered into
the entrance fee and monthly service fee for each agreements with Safeway, one
apartment were analyzed, and premium pricing of the largest supermarket
applied for the higher and larger apartments. chains in the country, for the redevelopment of a
25-acre former office park. Safeway’s initial plans
The master plan was a tremendous success. Occupancy called for a mixed use development with shopping,
has increased, there is now a 300-person wait list and dining, entertainment and office venues, but after
the average resident age has decreased to 82. local opposition forced Safeway to carve out a four-
acre parcel for other uses, Sequoia signed on to
David Latina, Vice President of Development for
develop a senior living community. This relationship
Sequoia Living (until recently, Northern California
achieved Sequoia’s primary objective of avoiding the
Presbyterian Homes & Services), described
potentially costly and time consuming process of
the development process for one of its newest
obtaining the required land entitlements.
communities, Viamonte at Walnut Creek. Walnut Creek
is 24 miles east of
San Francisco, and
about 12 miles east
of Berkeley, CA. The
real-estate boom
in Northern CA is
well documented
with institutional
capital flooding the
market and new
condo and rental
housing development.
Although this was
a target market for
Sequoia, management
realized they could
not compete alone in
order to secure land.
Furthermore assume
the entitlement and
resource risk that
would accompany
going it alone.
The mixed use community surrounding The Orchids at Walnut Creek
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 15Management also recognized the human resources The Lamplight Inn is a 14-story
required for a new community development and community that began its life as
opted to engage one of the leading firms in the field, a Holiday Inn in 1968. Centrally
Greenbrier Development, to serve as development located in downtown Fort Wayne, it was at one
consultant for Viamonte. time well known as the destination for many social
events in the city. Priority Life Care purchased
Sequoia determined Viamonte would be a “dynamic the building in 2010 for $4.4 million and invested
senior living” community and adopted a home-for- approximately $2.0 million in renovations that
life model. This entrance fee community would offer included a new roof, modernization of the elevators
residents 174 independent living apartments, assisted and conversion of the hotel rooms to care rooms.
living and memory care on campus with skilled Supplementing its own investment were grants
nursing services provided by three local facilities from from Fort Wayne as part of the city’s downtown
whom residents could choose. revitalization program. This conversion is credited
with jumpstarting a broad revitalization of the
The hard work by Sequoia and Greenbrier has paid
city and the surrounding neighborhoods that has
off so far. The sales goal of deposits on 75% of the
surpassed $426 million in completed projects (or
independent living apartments was achieved in just
project under construction or consideration).
12 months, which, according to management, is tied
for the second fastest in the country. After closing Today, the community consistently enjoys
on a $187.2 million Cal Mortgage bond financing in occupancy at or above 90% and generates healthy
May 2018 ($142 million to be repaid with entrance cash flow. Adding to its unique attributes is that
fees), construction is underway with initial occupancy the Lamplight Inn is the largest Medicaid waiver
scheduled for mid-2020. community in the state of IN, expanding the care
provided to more area seniors.
Severine Petras, CEO and
Co-Founder, Priority Life Care Management, provided For more information on this session,
her unique experience in converting a former please contact Andrew Nesi.
hotel in downtown Fort Wayne, IN, into a senior
living community. A project such as this has many
challenges on several fronts: design, age of physical
plant, operations, and revenue management—to
name a few.
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 16The Future of the Continuum of Care
Skilled nursing and the care facility. Slavin provided his was provided as a social model
aspect of retirement communities viewpoint on the trends, and the nursing home industry
is in the midst of a transformation challenges, and stressors that are preferred to keep this new care
and providers are continuing effecting the changes in providing type as non-medical. If a CCRC
to face challenges of delivering skilled nursing care. He envisions were to add assisted living to its
the full continuum of care while facilities remaining smaller in campus, the community was only
operating an efficient business size, but adopting a hospitality permitted to provide services to
for their residents. This session approach to environment and existing residents and was not
provided three perspectives customer service. Certain skilled allowed to admit from outside
on navigating the future of nursing facilities may seek to of the community. Brookhaven
skilled nursing as organizations repurpose portions of their continued to operate with only
and communities try to grow assets to add additional care, nine assisted living units until
and reposition in the current such as assisted living, mental 2005, when the internal demand
environment. Also illuminated health, specialized units and was growing with a wait list.
