Older properties can compete and win

by Jeff Shaw

Location, services and technology make the difference in tenant attraction and retention.

By Jane Adler

It’s a troubling sign for building owners and operators when a sparkling new facility opens up nearby. Competition for residents is likely to intensify. 

Owners and operators of older buildings must rethink marketing plans, and may even have to consider a complete overhaul of the property.

Although a major renovation may not be practical, there are ways to meet and beat the competition. Beefing up services and adding new technology are among the most effective strategies. 

Traditional building designs and finishes can sometimes work in favor of an older property too, providing a familiar and comfortable setting for elders. 

“Older buildings don’t scare us off,” says Donny Edwards, co-president of the Covenant Group, a seniors housing operator based in Fort Worth, Texas. “Too many companies use the physical plant as an excuse not to be fully occupied.”

A subsidiary of the Covenant Group, Sagora Senior Living, operates 17 properties in Texas, Oklahoma and Florida. The properties are owned by a REIT partner. Covenant has three new properties under development. 

The company’s portfolio includes independent, assisted living and memory care properties as well as cottages. A handful of the large facilities are older buildings, two built in the late 1990s, and two others from the late 1980s. The Covenant Group acquired all four of the older properties within the last 10 years. 

“We understand what it costs to build new,” says Edwards, noting that Covenant owns a construction company that handles new ground-up development. “We feel there’s a place for older buildings.”

In 2005, the Covenant Group bought Heritage Place, an assisted living facility built in 1987. A big advantage was the building’s location in Burleson, Texas, near Fort Worth and very close to Texas Health Huguley Hospital. Older properties often have the best locations, says Edwards. Good in-fill sites suitable for new development are scarce. 

Another plus for Heritage Place is its three-story atrium surrounded by open corridors overlooking a wood clad wall and fireplace. An atrium would be out of the question today in new construction because of the cost, says Edwards. “We would not and could not duplicate an atrium now.” 

The Heritage Place atrium serves as a valuable marketing tool. Residents and their families like the open feeling, and the space provides a welcome gathering point for visitors. The atrium is regularly updated and refreshed with new paint and carpeting. A chandelier was recently replaced to give the entrance a more modern look. 

Fate of old buildings

As new development in the sector ramps up, questions remain about the existing stock of buildings. Many of the skilled nursing facilities still in operation are 30 to 40 years old. 

Assisted living buildings that first broke onto the scene in 1990s are reaching the 25-year mark — a time when building systems often begin to fail and new paint and carpet isn’t enough to refresh the property. 

Adult children who guide the housing decisions expect the latest finishes, according to Jim Moore, founder and president of Moore Diversified Services, a senior living and healthcare consulting firm based in Fort Worth, Texas. 

Popular unit features include granite countertops, stainless steel appliances and wood floors. “They want a unit that looks new,” says Moore. He estimates that the cost of upgrades can range from $30,000 to $50,000 per unit. 

Another approach is to change the building’s unit mix, advises Moore. The market may have demand for more memory care units, or for more assisted living apartments. Independent living units in older buildings are sometimes larger than assisted or memory care units in new buildings. 

Changing older, more spacious independent living apartments into assisted living units can be a big selling point, he adds. 

Alternative solutions

Beyond major property overhauls, owners and operators are looking at other ways to compete. A focus on service can keep older buildings full, say operators. High staff ratios and staff education help improve the resident experience. 

Agemark Corp. concentrates on providing quality service to residents, which results in a positive reputation and referrals from the wider community. 

Based in Orinda, Calif., Agemark owns and operates 14 assisted living/memory care buildings across the nation. A new memory care building was scheduled to open July 1 in Kearney, Neb. 

While the company recently has concentrated on ground-up development, it started in the business by converting historic hotels located in small towns into senior living properties. The company owns six of these historic buildings for seniors. “The buildings are charming,” says Richard Westin, CEO of Agemark. 

Westin describes the historic buildings as the only four-story buildings in two-story towns. The buildings are located at the center of downtown and local residents are well acquainted with the buildings and their history.

Agemark, for example, owns and operates the Kensington in downtown Hastings, Neb., a town with a population of 25,000. Constructed in 1914 and opened as the Clarke Hotel, the property was purchased by Agemark in 1987 and completely renovated. 

The Kensington is listed on the National Register of Historic Places. It features original tiled floors, marble pillars and polished brass rails on an open staircase, plus ornate plaster work in the dining room. 

While the historic details are a draw, it’s the service that sets the property apart from the competition, says Westin. “In our business, it’s not the real estate.” 

Staffers create an environment where residents feel good about getting up in the morning, even if they feel bad physically. The building includes a memory care unit, and residents regularly participate in activities in the wider community, such as attending baseball games and picking strawberries. 

“Just because you can’t remember doesn’t mean you can’t enjoy life,” says Westin. “That’s why we’ve been in business for 30 years.”

New technology can help an older property compete. Built in 1982, Evergreen Residence in Visalia, Calif., provides a total of 40 units for assisted living and memory care residents. 

Using a variety of technology systems to provide care, the property is 100 percent occupied with a waiting list. “We can never compete with newer communities,” says Neil Tantingco, who owns Evergreen and is based in San Francisco. “Yet our building is full.”

When Tantingco bought the building in 2000, he didn’t undertake a major renovation, although some cosmetic changes were made to the building. Tantingco did invest in new technology, however.

He installed systems that track residents’ activities of daily living on touch-screen devices. Staffers can access the information so that when there’s a shift change the workers know how residents are doing. 

The system also connects residents and their families. Residents have a touch screen that they can use to make live video calls to relatives. One 98-year-old resident was able to meet her great granddaughter via the system. The resident now reads nightly bedtime stories to her great granddaughter via video calling. 

Families can check on their elderly relatives, too. One resident in hospice care was able to receive calls from friends and relatives saying goodbye. “The key thing is social connectivity,” says Tantingco. “Families love it.”

For residents with memory problems, a technology called GeriJoy is available. It uses a dog avatar to communicate with the resident, guiding the person through basic activities and providing companionship. The avatar is operated by live caregivers from a remote location who text messages to the avatar that then speaks to the resident.

Tantingco recently launched Connected Home Living, an in-home telehealth system for area seniors who still live in their own homes. A remote caregiver gauges the well-being of seniors and provides medication reminders. The service acts as a pipeline for in-person home care, which Tantingco’s company offers, and for future residents of Evergreen Residence. 

At the older buildings owned and operated by the Lutheran Home Association, technology helps boost occupancy rates. “If you’re not remodeling older buildings, then you have to look at other areas to make a difference,” says Michael Klatt, president at Belle Plaine, Minn.-based Lutheran Home Association. “We’re investing in technology.” 

The organization owns and operates 11 communities in Minnesota, Wisconsin and Florida with a mix of assisted living and memory care properties. Last year, the portfolio’s occupancy rate was 98.6 percent. 

Lutheran Home uses a monitoring technology from Healthsense of Minneapolis. Sensors monitor sleep, bathroom and activity patterns. The system flags changes for staffers who can intervene before a crisis occurs. Family members can also receive alerts via email or text. 

Relatives have access to an online portal that charts resident activity. The system also tracks the staff’s response time when a resident calls for help. “These kinds of systems keep families engaged at a high level,” says Klatt.

Another benefit is that the technology has reduced staff turnover, which helps improve resident satisfaction because of the relationships formed with hands-on caregivers. 

For example, staff turnover at one Lutheran Home property was reduced from 42 percent to 23 percent in one year, according to Klatt. “Technology empowers team members with data so they can make impactful decisions.”

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