Lifestyle

Senior Living Executive Forecast 2024: Operators Gear Up for a Pivotal Year

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Last year, HumanGood CEO John Cochrane noted how the industry was shifting from a period of crisis to one of stability. This year, his message for senior living operators is even clearer: “Buckle up and start your engines.”

“The new year could bring some of the biggest opportunities in our lifetime,” he said. “We are at an intersection of a seismic and global demographic shift … and we will have tools, resources, and opportunities in front of us like nothing we have ever see.”

At the start of a new year, Cochrane is not the only industry leader gearing up to capture big opportunities in 2024. To learn more about how senior living executives are feeling heading into the new year, Senior Housing News connected with a variety of industry leaders. What follows is the second part of a two-part series sharing those responses:

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Tom Grape, CEO, Benchmark Senior Living

Benchmark had a very strong year in 2023. We finished at 90% occupancy with continued growth expected. Our margin improved, though not yet to pre-pandemic levels, and we realized strong YOY NOI growth. We achieved material growth in net hires, allowing us to bring agency spend to pre-pandemic levels. Our ongoing quality improvement initiatives resulted in increased satisfaction/engagement scores for Residents/Families and confirmed that Benchmark employees believe we are a top place to work. We were able to refinance or extend all of the loans which were due in 2023, and we closed on the sale of two communities with an exciting new capital relationship for us with Ventas.

We completed a major renovation at one of our flagship communities, and have two other major renovations underway at other premier communities. The One Company Fund, a nonprofit established by Benchmark in 2018 to help associates in times of crisis, gave out the most grants ever.

For 2024, we expect to continue to build on the progress in occupancy, margin and NOI growth. We plan to continue to add net new hires as the labor market continues to slowly soften. Our quality improvement initiatives will continue to grow. 2024 will be a major year for technology initiatives for us as we implement electronic medical records, and a human resources information system to improve quality and efficiency. We will continue our renovation program by beginning a rolling refresh program across a large portion of our portfolio. Starting this year and running through 2025, this project will improve our resident experience and keep our buildings as leaders in their local markets.

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Speaking more generally, the dearth of new supply over these last couple of years will continue through 2024 given the state of the capital markets. This will help all operators grow occupancy. We expect to see more sorting out of the strong vs weak operators and to see more distressed assets coming our way from either lenders or equity investors frustrated with poor operator performance.

The prospect of the Fed holding and perhaps cutting interest rates is also good news and may allow select development to resume into 2025. In total, I expect 2024 to be a pivoting year as we get closer to pre-pandemic performance and can turn our attention more fully to offering the next generation of products/services our new customers are demanding and getting capital providers excited again about deeper investments in our industry.

David Eskenazy, CEO, Cogir USA

Prior to the the pandemic, our industry was experiencing massive supply growth fueled by cheap money and investors in many cases pivoting into senior housing as a ’natural expansion’ of their real estate roadmap. Supply was outstripping absorption for many straight quarters but the silver tsunami would solve all of that.

Then along came a pandemic to sober up even to most experienced senior housing investors, and those that just entered the industry were wondering what how they got there. This sure didn’t feel like a real estate investment suddenly.

Inflation, regulation, occupancy stagnation, workforce contraction, outside labor and supply chain problems become our challenges to overcome, which seemingly took forever as the 2-3 quarters turned into 2-3 years.

Ah but finally it all seemed like it was coming to an end only to be met by hyper-inflated interest rates now which have all but brought investors to their knees.

This is the backdrop for our entry point into 2024.

While crippling perhaps for investors, this now brings new development and new upcoming supply into the ‘great pause’ of the next 2-3 years. For many reasons, this is just what doctor ordered for the industry occupancy to catch up. Investments will be measured and pricing shrewd, but for those that are committed to the future, great acquisition opportunities will be available. As they say, one investor’s loss is another investor’s opportunity. This shall be true in 2024.

For our company, our focus will be on swiftly leasing up our new openings, further stabilizing our existing communities, firming up our margins, and bring on more business as many investors are changing operators in the midst of pressured operating results or forced sales.

We will look to focus on top line revenue through absorption and rate management, as well as capturing care revenue. Long ago we identified the discipline it takes to capture care, charge appropriately and focus on staffing efficiency in the care department. Our approach is to isolate the care department revenue and expenses and run the department as a profit center. With labor costs and shortages continuing to be out of balance, this continues to be an emphasis in 2024.