in the session was the ways in reinvestment in post-acute. Slavin The organization then sought to
which senior living providers will discussed how the new vision of expand its independent living
either embrace or de-emphasize the continuum of care will contain with an additional 40 units and
skilled nursing care as part of the more overlaps within the various assisted living to 20 total units to
continuum of care. components as compared to the meet internal and external needs,
current silo model. while creating more private
Warren Slavin, CEO Emeritus rooms in its skilled nursing with
of Charles E. Smith Life James Freehling, CEO and private showers. Following these
Communities, shared the President of Brookhaven at changes, Freehling formed a
perspective of a not-profit Lexington, provided the story health care task force to assess
executive who is running a of the evolution of a mid-size the shifting needs of Brookhaven.
single campus organization single-site CCRC located in The task force implemented
with a spectrum of care. Their Lexington, MA, for more than change on the campus of
campus provides the continuum 30 years. Because in the early Brookhaven in the form of de-
of care with skilled nursing, 1990s there was no assisted emphasizing skilled nursing and
assisted living, memory care and living in MA and skilled nursing reducing the number of beds. As
supportive independent living, was typically added to meet well, they added assisted living
but each component is operated internal life care resident needs, units and built 49 independent
independently. Notably, the Brookhaven operated with only living units on adjacent land.
skilled nursing facility consists independent living and skilled
of 550 beds, which is a large nursing care. Once assisted
operation for a stand-alone living was regulated in 1994, it
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 17Richard Ackerman,
Chairman and Senior
Managing Principal of Big
Rock Seniors Housing
provided insight on the environment, versus skilled care.
development of new class This allows the community to
“A” senior housing and have little to no reliance on non-
how its organization was private pay revenue sources to
addressing the needs of eliminate financial uncertainties
today’s senior population, that accompany the Medicare
which is continuing to and Medicaid reimbursement
change with Baby Boomers programs that are associated with
nearing retirement age. skilled nursing.
Ackerman emphasized
The speakers described ways in
that residential design that
which non-profit and for-profit
is based on accessibility
organizations are evaluating the
and amenity offerings is
ever-changing care component
vital to new independent
need of the continuum, along
living residents. Big
with transforming residential
Rock communities are The third pillar of entertainment
consumer needs. Each
implementing an operational offers premier dining rooms
organization advocates for
strategy via “three pillars” and bars, movie theaters with
less reliance in the future on
(technology, wellness, and cinema quality screens and
traditional skilled nursing care in
entertainment). The technology sound systems, large auditoriums
the senior living environment.
pillar provides “smart” for professional and education
technology with seamless programming, and ample indoor For more information on
voice recognition and on- and outdoor lounge areas, this session, please contact
site IT; these services and helping residents to enjoy a Kerry Moynihan.
products are expected to assist sense of community. Big Rock
residents and provide fully communities are designed and
integrated technology into operated with an emphasis on
the physical infrastructure, hospitality and well-being, but
while accommodating future provide no skilled nursing care—
advancement. The wellness based on the view that retirement
pillar delivers all aspects of communities are focused on
fitness, including: exercise the consumer and skilled care
studios, aquatic centers, aerobics is shifting toward rehabilitation
rooms, on-site trainers, physical and short-term stays. Hence,
therapists, and nutrition experts, residents are provided wellness
helping to promote well-being for services, within a residential
every resident in the community. assisted living or memory support
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 18The Science of Revenue
Management and How It Can be
Applied To Senior Living
Highlighting research from the travel and hospitality attracting more travelers – these included the use of
sectors, including airlines and hotels, Professor differentiated fares, underpinned by multiple classes
Christopher Anderson presented a thought-provoking of service (economy, business class, first class), varied
session, offering insights on the evolution of revenue amenities (seating location, amount of legroom,
management in these sectors, and drew parallels to checked baggage with/without fees, cancellation/
the senior living sector. change options, etc.) along with the amount of lead
time a seat is booked
prior to departure date.
Further, Professor
Anderson highlighted
the common tendency
for airlines, as well as
companies across the
hospitality sectors,
to compete based on
price, which frequently
escalate into “price
wars” and, rather than
Central to the effective and profitable use of driving favorable financial performance, result in
revenue management is the existence of what is a declines in profitability.
