The SHB Interview: J. Mark Vanderbeck CEO, Acts Retirement-Life Communities

Preacher’s son finds his own calling in nonprofit seniors housing.

By Jeff Shaw

It makes a lot of sense that J. Mark Vanderbeck would end up as CEO of Acts Retirement-Life Communities, the largest nonprofit seniors housing owner-operator in the United States by units, according to the American Seniors Housing Association’s 2016 numbers.

As the son, grandson and great-grandson of preachers, perhaps it’s divine providence that Vanderbeck would be drawn to a company also founded by a preacher.

When Vanderbeck told his father that he didn’t feel a calling to become a pastor, the response was simple: “There are all kinds of congregations.” Vanderbeck ended up finding his calling elsewhere after working for a nonprofit seniors housing community in California, a path that would eventually lead him in 1998 to Acts, a nonprofit operator largely focused on continuing care retirement communities (CCRCs). His only career positions have been at nonprofit, faith-based seniors housing companies.

Vanderbeck climbed the ladder at Acts, eventually being named CEO in 2014. He now oversees the company’s portfolio of 21 communities and nearly 8,000 units. The properties are heavily concentrated in Pennsylvania (where the company was founded) and Florida, with additional communities in Alabama, Delaware, Florida, Georgia, Maryland, North Carolina and South Carolina. 

Vanderbeck also serves as an ambassador for the nonprofit seniors housing industry. He’s a regular speaker at industry events and has served extensively on the boards of the national and state associations of LeadingAge, the main industry association for nonprofit operators. 

Seniors Housing Business sat down with Vanderbeck to find out how he found his calling, and what the future holds for the industry’s largest nonprofit.

 

Seniors Housing Business: Walk me through Acts’ history.

J. Mark Vanderbeck: Our original incorporation was in 1971 and we opened our first community in 1972. The community was originally called Open Door Estates, but is now called Fort Washington Estates. 

That first community was adjacent to the Church of the Open Door in Fort Washington, Pa. The pastor of that church back then decided he would go see all the members of his congregation in their homes. In some cases that meant visiting a convalescent home, nursing home or non-residential facility. If you can think back about nursing homes in the 1970s, some of those locations weren’t the best environments.

I can say this as a preacher’s kid: he did what preachers do. He came back Sunday and preached a sermon about how people should be able to enjoy their senior years in a better environment. There should be a better way.

The people in the church got excited. Some even took out second mortgages to build the first section of Open Door Estates, offering the initial funds for 30 independent living units. Lo and behold, they filled up quickly and the second phase was completed, including some assisted living and 90 independent living units.

A waiting list was established. A new property was purchased for a second community, then another for a third community. At that point, the church had a discussion with the pastor. It was getting too big for what the church could do, so the preacher established Acts and became the president. That was in the mid-1970s.

Then, all of a sudden, a group from Florida contacted Acts with some properties for Acts to purchase in the Boca Raton area. Acts started to grow just by word of mouth. During the 1970s and the 1980s, Acts built its first 15 communities as traditional, ground-up development. Then, in the 1990s, we began to grow through affiliation and acquisition.

 

SHB: When did you get involved?

Vanderbeck: I came in 1998 as vice president of operations for the company’s eight communities in Pennsylvania. Over the next 10 years or so, I became senior vice president, overseeing some of the corporate functions. Then I became executive vice president where I oversaw all the communities’ operations, both north and south, up and down the East Coast. Then in 2014, we went through a succession planning search process and I was lucky enough to be named CEO of Acts. 

That’s pretty much the history of the company. It started with a vision of a single pastor. Obviously it’s grown to what you now see, 21 communities in eight states serving nearly 9,000 residents.

 

SHB: Tell me some more about your father.

Vanderbeck: At the time that Acts was developing, my father was also president of a faith-based organization building retirement housing. So, growing up in that kind of world, my father had dual experience as a pastor of local churches and also as president of a faith-based organization. 

My father was a third-generation preacher. His father and grandfather had been preachers. One of the things you understand as a local pastor is that you need to have a calling to do that type of work.

As I was leaving graduate school, dad picked me up in the car one day and I told him, “I do not feel the call to lead a church.” After thinking for 10 seconds, he gave me the best answer: “There are all types of congregations.” He said to find where you want to serve, and do it with passion and excellence.

In college, I worked one summer at a retirement community in Oakland. That experience gave me the opportunity to work while I was going to school. It just became something that I had a real passion for.

I have only worked for nonprofit, faith-based organizations. I’m sure that all goes back to growing up in the environment I did with my dad. Ultimately, my dad’s last job was director of development with [Christian evangelist] Billy Graham. So that faith component was always part of my life. The nice thing about faith-based organizations is you get to live that out. I always feel I’ve been pretty blessed to be able to do that.

 

SHB: Acts recently completed a brand refresh, changing the name from ACTS in all capital letters to Acts and changing the logo and slogan. Why did you make the change and why now?

Vanderbeck: We have 21 communities up and down the East Coast. Sometimes in a given locale, the focus is on the community without an understanding of Acts as a whole. We thought we needed an identification that made it clear that Acts is the larger organization. Primarily we wanted the communities to be identified with the Acts brand, and then also in conjunction with the individual communities. We thought it was very important that people have an understanding of the larger organization.

Another issue was many people thought ACTS was an acronym. By switching to the use of lower case in the company name, we thought it would help create less confusion. 

It goes back to the history of the company. Our bylaws reference the biblical book of Acts. It was all part of honoring your mother and father.

 

SHB: Based on the ASHA 50, you’re the largest nonprofit owner and operator of seniors housing by units in the United States. What does that distinction mean to you?

Vanderbeck: It certainly means we’re being successful in serving seniors and providing a large basis for employees to work in this kind of industry. But our focus is always on quality.