Occupancy success is about ins and outs. Outs are often about satisfaction. During the pandemic, to be honest, it was difficult to provide the jovial, social atmosphere that our companies use to try to differentiate each other. After all, it was hard to bring smiles to faces that we couldn’t even see. How could smiles be infectious when they were either hidden behind masks or behind doors? But it 2024 we can certainly bring back the loving and uplifting atmosphere that brings happiness and joy to our residents and families. This rebirth will be a refreshing foundation for success this year.

Our outlook is still rosy, albeit through roads that were not on the map only a short time ago. 

Alan Butler, CEO, Erickson Senior Living

In the past 12 months, we have had the privilege of welcoming more than 4,000 seniors to our network of vibrant senior living communities across the country. Over the next 12 months, we look forward to bringing this enviable lifestyle to even more seniors. In early 2024, we will celebrate the opening of a brand-new community, Woodleigh Chase, in Northern Virginia. Development is underway on Emerson Lakes, a new community in Sarasota, Fla., and The Grandview, Erickson Senior Living’s first vertical living community, in Bethesda, Md.

There’s no doubt that the environment for development and construction is challenging now. However, we remain committed to the long-term success of this industry because we know that we are solving a great need, as the population we serve will continue to grow dramatically over the next decade.

Even in the face of these difficult market conditions, we plan to invest billions of dollars to meet this demand, maintaining our very selective, disciplined approach, to further expand our national network of communities.

This strategic, sustained growth also creates opportunities for team members. Over the past year, our employee retention rate has increased while our job vacancy rate decreased significantly. This success translates into higher-functioning teams that provide best-in-class service to Erickson Senior Living residents across the country.

One of the most significant opportunities facing the industry is the unmet need for senior housing in many locations. That’s why we are looking to develop new communities in places like California, for example. The first members of the Baby Boomer generation to turn 80 years old will do so in 2026, just two short years away. The next 12 months will be critical to making sure that we are continuing to evolve our product and service offerings to serve this rapidly emerging generation of customers.

In the year ahead, I also expect inflation to continue to create challenges for our industry. Delivering a product that remains affordable in the face of rising construction costs and margin pressures is no small feat. I’m keenly aware that most of our customers live on a fixed income, so working to achieve that delicate balance between cost and affordability will be an important focus for us in 2024.

As we begin 2024, what excites me the most are the opportunities ahead of us. I am eager to bring the active, vibrant lifestyle that we offer to even more seniors because I have seen the benefits it affords, even to my own parents, who have lived at an Erickson Senior Living community for more than 10 years.

We are also excited to bring even more value to residents across the country by continuing to enhance amenities, programs, and services to support their comprehensive health and well-being. From upgraded fitness centers to pickleball courts to meditation gardens, these features are helping residents live even better, fuller lives together as part of our communities.

I’m even excited about the challenges we face because I look at each one as an opportunity to be at our very best. Based on our company’s history and experience, I have tremendous confidence in the team’s ability to rise to the occasion, remain nimble, and adapt to change. In just the last five years, we’ve faced a global pandemic, the Great Resignation, and more— and come out stronger and smarter. As I look ahead, I’m filled with pride and optimism for our future because of our team’s proven ability to evolve and improve. 

Staying agile will remain a key priority for our organization in 2024. The new residents we welcome to our communities will have different needs and preferences from those who moved in even a few years ago. Exceeding their expectations is a daily commitment.

Our team is focused on honoring our brand promises to create a vibrant lifestyle and work environment for all of our residents and team members. That means providing unmatched financial stability and exceptional benefits for those who live and work at our communities – and to make health and well-being a priority. We know our winning culture is a powerful differentiator among prospective residents and employees, and I am dedicated to ensuring we continually evolve without sacrificing the fundamental values that make Erickson Senior Living such a great place to live and work.

This business will always be about people. The sense of community and belonging at our campuses is built on a foundation of strong relationships—team members supporting residents in making the most of their retirement years, and enriching friendships nurtured between neighbors and colleagues. We hear often that moving to one of our communities was the best decision a resident made; many share that they wish they had made the move sooner. In 2024 and beyond, our first priority will remain ensuring that everyone who joins us feels that same way.

