New Watermark Retirement Communities CEO Paul Boethel has his eye on stabilization and improvement.
Boethel took the reins last month at the Tucson, Arizona-based senior living operator after founders David Freshwater and David Barnes stepped back from their roles. Now that he is CEO, Boethel is stewarding the operator into a new period of evolution, with growth and better outcomes on his mind.
Today, Watermark has 40 communities in its portfolio, which represents a smaller footprint than it had just a few years ago. Although the company has aspirations to increase that number, a smaller platform also gives Watermark a chance to refocus and retool what’s working to attract and keep residents as a new generation of older adults approaches its doorstep.
“In the last couple of years, we have seen some contraction at Watermark where a handful of properties have transitioned away for a handful of reasons,” Boethel told Senior Housing News. “My first priority is stabilization, looking at the foundation and identifying what opportunities we can invest in to position ourselves for what we perceive as pretty significant opportunities going forward.”
Boethel believes that Watermark’s immediate opportunities lie in three different areas: Improving results at existing communities, acquiring new communities alone or with partners and eventually, development.
Along those lines, he has set a goal to grow the company’s average occupancy to 94%. Watermark and new full owner Keppel have reinvested in the company’s platform in the last 30 days, including by bolstering sales and marketing and asset management teams and providing them with new real-time data with which to make better decisions.
“We’re going to continue to invest intelligently to build on the successes of the past and see a different result, and do that in lockstep with our capital partners,” Boethel said.
Investing in operations to grow occupancy
Watermark has already upsized and evolved parts of its operational strategy in order to meet its goal of hitting 94% average occupancy. Not long ago, Watermark had upwards of 60 communities, but “probably grew a little bit faster than we were able to digest given the changing environment,” Boethel said.
Now, with Keppel as the company’s full owner, Watermark has more ability to inject capital into its operations where needed. And to that end, the company has already devoted “significant resources” to improving its operations, he said.
Keppel’s backing has allowed Watermark to alter and grow multiple teams. For instance, the company separated sales and marketing into two different categories, with the sales teams reporting to Watermark COO Jeff Slichta. The operator also has hired Bob Gollias as senior vice president of sales.
On the marketing side, Watermark hired Sheila Donahoe as chief administrative officer – a role that didn’t previously exist within the company – to oversee IT, marketing and human resources. She brings to the role experience including working as chief information officer at Holiday Retirement and chief administrative officer at Eclipse Senior Living.
“That’s another senior position to help from a strategic marketing standpoint, to be able to dive deeply and create the leads necessary to feed the sales organization,” Boethel said.
Watermark also doubled the size of its financial planning and analysis and asset management team to help the company make better decisions. Among the first things the team did was roll out a daily recap of metrics including leads, tours, lead-to-tour and lead-to-move-in.
“Integration across platforms and across systems, is a huge opportunity,” he said. “The data is there, and we can harvest this data and tell the story in a maybe a slightly different way, or maybe in a quicker way.”
Watermark, like Brookdale Senior Living (NYSE: BKD) and Sonida Senior Living (NYSE: SNDA) is taking an approach akin to sending in a SWAT team to improve community performance. For example, the company might devote a disproportionate amount of resources to a community with occupancy in the 70th percentile range.
The operator is taking a goal-oriented approach to improve results. For example, in order to grow occupancy above a certain point, Watermark’s leaders will examine every “lever” affecting that outcome, such as marketing, move-ins, leads and tours.
“Once we finally get to what we think is the true source of the issue, we then apply incremental resources against that issue,” Boethel said. “That is a bit of a SWAT team approach, but it’s a targeted SWAT team approach and it might not just be one team.”
Boethel’s approach to operations is informed by his time as SVP of asset management at HCP, the real estate investment trust (REIT) that later became Healthpeak (NYSE: DOC). He worked with 25 different operators, and has seen firsthand the power of data and speed in senior living.
“The more informed that your operators are, and the more armed they are with the right information and timely information, the quicker they can react and respond,” he said.
Growth after contraction
As he is preparing the operator to improve its operational results, Boethel is also readying Watermark to take on new growth this year and beyond.
With Keppel now fully behind it, Watermark is seeking new acquisitions along with third-party management agreements in which it would also co-invest.
“We’d rather have good, solid alignment and be an investor with our partner,” Boethel said.
Watermark has in the past grown via new development, and that will continue under the operator’s new leadership. The company is currently focused on “long-lead” development projects that could take years to go from conception to completion. For example, Watermark has an opportunity it is pursuing in California that Boethel said likely won’t be ready to build until a few years from now.
“We’re not going to break ground on anything in the very near future,” he said. “But what I do know is that in the future … that gap between what’s needed and what’s there is expected to grow unless our development pace increases significantly.”
Boethel believes that incoming baby boomers will want integrated experiences they can customize to their preferences. He believes that more senior living operators will embrace technology like fall-detection and AI in the next decade, and that companies will use those capabilities to measure response times in “minutes, potentially even seconds.”
As he ponders the future, Boethel said he is laser-focused on driving better operational results in the now.
“Through data, analytics and systems integration across platforms, we’ll have a much stronger and more nimble kind of operating portfolio platform, not just at our communities, but with the capital partners right alongside us,” he said.
