H O U S I N GBUSINESSSENIORS

The Magazine for Seniors Housing Real Estate and Operations October / November 2014

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International money chases

page 36seniors housing

■ SHB InterviewWi l s o n Wo r l eyN at i o n a l R e t i re m e nt Co r p.

Before you build it, know your customer

44

Private equity pours into seniors housing 36

■ InvestmentNew twist on dementia care design 32

■ ArchitectureSenior Living SMART boosts effi ciency of small operators 48

■ Company Profi leNeed top talent? Here are some hiring tips 40

■ Operations

48 Seniors Housing Business ■ October-November 2014

■ Operations

A problem solver for small operators

Senior Living SMART matches ‘best-in-class’ vendors with senior living communities to maximize

efficiency and improve profitability.

By Joe Gose

Like many growing independent seniors housing operators, Commonwealth Assisted Living found itself spending an inordinate amount of time keeping various policy and procedural documents uniform and up-to-date.

The Charlottesville, Va.-based com-pany had grown to 20 assisted living and memory care properties in 12 years, and each facility had its own forms. They were housed on a shared Google drive in no particular order.

“It was all very disorganized,” says Earl Parker, chief operating officer for Com-monwealth. “It was hard to figure out what document version was the newest or when something had been updated.”

In an effort to streamline the mish-mash, Commonwealth in July began using Senior Living SMART’s SMARTPro portal service. At its root, SMARTPro serves as a repository of the most current documents that Com-monwealth’s communities can easily access.

But it also will allow each community to order products ranging from dining room dishes and silverware to brochures, sta-tionary and other marketing materials, he says. Historically, those processes typically required staffers at the company’s headquar-ters to expend significant time and effort.

“Our communities can now access what they need in a very efficient manner without have a lot of the people in the home office having to touch it,” says Parker, who estimates that SMARTPro will free up 20 hours a week for one full-time home office employee to

“It was hard to figure out what document version was the newest or when something had been updated,” says Earl Parker, chief operating officer for Commonwealth Assisted Living.

Belmont Village’s pilot program with a live chat website service recommended by Senior Living SMART landed several tours and two residents, one in its Belmont Village Oak Park community near Chicago.

50 Seniors Housing Business ■ October-November 2014

spend on more productive tasks. “More importantly, it gives

people peace of mind that they’re getting the right policies and information, and there’s no frus-tration related to searching for it,” explains Parker. “We were look-ing for a solution, and we really understood what Senior Living SMART had to offer and found that it was a very good match.”

Filling a voidThat’s the response Senior

Living SMART wants. The Sandwich, Mass.-based start-up, founded by seniors housing veterans Deborah Howard and Andrea Catizone, has set its sights on becoming a one-source resource hub for independent operators of seniors housing and skilled nursing organizations that generally own approximately 20 communities or less.

The fragmented market makes up about 70 percent of the indus-try in the U.S., and most smaller independent operators don’t have the time or staff to address and solve a myriad of challenges confronting them, from introduc-ing more effective recruitment strategies to adopting technology to satisfy the federal mandate to move to electronic medical records, says Howard.

The founders of Senior Liv-ing SMART — an acronym for strategy, marketing, analytics, resources and technology — have spent nearly two years building the company’s infrastructure and researching service providers and vendors to the seniors housing industry.

The company partners with those vendors that it deems “best in class” and recommends them to its growing roster of seniors housing members. The firm also provides case studies, white papers and other research on a variety of pressing operating top-ics on its website.

Senior Living SMART’s goal is to boost independent opera-tor efficiency, profitability and market share by giving the smaller firms the same tools as national seniors housing com-panies, which generally possess the internal support staff to make informed decisions when updat-ing accounting software or other operating functions.

Considering that operating expenses in the seniors hous-ing industry alone are typically $10,000 a unit per year, the com-pany has zeroed in on a substan-

tial niche. “Senior Liv-

ing SMART does what most execu-tive directors and owner-operators just don’t have time to do — demo, vet, compare and price resources nation-ally and endorse those that solve problems,” explains Howard, CEO of the company, who previously served as a sales and mar-keting executive for Emeritus Senior Living and Five Star Senior Living.

“There are a lot of solutions out there to choose from, and deciding on one is really over-whelming and time consuming given the day-to-day challenges of running a community,” adds Howard.

The company charges $30 a month per community for access to its resources.

What Senior Living SMART is not, stress Howard and Catizone, is a group purchasing organization. While the duo aim to give independent operators the same leverage that national brands enjoy, the founders say that the concept’s value extends far beyond providing members with discounts to computers or uniforms. Vendors and service providers don’t pay to become partners with the company.

