Benchmark Senior Living CEO Tom Grape has a lot on his mind in 2024 – in a good way.
The Waltham, Massachusetts-based senior living operator has notched a more than 90% occupancy rate in its portfolio of 67 communities. The company is all the while building up the business infrastructure – including by overhauling its electronic health record (EHR) platform and human resources systems and changing its customer relationship management functions – that will be “foundational” for its future, according to Grape.
Benchmark is also forging into new markets. That includes in the Washington, D.C. area, where Benchmark has opened a 150-unit community as part of a larger mixed use development in Alexandria, Virginia. The community is also serving as a staging ground for the operator’s growing push into value-based care with Curana Health and the Serviam Virginia Value-Based Care Alliance.
Ongoing development includes a new community in Mount Pleasant, New York along with two additional development projects on the East Coast. Benchmark also is updating various amenities and features in 30 communities in a capital redevelopment program.
“We’re on fire at the moment and having a great time,” Grape said during a recent episode of the Senior Housing News podcast, Transform. “Our focus now is on our core portfolio and our occupancy, which is back over 90%. Virtually every metric I can mention is trending upward.”
Highlights from Grape’s podcast appearance are included below, edited for length and clarity. Subscribe to the Transform podcast via Apple Podcasts or SoundCloud.
On the Benchmark’s most recent growth push near D.C.:
We opened it in early April. It’s a 115-unit community offering assisted living and memory care. The building is a 10-story structure in a mixed-use development. We’re off to a great start and are very excited to be there. This terrific building has been very warmly received by the community.
We’re in a nice neighborhood niche of Alexandria, which will differentiate it from the others. We’ve got some beautiful spaces in the building. It has an open chef’s kitchen and five indoor and outdoor dining venues. There’s a club room, casual bistro and cafes. It also includes a massage room, fitness center and wellness center – a lot of nice amenities as you’d expect in a new building.
To me, what sets it apart is that it’s a 10-story building in a mixed-use development; a high-rise building with a beautiful roof deck that offers views of the Washington Monument and the Capitol. I’m hoping to get down there for the July 4th fireworks to see them from the roof deck.
The mixed-use development – which I think is a trend we will see more and more in senior living – includes a grocery store, a diner, additional housing, a childcare center and an urgent care center. It has a whole lot of great other uses that complement our community. This is the kind of development we’re looking to do more of in the future and to me, that’s the real distinguishing factor of this community.
Benchmark was not as well-known in that market and yet, when we had the grand opening event, we had our biggest turnout ever at any grand opening we’ve had. We had over 250 people there, and we have been more warmly received in this market than we could have possibly hoped for. The early move-in results and marketing response have been terrific. We were concerned about being a new market for us, but so far, we’ve been very pleased with the results.
Check back in six months to a year, but early results so far have exceeded our expectations so we’re very pleased.
On Benchmark’s efforts in value-based care and :
Serviam has a Virginia alliance of a number of communities. and Curana is part of that alliance. We’ve joined the Serviam Virginia Value-Based Care Alliance. We were pleased to become part of the group and the alliance is in its formative stages but we’re pleased to be part of it and it’s a great fit for our Alexandria community.
To the extent we can make the provision of care easier for residents and more hassle-free –such as by having onsite medical care, seamless electronic medical records, a dedicated coordinator and better coordination with primary care doctors and specialists accessed through the alliance –I think that’s better for everybody. Value-based care makes great sense when coordinated with senior living and I see it as a very promising part of the future of the senior living industry.
We believed that joining the Alliance was a smarter choice compared to attempting it on our own. They have already invested considerable effort in figuring out how to integrate these elements, relationships, systems and more. It seemed much more practical for us to join them rather than trying to pioneer this ourselves. We respect the Serviam team and the careful consideration they’ve put into this initiative. While there may be some initial challenges as we integrate, so far, they have been excellent to work with. Compared to starting from scratch, this approach has proven much easier, and that has been our experience so far.
When I’m thinking about how we can improve the resident experience, [I ask], how can we coordinate care better? How can we improve outcomes? How can we have a better sense of ways to bring specialists in, in a way that we have better information about? Because right now, when people go to the E.R. or visit their specialists, we often have little to no information about the care being delivered or the recommendations made.
With more integration, we can provide better care on our end and work more closely with specialists. That will be a huge improvement for residents, our care staff, and the involved doctors. It will also help improve education; one thing we find is that despite how long assisted living communities have been around, medical professionals still have little idea of what we do or whom we can serve.
I think that’ll be a big benefit. Again, the role various providers choose to play in taking risks will need individual determination. But I think it’s a great improvement, just by virtue of those initial steps right off the bat.
We’re rolling out new medical records throughout our whole company. Now, it’s a big initiative we’ve undertaken, separate and apart from just the Serviam Alliance we’re doing in Alexandria.