“perishable” service – in other words, the service is
available for consumption by a customer only for a Beyond the airlines, Professor Anderson highlighted
limited amount of time. Examples in the travel realm the dramatic transformation and developments
include airline seats, cruise vacations and hotel within the past few decades in the hotel sector.
rooms, among others, with similar applicability for In this realm, he discussed the growth of the
senior living room/service capacity. Internet and the emergence of commission-based
travel intermediaries who provide customers with
Using fundamental economic principles of supply- transparency on room rates and availability from
demand, Professor Anderson described the genesis multiple hoteliers across the world. Most recently,
of revenue management strategies, beginning with with the proliferation of mobile device functionality
airlines in the 1970s, and their subsequent evolution and utilization, and continued growth in low-cost
within the industry, as well as other hospitality and bandwidth, this evolution has further advanced as
travel sectors, in the following decades. He cited customers have access to this information at any
strategies in the airline sector that are aimed at time—literally at their fingertips.
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 19Building on his review of the airline and hotel to the magnitude and duration
industries, Professor Anderson discussed sales and of discounting as it will have a
marketing in the senior living sector as well as the more sustained financial impact
implications and opportunities for the use of on the service provider.
revenue management.
Professor Anderson observed that senior living
Relating to marketing and sales, Professor services, varying across the continuum of care and
Anderson discussed the impact of the Internet and even within each care/service component, lend
advancements in its use in senior living marketing themselves well to the use of revenue management
and sales. This includes the evolution of digital strategies. This is further supported by their delivery
marketing in the senior living sector, evolving from in a facility/campus-based setting with varied unit
primarily passive banner/display advertising to more types, sizes and locations as well as physical and
active “per-click” advertising. As further illustration, service amenities. With this said, in response to
he provided an example of the variability in the “per- sentiments expressed by Conference attendees,
click” cost of advertising among multiple senior living he acknowledged the uniqueness of senior living
communities as well as commission-based senior services, including the provision of high levels of care
living community intermediaries, such as a Place and custodianship of older adults in the latter stages
for Mom and Care.com, located within a common of life – this is a significant difference compared to
geographic market. travel and hospitality services which, while being high
value from a leisure/lifestyle perspective, are less
Relating to revenue management opportunities in
personalized or sensitive in nature and complexity
the senior living sector, Professor Anderson noted
and do not typically impact life and death.
similarities between senior living and the airline
and hotel sectors, as well as the cruise ship and The session prompted interesting discussion and
casino sectors. Interestingly, relating the cruise ship thinking about the current and potential strategies
sector to senior living, he noted opportunities for for revenue management. Further questions for
additional revenue generation, beyond revenue from additional consideration include:
room occupancy, resulting from resident demand
■■The applicability of specific revenue management
for additional services and amenities; for the casino
strategies across the continuum of care from
sector in relation to senior living, he noted the
independent living to assisted living/personal
opportunity for “customization” of services catering
care to memory care and skilled nursing, and
to the required and discretionary needs of residents.
home and community-based services, each
Further, Professor Anderson discussed the concept of of which have differing demand features and
“lifetime customer value,” centered on the duration sources of payment/reimbursement and
of a customer relationship and the total amount of
■■The extent of further growth of commission-
potential revenue that may be generated. He noted
based intermediaries, like a Place for Mom and
that consideration of lifetime value should inform
Care.com, and the impact on the demand for and
pricing levels and the extent of any discounting in
pricing of senior living services.
price. For example, for short-term stays, it may be
advisable to offer significant price discounting to
For more information on this session,
fill unused capacity; on the other hand, for longer-
please contact Jim Bodine.
term stays, careful consideration should be given
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 20Let’s Hear from the Leaders
We were fortunate to have three The Board was centralized and housing, using charitable
industry leaders address the reduced from 75 to 17 members. donations to add services.
2019 HJ Sims Late Winter The Board focused on short-term
Conference attendees. stability and long- term growth. This strategy has successfully
Once structural changes were transformed MRC into a well-
Ron Jennette, President and accomplished, the Board turned balanced and financially secure
CEO of Methodist Retirement to instituting a new strategic organization that has “evolved
Communities (MRC), shared growth and initiative plan. to serve.”
the story of the transition of his
non-profit organization from The first step was difficult–the Our next speaker was Wayne
“Mission Driven” (but financially organization needed to shed Powell, CEO of Civatas Senior
Living, a for-profit
senior living provider.
Powell spoke about
“Succession Planning
for Growth.” He talked
about the journey from
an entrepreneurial
enterprise to a
sustainable company.