John Cochrane, President and CEO, HumanGood

Last year, many of us, myself included, predicted something of a return to normalcy in 2023 following the pandemic: a rebound in occupancy, rent growth, and improved operating margins. We got one out of three. While occupancy did indeed improve, meaningful rent growth and improved operating margins proved elusive for many in our field.

And 2024? The new year could bring some of the biggest opportunities in our lifetime. We are at an intersection of a seismic and global demographic shift, a healthcare revolution in our understanding of wellbeing, and advancements in technology targeting (often wrongly assumed inevitable) biomarkers of aging, and we will have tools, resources, and opportunities in front of us like nothing we have ever seen.

No other field is better situated to pull all of this together into meaningful market responses that address many of the issues our core audience seeks. Mostly we will fail to fully understand and respond to these changes and instead cling to a slice of pie that is shrinking due to our inability to embrace the disruption right in front us—disruption we are uniquely positioned to understand and adapt to. Mostly.

Yet, we have reason to hope. While the past years were discombobulating, we had some success converting chaos to order, realigning our businesses, adopting technologies, and recasting services and pricing to match new expectations and realities. Let’s not waste the lessons of the last few years. For those willing to rethink, reimagine, and refocus, 2024 will be the year of the Great Restart. That’s the macro, opportunistic view.

At the micro operating level, the new year will continue to be a time of rebalancing the core economics of development and operations. If the economy achieves the soft landing that now appears possible, reduced interest rates could spur development of new (and reimagined) products. Labor costs will continue to increase albeit not at the rates we’ve seen in the last two years. Continued pressure on operating margins and increasing costs will lead us to rethink the core value proposition: what our customers want, what they receive, what they need, and what they are willing to pay for.

Cost pressures will severely strain the bundled services that make today’s core product seem unaffordable and unattractive to so many. The unwieldy service bundle has become a Quasimodian hump causing us to lurch from one revenue cycle to the next, working mostly in vain to cut costs and find new ways to charge for services customers increasingly tell us they don’t value. Ultimately, we could see something similar to what happened with the cable TV industry with an unbundling of services, both to control the price point charged to customers and to deliver only items they value and are willing to pay for. Moreover, we will need to more effectively partner with providers of some of these services. Direct-to-consumer opportunities have resonated with customers in other markets (i.e. Lyft and Uber, Amazon, telehealth) and meet needs more efficiently, cheaply, and frankly better, and we should expect to see more of these options in our sector.

While the immediate challenges with labor have abated for now, overall this will continue to be a huge area of focus as core demographics have not changed. Culture, compensation, retention, and professional/career development will be key focus areas for employers and employees. At HumanGood, we shifted from a focus on outside recruiting to an internal focus on developing more talent and opportunities from within—turning first to those who identify with our culture and work, are aligned with our mission, and exhibit a desire to grow a career in our industry.

At both the macro and micro level, the intersection of technology and healthcare will create the greatest changes and opportunities in our field. Increasingly, we are seeing a shift to a more informed consumer seeking personalized, qualified health span improvements with a real, measurable, and sustainable connection between services delivered and outcomes realized. The vapors and vague promises that have sustained us to date simply do not work and an increasingly sophisticated and skeptical consumer will not adopt and will not pay for an illusory promise. We need to show sustained, desired outcomes delivered efficiently in order to effectively compete for the new customer dollar.

Undergirding all of these changes is the need to significantly increase technology investment. Existing and emerging technologies will help us improve services, address unmet but critically important needs, provide services more efficiently, and reach people we are currently not able to reach via a purely real estate-centric sales model. In-home technologies give us the opportunity to build connections with customers long before they ever move into one of our communities, if indeed they ever do. Reducing costs, improving outcomes, and attracting new customers and the revenue streams attached to them will be increasingly vital to sustain organizational strength. The change we have been predicting is here and it is time to embrace innovative solutions that will help us grow our mission impact in new, exciting, and sustainable ways.

2024? Buckle up and start your engines.

Rob Liebreich, CEO, Goodwin Living

Access to care will continue to rise in value. One of the new realities is that there are not enough caregivers or places to receive quality of care, and therefore programs which offer guaranteed access to future care, like our Goodwin Living at Home program, will be sought out more and more by savvy consumers.

Demographics indicate it is not time to rest on becoming an employer of choice in your market. Yes, the market may seem like it is giving us some relief from extreme recruiting efforts, however, 2024 is the year to solidify your claim as a top place to work. One way Goodwin Living through our Foundation plans to do this is starting in January to offer to repay clinical school debt up to $5250 a year per team member.