That’s a significant improvement in and of itself. It will also position us better throughout our company to participate in other value-based care alliances that may exist, which we may choose to participate in. Clearly, more integration with the healthcare continuum is part of all of our futures. We’re embracing it and looking forward to it.
On Benchmark’s positive operating momentum:
I’m pleased to say we’ve got our mojo back in spades, and I think our business is the strongest it’s been in 10 or 15 years. We’re on fire at the moment and having a great time. That comment is now in the rearview mirror, and we’re enjoying ourselves with everything going great. Our focus now is on our core portfolio and our occupancy, which is back over 90%. Virtually every metric I can mention is trending upward.
Occupancy continues to grow, rates are strong; resident satisfaction is high; associate engagement is robust; and our quality scores are impressive –all indicators are pointing up. Margins are strong, if not fully recovered, and we’re making progress in that area. That’s a consistent message. We’ve reduced agency costs significantly and are nearing stabilization across our communities, with just a few left to address. We’re feeling very optimistic, but our main focus remains on our core portfolio and existing communities.
Additionally, we’re implementing several foundational infrastructure initiatives company-wide. We’re rolling out electronic medical records across all communities and will introduce an HR information system later this year. A facilities information system and CRM change are also on the horizon. These infrastructure improvements will enhance our data management and, importantly, focus on improving the customer and associate experience, which is our top priority.
On growing in a tough development market:
We’re undertaking a major capital expenditure program in over 30 communities, including significant renovations in four and refreshes in about 30 others. This substantial investment is supported by our capital partners. We have a lot going on, all centered around enhancing our infrastructure and existing portfolio.
Simultaneously, we are planning to open another community later this year in Mount Pleasant, New York. We’re also preparing to begin construction on two development projects, thanks to securing the necessary financing—an achievement that underscores our track record and capabilities. We’re feeling very optimistic about our current position and what lies ahead.
We obviously would love to see construction costs and interest rates come down. Yet, our view is that there are certain markets where there’s aging inventory in strong demand. To the extent that we can offer a new product in a strong market, especially when there’s been little new supply brought on, we think that’s a good opportunity. That’s exactly the situation in Alexandria and Mount Pleasant.
On Benchmark’s relationship with capital partners:
Our strategy throughout our history has primarily been a joint-venture model. As a result, we hold ownership positions in virtually all our communities. We firmly believe in the joint-venture approach, which has proven successful over our company’s history. Consequently, we rarely engage in third-party management contracts and have never pursued sale-leaseback arrangements.Instead, we consistently opt for joint-venture structures.
This approach has been foundational in shaping our company, and we remain committed to it. We have partnered with various capital partners and maintained enduring relationships, which we cherish and diligently nurture to ensure their strength over the long term.
I think it’s unrealistic to expect small operators to take on large numbers of communities and expect to get the performance that capital partners must be expecting. I know the terms of some of the new relationships some of those capital partners are imposing on their new relationships are not friendly.
The tenor of the relationships between some of the capital partners and operators has changed in an unfavorable way. I think that’s not good for the industry overall. So, I think it’s even more important to make sure that the values and principles of capital partners and operators are aligned going forward..
On pushing occupancy above 90%:
We’ve kept our eye on the ball and worked very hard at rebuilding occupancy. I believe the way we handled ourselves through Co vid reinforced our strong reputation. We didn’t achieve occupancy growth by cutting rates. We’ve achieved it by enhancing our quality, reputation, and our response during Covid. In the past, we’ve seen — and I’m pleased to report – that we’ve done this the right way, without simply buying occupancy. We’re in good markets with strong assets, and we continue to invest in and improve those assets. People recognize our company’s long tenure and appreciate that we’re investing appropriately. We’re known as an employer of choice, and I believe our focus on quality has paid off.
On staffing in 2024:
We’ve eliminated agency costs and have almost stabilized overtime levels. So for us, recruitment and retention will always be priorities. Internal talent development has become a focal point, aiming to reduce external hiring by promoting more from within. While we’ve always performed reasonably well in this area, we aim to increase our focus on it going forward. This is one of our primary focuses moving ahead.
On operational priorities in 2024:
I’d say we’re focused on two or three things I’ve mentioned. One is core portfolio performance. We want to make sure we continue to execute on improving occupancy and the margin of our existing properties. Secondly, we’ve got a number of key initiatives. We’re rolling out electronic medical records, HR information systems, and a large capital expenditure program. We’re focused on doing those right, ensuring they aren’t disruptive, and making sure we implement them correctly. Third, we’re focused on talent matters as well, making sure that we’re acquiring the right talent and implementing the talent development initiatives I spoke about.
We have some new communities that I mentioned. We want to make sure we’re opening those correctly and getting them off to the right start, and so on. So I think those are really the operational focuses for the balance of this year.