More than anything, the size of the organization gives us scale and allows us to have expertise in all the major disciplines. When an issue arises in a community — IT or culinary or maintenance, any area you can think of — we’ve got staff that can respond to that and provide service and counsel to our communities.

We very much emphasize resident and employee satisfaction. From an employee standpoint, we’ve been extremely successful with regard to retention. For full-time employees, our turnover is less than 13 percent annually. Industry-wide, that’s an amazing number, and it’s even better when you look just at our healthcare staff.

Also, we are very focused on education and training. About 15 years ago we created a training school called Acts Corporate University. Most corporate universities are for the top 5 percent of an organization. We went another way. We wanted a university that served the 95 percent. 

The purpose is to provide training to our hourly employees, to give them the opportunity to improve their skills and get promoted. That decision helped define what we feel is a very strong relationship with our employees, hence the low turnover rate. 

 

SHB: I also noticed that those approximately 8,000 units come from only 21 communities. What’s the strategy behind having so many units in each community you own and operate?

Vanderbeck: We don’t see those numbers in a given community as huge, specifically when you compare it to other places with 1,200 independent living units.

We’ve been repositioning communities, which in some cases meant reducing independent living so we could provide more privacy in the assisted living and skilled nursing environments. When we started in the 1970s and 1980s, semi-private and shared rooms were fine. That’s not now. You want single, private spaces. To perform that repositioning, we might close an area down, move residents out, and then that building is restructured for single, private suites.

When you really establish a community through market and financial studies, you’re looking at the effective size for seniors for that area. What’s the penetration rate? What’s the ability to bring employees or residents? We’ve found that generally, a good number for us is something in the neighborhood of 250 to 300 independent living units, 60 to 90 skilled nursing beds and 30 to 60 assisted living units. 

 

SHB: You own and operate every community. Has that always been the case? What advantage do you see in fully owning and operating every community?

Vanderbeck: People will sometimes ask us, “Why don’t you just manage the operations?” We feel there are great advantages to owning and operating. Certainly when you look at the repositioning efforts, they would’ve been highly difficult or impossible if we didn’t fully own and operate.

From an organizational standpoint, that’s always been our model. The nice thing about being nonprofit and faith-based is that all our money goes back into the organization rather than to shareholders.

 

SHB: Are there any acquisition or development plans in the works? What are the long-term goals for the company?

Vanderbeck: As you can imagine, we hear from people quite a bit in that regard. There probably aren’t too many weeks or months that someone doesn’t say, “We’ve got a property we’d like you to look at.” From our standpoint, we look again at our regions and see where we can support communities and fill in underserved areas. When you look at it from that perspective, there are opportunities in the mid-South.

The Carolinas are a growing area of development. There are a number of states we’re not involved in, such as Tennessee and Virginia, so there are opportunities there as well. We’re fairly dominant from a Pennsylvania and Florida standpoint, but I think there are other areas that could be filled in. Having said that, it doesn’t mean we’re necessarily pigeonholed into those environments. You look at each situation as a unique opportunity.

Our board established defined criteria that it wants us to utilize when we evaluate opportunities for growth. There is a very formalized due diligence process we go through. From A to Z, we’re looking at a three- to six-month operation.

 

SHB: Do you have a preference for acquisitions versus development?

Vanderbeck: I don’t know if preference is the word. When you look at traditional development, you’re most likely talking about a significant capital outlay. More importantly, in many cases, that may be a three-phase development over five years. With acquisition and affiliation, within a six-month period you can really bring a community to fruition.

Even though the last few years have been more affiliations, we had the opportunity recently to purchase a 47-acre tract next to one of our existing communities in Charlotte. The family that owned the property moved into the community and made that land available to us. We’re now in the process of developing that property as an expansion of the existing community.

Really, we’re open to both experiences. It usually comes down to timing. Affiliation gives you some flexibility — financially and operationally — that ground-up development doesn’t.

 

SHB: The corporate leaders at Acts have all been with the company a long time, several for decades, and many have climbed the corporate ladder at the organization. Two members of the senior management team even started as waiters. What is it about Acts that keeps people at the company for so long? 

Vanderbeck: We have a senior management group made up of 20 individuals, and if you document their service to Acts, it totals over 400 years. It’s a mind-boggling number.

I think it’s the result of the Acts culture of loving-kindness that exists here, and the really positive relationships between the employees, residents, our board and our management. It’s a very good environment from that standpoint.

It’s like a church. People have a calling. It’s not just a job. It’s not a short-term stepping stone toward something else. So much of business now is like being a free agent. You interview people, you hire people, and they jump all over the place. The reality is we have the long-term commitment of people.

One of the steps we took recently was adding nurse practitioners at all our communities. Some were part of Acts, but some were new hires from the outside. Recently I was leading a discussion at a company meeting. There were about 150 people in the room. To make a point I said, “If you are not in the same position you were hired for, stand up.” Basically the whole room stood up. Everybody’s been promoted.

You look at the senior management group — 17 of 19 have been promoted at least once. You’ll see many of the people in that group that got into responsible senior roles young in life. You don’t have to wait on age for opportunities. They’ll come to you.

SHB: What’s something that folks in the industry might be surprised to find out about you?

Vanderbeck: They’re probably not going to be surprised that I played basketball. I’m 6’9” and played at Bloomsburg University of Pennsylvania, a Division II school in Central Pennsylvania.

I’ve been involved with
LeadingAge since 1977, so people know me pretty well. Most people who know me know about the faith history, the preacher’s kid, the commitment to the organization. 

I guess the three most surprising things would be that I’m a cancer survivor of over 30 years, and I’m a cruise-planning expert. I’ve taken 15 cruises with my family and planned over 20 for friends. And I’m a fine art collector.

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