“We’re a group solutions orga-nization,” says Howard. “We help

operators focus on being more suc-cessful today with the basic block-ing and tackling of running com-munities, but we also are providing access to innova-tion to ensure that they’re relevant tomorrow.”

Company under construction

Howard and Catizone launched Senior Living SMART in Septem-ber 2012 and first

focused on building the technol-ogy. About midway through 2013, the company’s website went live, and the founders also spent much of the year developing partner-ships with vendors, suppliers and consultants. In January the com-pany began recruiting members.

Senior Living SMART signed up 225 communities in 10 months, and Howard expects that number to grow to 500 by the end of the year. The founders declined to discuss revenue growth, but they have funded the business themselves and are looking for equity partners. The company also has signed 60 national busi-ness partners to serve its mem-bers over the last 18 months.

“At this point vendors, suppli-ers and consultants are finding us because everyone is trying to figure out how to access and sup-port a very fragmented market,” says Howard. “So, we’re adding

business partners on a pretty regular basis.”

Ultimately that enables com-munities to make smart deci-sions when they’re looking to increase occupancy or beef up resident-monitoring technol-ogy. For example, Executives at Houston-based Belmont Village Senior Living earlier this year wanted to boost the number of tours generated through its web-site, and so it began investigat-ing a number of companies that provided live chat technology.

After Senior Living SMART introduced SiteStaff to the seniors housing firm, however, it didn’t take long to make the decision, says Jeff DeBevec, a spokesman with Belmont Village, which operates 24 communities in the Midwest, Southeast and South-west. The operator was especially impressed with the service pro-vider’s responsiveness to ques-tions about the service, contracts, effectiveness and other concerns.

During a 30-day pilot program, 50 live chat engagements resulted in 15 tours and two new resi-dents, including a move-in at the company’s Belmont Village Oak Park community near Chicago, he adds. Belmont Village recently contracted to deploy the system as a constant website feature.

“The live chat company that Senior Living SMART recom-mended was, frankly, far and wide above the others,” says DeBevec. “So I felt like we were in good hands.”

Now the operator is using other products and vendors endorsed by Senior Living SMART, includ-ing firms that conduct post-tour and customer satisfaction sur-veys and mystery shoppers that compare its communities with competitors, adds Carlene Motto, executive vice president of sales for Belmont Village.

“There’s a lot of interest in innovation, new products, new technology, and programs and services on the senior housing side,” she says. “But during the day we’re getting a lot of calls from these companies while we’re trying to run a business. What I appreciate about Senior Living SMART is that they’ve been in our business and understand it.”

Ten years ago, independent operators didn’t face as many challenges, suggests Catizone. But changing regulations, customer demands and technology have created a more complex environ-ment fraught with distractions.

“Operators are so busy that it’s hard for them to get their head up long enough to realize that there’s help out there,” says Deborah Howard co-founder, Senior Living SMART.

$200

$180

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$140

$120

$100

$80

$60

$40

$20

0

Top five monthly operating expenses per occupied assisted living unit*

Raw food is the top operating expense monthly per occupied assisted living unit. By partnering with a variety of proven vendors, suppliers and consultants, Senior Living SMART helps operators cut costs and create efficiencies on everything from food to utilities to marketing costs. The savings can be as much as 20 percent.

Raw food Utilities Property taxes Repairs/ Marketing maintenance

* exclusive of labor** savings based on Senior Living SMART partner data

Source: State of Seniors Housing 2013

Operating expenses

Potential Senior Living

SMART savings**

“Over the last five to 10 years, the industry has become more reactive than proactive,...” says Andrea Catizone co-founder, Senior Living SMART.

51October-November 2014 ■ Seniors Housing Business

“Over the last fi ve to 10 years, the industry has become more reactive than proactive, and the focus has been to just get through the day because operators are stretched thin,” says Catizone, previously an executive with Benchmark Assisted Living (now Benchmark Senior Living).

“But there are a lot of great resources and tools out there that can sort through the noise and help operators with regulatory compliance, consumer demands and risk management,” adds Catizone.

Demand expansionWhen Howard and Cati-

zone fi rst started Senior Living SMART, they initially sought to cut costs and create effi ciencies related to everyday operations, such as reducing turnover or controlling costs. From her time spent at national and regional operators, for example, Howard discovered that independent operators were often paying four to fi ve times more for lead gen-erations than big companies.