He discussed the
growth of Civitas,
which evolved from a
company with limited
assets in 2012, to a
challenged), to what is today a itself of unprofitable assets. company that today
growing and financially secure After that, it decided to embark manages 35 communities with 24
provider. When a new CEO was on a measured growth plan more under construction.
hired in 2008, the organization that incorporated three areas
inherited a company with multiple of development. First focus: In order to create a sustainable
boards, a decentralized leadership entry-fee developments that platform, Powell emphasized
structure and no plan for growth. serve middle/upper markets and three needs: identify leaders
generate financial resources in your organization early and
As Jennette put it, the key to for the organization. Second dedicate resources to develop
success was to first create an focus: more middle-level rental their leadership talent; develop
organization that was focused and communities. Third focus: systems that can grow with
fully dedicated to a growth plan. restricted income HUD senior the organization; and allow for
leadership transition.
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 21Powell challenged leaders to ■■The need to customize and attention
continually evaluate the “exit personalize the delivery of to personal
plan.” As he put it, an organization care by giving residents preferences
should strive to be in a position choices and empowering and a dedication to ensuring each
that, if there was a sudden staff to meet resident choice. person lives the life they seek to
exit of the top leaders in the the fullest extent possible.
organization, others should Kelly painted a picture of the
be prepared and trained to future where residents and For more information on
seamlessly “pick up the ball and caregivers interact both within this session, please contact
run with it.” Only by having a and outside communities with Jeffrey Sands.
strong bench and systems that
ensure sustainability can an
organization succeed.
Our final speaker was Sean
Kelly, President and CEO of The
Kendal Corporation. Kelly gave
an aspirational talk about Kendal
in “A Changing World of Senior
Living.” He discussed success
factors “across the field of aging.”
These included:
■■A total focus on creating an
inclusive, caring and loving
“culture” which permeates
your organization, your
staff and envelopes your
residents;
■■Attention to scale–adopting
efficient systems that can
bring more programming
at better pricing to
residents and leveraging
off community resources to
augment services;
■■A recognition that cost
matters and a commitment
to understanding how
people perceive value and
how to deliver it throughout
the organization; and
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 22Insights into Today’s
Financial Markets
Matthew Forester, Chief Investment Officer and domestic product growth in the U.S. has closely
Director of Investments for BNY Mellon | Lockwood, followed population growth, and population growth
provided keen insights into the impact of tightening has steadily declined. GDP and population growth
monetary policies and the many changes we are has similarly declined in Germany, Japan and the
seeing in our geopolitical and political environments. European Union.
Of the many “take away” points in Forester’s
presentation, several are of significant interest to Also, the correlation between the decline in birth
the fixed income marketplace and Senior Living rates for these countries and decline in the 10-
Providers. The performance of the S&P 500, after a year interest rate for respective sovereign debt is
rather significant fall in January of 2019, appears to dramatic. If these correlations hold true in the future,
have discounted a great deal of near term pessimism, interest rates are not likely to increase significantly in
resulting in a rebound to the levels of the fall of 2018. the near to intermediate term. This analysis suggests
that those who believe interest rates are on the verge
However, capital markets are sensitive to economic of substantial increases will be disappointed. The
growth and economic growth is sensitive to impact on savings returns for seniors and pension
population growth, and to a lesser extent, funds is significant.
improvements in productivity. Historically, real
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 23Forester also discussed the tight labor market in In summary, the economic
the U.S. The number of job openings had declined indicators Lockwood is watching
sharply, and job openings now equal or exceed include: upside indicators like
workers unemployed. This is a significant change in labor market momentum, deregulation and tax
this ratio brought on by the recent strong economy. reform environment, and strong consumer sentiment;
Somewhat surprisingly, the worker shortage has ambiguous indicators like “neutral” interest rate
been relatively mitigated by people who were level, currency risk and trade rhetoric; and downside
once considered out of the workforce and are now indicators such as late stage economic cycle risks,
returning to the workforce. The presentation referred weak global date and demographic constraints.
to these workers as “coming from sidelines.”
For more information on this session,
please contact Mark Landreville.
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 24Event & Recreational Activities
We invite you to view photos from William Dean Chocolates, Sailing While the weather may not have
the 2019 Late Winter Conference. on the Kai Lani Catamaran and cooperated, we all managed to
Shown below are highlights the Schooner Clearwater, Fishing have a fun time!
from our recreational activities: at Hubbard’s Marina and Biking
For a full look at all the
Golf Tournament at Innisbrook, through Dunedin.
conference photos, please visit
Chocolate Making & Tasting at
www.hjsims.com/2019lwc.
2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 25Save the Date for San Diego in 2020 InterContinental San Diego February 25 – 27, 2020 2019 LATE WINTER CONFERENCE RECAP | WWW.HJSIMS.COM TOP 26
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