Why senior living is less about the real estate and more about the operations
By Scott McCorvie, CEO, Enhance Senior Living
Enhance Senior Living is a national senior living broker firm that specializes in nationwide investment brokerage solutions, including active adult, independent living, assisted living, memory care, and skilled nursing brokerages. Learn more about our Senior Living Operations broker and operational improvement solutions, and contact us today to learn how we can help you enhance senior living.
To enhance your senior living knowledge subscribe to the Enhance Senior Living Podcast. The show is on all podcast platforms including Apple Podcasts | Spotify | Amazon Music
I laugh sometimes when I talk with different investment groups trying to enter the Senior Living Operations industry. They rattle off ad-hoc numbers and calculations from complex spreadsheets, and quote terms and sophisticated verbiage from market studies. However, I’m not saying that accurate investment proforma models and thoughtful market studies are not valuable tools. I wouldn’t go “all-in” just because model returns look good, or the supply and demand analysis shows unmet beds.
In fact, I sometimes question whether Senior Living Operations is real estate.
Location is key.
Building design, construction quality, and offered amenities help.
However, to have a successful senior living community, you must think beyond typical commercial real estate metrics.
I know some developers new to the industry think we will add any manager you want at 5%.
We will lease it up in 12 months.
That manager mentality may work for office, industrial, retail, multifamily, and hospitality, but it remains in a different class.
Over the past 22 years, I’ve worked on successful senior living projects. In Senior Living Operations, the single most important variable is the operator. The operator is crucial for overall success in senior living investments. I can’t stress this enough. Additionally, I have changed operators on Senior Living Operations senior living investments without touching the real estate. The results were almost immediate and dramatic. This would not be the case for any other commercial real estate class.
In Senior Living Operations, a very successful regional operator told me this during a property tour. However, he said, ‘Scott, I wouldn’t let the real estate get in the way of a successful community.’ Moreover, this is true beyond sticks and bricks; it rests on resident care, programming, and the community’s reputation. Additionally, strong word-of-mouth referrals remain the best marketing, and they cost nothing in the budget. Finally, investors should look past real estate and seek operator partnerships that improve care and engagement.
Enhance Senior Living is a national senior living broker firm specializing in nationwide senior living investment brokerage solutions including active adult brokerage, independent living brokerage, assisted living brokerage, memory care brokerage, and skilled nursing brokerage. Learn more about our senior living broker and operational improvement solutions and contact us today to learn how we can help you enhance senior living today.
To enhance your senior living knowledge subscribe to the Enhance Senior Living Podcast. The show is on all podcast platforms including Apple Podcasts | Spotify | Amazon Music
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