The partners quickly ramped up the part of the business that addresses those challenges. Oper-ators that use the fi rm’s printing service for marketing materials in some cases can cut their costs in half, while those that employ sys-tems to analyze energy, telecom-munications and other expense categories can wring out savings of up to 27 percent, Howard says.

But some opera-tors began seeking recommendations for management companies, real estate appraisers or solutions to other, more sophisticated operating facets, she says. Thus, while Senior Liv-ing SMART has laid out a detailed business plan, the founders know that they have to remain nimble enough to tackle problems that the partners didn’t anticipate.

Case in point: Operators have lamented their inability to provide the fami-lies of potential residents with a full scope of funding sources that could help defray move-in expenses or other costs. In some cases, operators are simply uncomfortable bringing up the subject, Catizone explains.

As a result, Senior Living SMART plans to launch a fi nan-cial help desk, which will allow communities to provide families with the information. “That just bubbled up as a need,” says Catizone.

Senior Living SMART also has attracted the attention of real estate investment trusts and equity capital providers

that partner with smaller indepen-dent operators. Austin, Texas-based Virtus Real Estate Capital, a private equity fi rm that invests alternative real estate, owns 19 seniors housing properties and rec-ommends that its operating partners use Senior Living SMART to address various operating issues.

In particular, Aaron D’Costa, director of acquisi-

tions for Virtus, highlights a Senior Living SMART partner that audits food vendors, among other ser-vices. The company, One Manage-ment Solution, compares invoices with shipping orders and con-tracts to make sure that customers are receiving what they’ve asked for and aren’t overpaying.

One Management initially focused on restaurants, and over time it saved clients 10 to 15 percent in food costs. One Management has shown that it can provide the same savings to seniors housing communities, says D’Costa. One Management also pockets a percentage of the savings for its fee, so the service is essentially free to operators.

“That service alone is some-thing that’s new to the industry,”

says D’Costa, who has known Howard for years and is on Senior Living SMART’s advisory com-mittee. “It’s not something from an operational perspective that an operator has time to focus on.”

For founders Howard and Catizone, Senior Living SMART’s early success stories and growing membership confi rm that they’re on the right track to potentially help thousands of independent operators solve problems.

Yet getting the word out to seniors housing communities poses the biggest challenge to the start-up. Paradoxically, operators are spending a lot of time trying to resolve the very same issues that Senior Living SMART is in business to solve.

“It’s hard to get their atten-tion,” says Howard. “Operators are so busy that it’s hard for them to get their head up long enough to realize that there’s help out there. They don’t have to be so busy. We can get a lot of things off their plates.” ■

“There’s a lot of interest in innovation, new products, new technology, and programs and services on the senior housing side,” says Carlene Motto, executive vice president of sales for Belmont Village.

“It’s not some-thing from an operational perspective that an operator has time to focus on,” says Aaron D’Costa, director of acquisitions for Virtus Real Estate Capital.

About the writerJoe Gose is a free-lance writer who has covered com-mercial real estate for 16 years. He reports on indus-try development, fi nance and trends.

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Building on the success of the inaugural InterFace Seniors Housing event this past August in Atlanta, this exciting regional event will bring together owners, operators,

investors, developers and capital sources for high-level information and five+ hours of networking and dealmaking. Leading players from up-and-down the West Coast

will be in attendance, as well as national players active in the region.

• Economic Outlook & Demographic Trends for the West Coast

• Investment Market Update• Development Trends• Capital Markets Update• Operations Issues & Trends• Plus Over Five Hours of Networking

AGENDA TO INCLUDE:

SENIORS HOUSINGW E S T

INTERFACE

Announcing

SCHEDULE AT A GLANCE

WEDNESDAY, FEB. 25Networking Cocktail Reception, 5:00-7:00 pmTHURSDAY, FEB. 26Conference, 10:00 am-4:15 pm

Here’s what attendees at our inaugural event in Atlanta had to say:

“I was impressed with the caliber of people on the panels and in attendance, especially for an

inaugural event”

“Unmatched opportunities to meet in person, the movers, shapers, all stars and personalities

in this industry”

“I found the conference to be extremely beneficial as it facilitated the introductions and

networking with senior leaders and decision makers in the industry. I look forward to

attending the next conference”

“No one had a schedule booked so networking was much more spontaneous which ended

up being more productive than planned networking”

“Panels were more informative than most other conferences”

“More intimate group, very relaxed friendly atmosphere, attendees responded by being open”

“I liked the focus on panel discussions. They

were well-planned and moved along. In most cases, you had a chance to have a conversation

with a panelist after their presentation”