2024, the year of the intentional welcome. This year more than ever before our organization will seek to offer an intentional welcome to those we serve and those who serve. We will welcome in more interns from high school and colleges around us so we can secure our future workforce; we will welcome more team members with tenure to stay in service longer; we will welcome in more refugees and immigrants into our workforce because we know we cannot provide our services without these important populations, and we will welcome the most diverse group of older adults into our service as our region continues to see a growing population of Black, Asian, and Hispanic older adults. 

Brandon Ribar, CEO, Sonida Senior Living

In 2024 and beyond, owners and operators with access to capital should expect significant growth and expansion opportunities as undercapitalized projects come to market either through refinancing or recapitalization catalysts.

The rising likelihood that interest rates will tighten based on recent Fed commentary should set a more certain floor on financing costs and likely improve the availability of debt capital compared to the second half of 2023.

As the Cost-of-Living Adjustment tightens substantially against the previous two years, operators will face important decisions around market and in place resident rates.

Improved occupancy for the industry combined with ongoing demand increases and limited new supply should support the type of rate growth required to move margin once again in 2024. The use of technology to support more efficient operations and provide more advanced and personalized services and programming for residents also supports a higher price point on rent levels and more efficient operating models.

The industry continues to face confusion around the difference between independent and assisted living as the demographics and needs of our target markets evolve. At Sonida, we are investing in distinctive programming, like Joyful Living, to give our independent living communities a cultural upgrade that allows them to stay competitive with CCRCs, active aging communities and newer facilities.

As the care continuum tightens, we are focused on enhancing the healthcare services we provide in independent living to better support the unique and changing needs of our residents, allowing them to age in place more safely and comfortably.

With so many technological solutions available, we are interested in technology that can leverage the expertise of our team members to create operational efficiencies and refinement. We have used this model to build homegrown technology solutions that have already made a significant impact on labor management, staffing, employee retention and employee and resident satisfaction. Moving into 2024, we are excited about expanding those programs and looking for additional, innovative ways to use technology to establish genuine operational excellence that sets Sonida apart from other operators.

Chris Belford, CEO, Sinceri Senior Living

As Sinceri Senior Living enters a new chapter in the senior living industry, our focus remains on strategic planning, innovation, and a commitment to providing exceptional care for our residents. The coming year presents both challenges and exciting opportunities, and we are poised to navigate these dynamics with a forward-thinking approach.

Our growth strategy for the next 12 months revolves around the expansion of partnerships with various equity stakeholders. We are actively exploring innovative deal structures that ensure substantial equity participation. This approach is not only a key driver for our expansion plans but also underscores our commitment to fostering strong, mutually beneficial relationships. Additionally, since occupancy is above our pre-pandemic levels we are focusing on margin improvement. Lastly, our growth strategy continue to focus on opportunistic acquisitions and dispositions. If the capital markets show positive signs in 24, we will be looking to exploit opportunities.

Undoubtedly, staffing remains a critical challenge in the senior living industry. At Sinceri Senior Living, we recognize the importance of building and retaining a dedicated team. Our strategy involves not only expanding our recruitment efforts but also creating an environment that promotes employee retention. We believe that a committed and well-supported team is essential for delivering the highest quality of care to our residents.

While the challenges of 2020 and 2021 are not replicated, we anticipate a moderated growth in expenses, projected at around 4% annually. Our financial strategy is grounded in prudence, allowing us to navigate the financial landscape while maintaining our commitment to providing exceptional senior care. We believe that a careful approach to expenses is essential for the long-term sustainability of our organization and we seek help from our 3rd party vendors that can help build efficiencies within our organization. We will be looking for technological solutions and the integration of AI in senior housing that allows for predictive indications for our resident experience.

As we approach the new year, we acknowledge concerns, particularly around ongoing staffing challenges. However, these concerns are counterbalanced by our excitement for the evolving landscape and the opportunity to serve a new generation of older adults with innovative offerings and services. Our forward-thinking outlook positions us to embrace change and capitalize on exciting possibilities.

Looking ahead, our top priorities for 2024 revolve around sustainable growth, robust staffing solutions, and the well-being of our residents. We are committed to navigating challenges with agility, maintaining excellence in care, and embracing the opportunities that lie ahead. As the senior living industry continues to evolve, we remain steadfast in our commitment to providing exceptional care and shaping the future of senior living.

Greg Roderick, CEO; Kandice Alcorn, COO; Frontier Managament

Roderick: 2024 will offer a better environment for operators as we have made many adjustments in our practices that will generate better results for all stakeholders including residents, team members and clients. Furthermore, interest rates will make a steady decline that will return borrowing opportunities, improved valuations and expansion capabilities. Finally, operators are likely to make a return to their abilities in participating in impactful efforts related to Industry Associations, fundraising and environmental awareness campaigns. 

Adopting healthcare models to support our residents in their evolving needs for new interventions while enhancing our hospitality experiences has been fully integrated into our operational model. We have termed this the Frontier Advantage Network and our curated regional provider network has proven positive for our team to call upon for a wide variety of services that address changes of conditions. Further, our network of vendors have dramatically improved our hospitality format in culinary, life enrichment and environment.

Our associates or team members are the key ingredient to a successful business. Operators have made the right decisions to increase wages, increase learning and skills development opportunities, and to improve the quality of life of the team. For those seeking a career path in healthcare and a place were living wages, excellent benefits, a healthy work-life balance and a satisfying job that fills the soul can again be found in seniors housing. This will continue in the new year.

Operators are embracing customer service and loyalty with the clients and this is a positive shift. Teaming up and collaborating with clients and lenders has not always been the format of these relationships but now the value of the partnership approach is taking hold with far better outcomes. Our clients are a key component to our business model and we appreciate them. And, they know it.

Operators will continue to be more and more engaged in associations,

Organizations and other groups to help steer the evolving world of seniors housing, political decisions that directly affect our communities, and with our impact upon the environment. At Frontier Senior Living, we encourage involvement in state and national association initiatives, board positions and fundraising. We are working on environmental initiatives such as energy saving panels, minimizing use of styrofoam, and water conservation efforts. These and others are being implemented by many operators and I see more of this in 2024.

Finally, after 4 very challenging years (COVID, staffing shortages, inflation and credit crisis) there in an overwhelming sense of optimism that felt across our profession and we are no longer viewing each other as competitors but friendly participants who are in this together and who want to establish a better tomorrow for the next generation to embrace and carry our industry forward. 

Alcorn: Additionally, I feel the industry will see a lot of changes over the next year. As the financial market moves in a more positive direction, I believe the industry will see more mergers of operators and new operators moving into the space from multi-family and skilled nursing.

Staffing will continue to be one of the largest challenges. Even though agency use has decreased across the industry, and operators have increased wages the influx of governmental influence on wages by driving minimum wage up to $20-25 per hour in a number of states over the next few years will pose a new challenge for staffing. This time it will not be based on the availability of staff; it will be the impact of wages on overall margins.

Overall, I would say the industry is stronger as a whole moving into 2024. We are seeing more collaboration between operators. Our industry association partners are stronger and more active today assisting operators regarding staffing, and regulatory challenges. Additionally, our vendor partners understand the impact the last 4 years had on the industry and are coming through strong with pricing and products to assist us to improve margins and provide quality service to residents.

Doug Leidig, CEO, Asbury Communities

We have a few bricks and mortar growth opportunities we hope to have finalized by the first quarter of 2024, and we are looking at the IL/AL business model with much less dependency on skilled nursing. That’s a trend across the industry, of course.

For 2024, our top priorities will be optimizing our operations, building cash reserves, and growing our diversified business lines. ThriveWell Tech has transformed itself from primarily offering MSP to helping providers plan for and achieve digital transformation, take advantage of RPA and data harnessing, and implement business systems automation and software such as NetSuite. They’re moving into new industries beyond senior living, including hotels.

In 2023 we finalized an acquisition of 2 new LIFE Centers in Pennsylvania, bringing our total number to 6, and we will be looking to increase admissions and optimizing the operations for LIFE. Through Edge Therapy we offer management services for providers who want to “in-source” their rehabilitation services.

Albright Pharmacy, which came through our affiliation with Albright Care Services in 2020, has been implemented in all our Pennsylvania and Maryland communities, which necessitated building out a pharmacy fulfillment center at our Gaithersburg community. All of our skilled nursing and assisted living residents use Albright, but independent living residents have a choice – so our focus in 2024 is to continue growing adoption in that market. I think there will be ample opportunity for organizations to grow, but unfortunately, we still see many starting to look very late in the game. Because of that, they require substantial capital investment,

creating challenges for buyers or potential affiliation partners. I believe a majority of growth for our industry will be acquisition/affiliation rather than green fields because of high material costs and ongoing construction labor shortages.

You asked what most worries us, and it’s access to capital. Banks and lenders are starting to really tighten their requirements for our industry to borrow money. I believe if we continue growing through acquisition, the ability to borrow capital will be extremely tight, and banks may be highly conservative about the amount we can borrow. This is why I believe we will spend more time in 2024 expanding our current business lines.

We’ll continue with workforce-related issues, but I feel confident that they are starting to flatten out as wage increases and the job hopping we saw during and after the pandemic have stabilized. At Asbury, we are having success with hiring new associates and our retention rates have dramatically improved over the past year, thanks to a hard focus on that. We made changes in several areas, including our Belonging culture, enhanced benefits, and recruiting software and processes. We set a goal to reduce our turnover rate to no more than 42.5% and exceeded that by 4%.

Dwayne Clark, CEO, Aegis Living

I’m really, really bullish on where we’re going to be in 18 months from now. Super bullish. You’ve had this lack of new development in a period that’s gone on for almost five years. We all know what’s going to happen at the end of ‘25 and the beginning of ‘26: The first baby boomer turns 80 years old. A five year hole in the development cycle — that’s going to be huge.

We’re planning for two interest rate cuts at 25 basis points that come in toward the end of the year. So, this can only get better for us now. That’s the opportunity.

We really focus a lot on employee wellbeing. I just think that’s critical. We’re seeing that becoming a bigger and bigger issue for staff. Mental health crisis is going up, suicide is going up, and the whole wellbeing issue is critical.

I think the employee work-at-home [outlook] is going to change dramatically. I think people thought in the beginning, “This is a huge win, I can work from home and I can be with my dog or my kids or whatever.” And I think people are missing the community and socialization piece of the office place more than they thought they ever would.

There needs to be an empathetic understanding of the Gen X workers. It’s a very different workforce and they have very different viewpoints and millennials and Gen Z do, they’re different in their own right. I think having empathy towards that and understanding and listening is super important.

I think volume creates opportunity. If you have more seniors, you’re going to have more niche markets.

We have to go into 2024 with our eyes wide open and hope for the best, but plan for the worst. If you do that, you’re going to be fine, because if you get to the other side in Q1 or Q2 of ’25 and you’re in good shape, you’re not crossing the finish line bloodied and beaten. I think tour and move-in velocity picks up and that’s a very good thing. Demand is over-stripping supply right now. I think you’ve seen margin improvement with that as well.

But we have to see what interest rates are going to do, that can’t be understated. If these banks start collapsing under the weight of debt that they get back on their balance sheet, it’s going to be problematic for a lot of people. 

Gary Smith, CEO, Vi

In 2023, the theme of Vi’s holistic Living Well program was “Nurturing Resilience and Optimism –Establishing a Positive Mindset.” That theme was the framework not only for our lifestyle programming, but also for the many initiatives we rolled out across our 10 communities. What a perfect theme for the senior living industry as we continue to recover from the challenges we have been facing over the past four years.

Vi demonstrated resilience in 2023, and we are grateful for the dedication and commitment of our team members, as well as the support of our residents. We are fortunate to not carry debt, other than short-term construction loans that are fully repaid when the projects are complete. This conservative approach allows us to focus on continually enhancing our resident experience while still improving our own key financial metrics, which are outperforming budget for the year. Occupancy is at 90 percent across our 10 communities, and we expect it to continue to grow.

We’ve seen a return to pre-pandemic normalcy across our operations, which has enabled us to move a number of significant initiatives forward. We’ve continued to reinvest in our communities to ensure they can stand next to anything newer in their markets. Even with higher construction costs, we have maintained our reinvestment momentum. In 2024, our Vi communities in Scottsdale, La Jolla, Highlands Ranch and Hilton Head will continue and complete major renovations and remodeling to their common area spaces. Also in 2024, we will complete a $170 million phase of development at our Naples, Fla., community, expanding and renovating our care center venues, and opening 64 new Independent Living homes with entrance fees that average over $3 million.

Staffing: A key priority for us has been, and continues to be, recruiting and retention, a challenge that hit our industry harder than most. I’m pleased with the improvement Vi has made on this front. We prioritized speed to hire and implemented innovations like a new, unified platform for applicant tracking, candidate relationship management, onboarding, and career site, enhancing efficiency and providing candidates with a more enriching experience.

We’ve filled key positions across the company, and staffing and turnover are back to pre-pandemic levels. We released our inaugural REDI report, an assessment of our efforts to foster Respect, Equity, Diversity, and Inclusion, and look forward to continuing this journey, with the current focus being on addressing unconscious bias in recruiting, hiring, and retention. We place a premium on staff retention and engagement at Vi, and I was gratified that all of our communities and corporate office were certified as Great Places to Work in 2023, and we were again ranked by Fortune as one of the top five Best Workplaces in Aging Services.

Employee Communication & Development: We recognize the integral role of employee communications and a commitment to learning and development in retaining our valued employees. Vi’s internal communications platform, ViHive, accessible to all employees via smartphones or computers, experienced an 80% usage rate, affirming its value as a vital tool for employee connectivity. Our relaunch of enhanced leadership development cohort programs in 2023 was also a key element in our retention strategy for our communities and corporate office.

F&B: Excellence in dining has always been a brand pillar for Vi as we strive to fulfill our mission of bringing hospitality to senior living. We’re known for our great dining experiences. We also know that resident preferences around dining are shifting, and we expect this to continue. One-size-fits-all formal concepts are declining in popularity. In our yearly survey of all residents, we found that a growing number are interested in having a variety of dining opportunities, including casual and fast-casual options. We responded by implementing Fast Casual restaurant concepts at six of our communities and will expand this offering at additional communities next year. We are also piloting a new Grab & Go concept that will provide all-day access for residents to pick up meals and enjoy them at their convenience.

Technology: Technology continues to be a priority. That said, we tend not to chase every shiny object and don’t anticipate replacing our valued team members with robots any time soon – ours is a high-touch industry. We have, however, identified ways to leverage technology as a way to effectively engage residents. Our disciplined approach to validating the effectiveness of tech-based solutions was seen with a recent Virtual Reality case study pilot that showed statistically significant improvements in a variety of areas related to the wellbeing of Care Center residents. Based on this success, we plan to roll out VR programs at more Vi communities in 2024. Our Vi at La Jolla community is launching a new study of fitness equipment combining aspects of brain health and balance training. We see this “dual tasking” as the next wave of senior fitness engagement and are excited to pioneer these offerings.

Industry Challenges: On the eve of 2024, one of the biggest challenges for many in our industry is surviving our elevated interest rates. Even as occupancy levels have continued to rise across the industry, many companies in the senior living space have not been able to keep pace with rising expenses, which now include significant debt costs. This could play out over the next year in a major way, as loan maturities come due, which will result in both challenges and opportunities. As this occurs, we of course need to continue to keep our residents our top priority.

Lack of development financing also will remain an industry challenge in the near future, while we wait for interest rates to fall and for margin recovery to be sufficient to cover the inflated costs of new construction. Lack of availability of capital at rational terms will continue to impact Vi’s development plans in the short term. In the meantime, we see growth opportunity through selective acquisitions. We will continue to remain conservative, but will be actively seeking opportunities.

Outlook: The bright shining light for our industry is the pending wave of retiring Baby Boomers. Those on the front edge of this group are now 77 years old. Vi’s customer typically moves in at 80-plus. The number of Boomers coming down the road is mind boggling, with predictions that the U.S. population over 80 will increase by 8 million in the next 10 years and by over 12 million in the next 15 years. In 2023, we commissioned a study of 2,000 individuals aged 68 and above with a net worth of $500K and above. It revealed some key attitudinal shifts and preferences among Boomers that will inform how we market to, and serve, this group going forward.

In 2024, our Vi Living Well theme will be “Living Well Through Relationships-Connecting to Others for Social Fitness.” This is an evidence-based approach influenced by research demonstrating the connection between seniors who have strong relationships in their lives and are socially fit and positive outcomes in areas of mind, body and spirit. I give our Living Well team credit for identifying another theme that’s spot-on with the times. Relationships and connectivity, in all their forms, have never been more important to us as we work together to serve our residents, build community and move forward as an industry.

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