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There is plenty of demand ahead for senior living operators in 2025 and beyond, but that doesn’t mean companies are rushing to expand just for growth’s sake.
Even as demand swells and average senior living occupancy rises, operators must slow down and take a more thoughtful approach to expansion, according to David Jennings, vice president of investments with Atria Senior Living.
Senior living operators should cluster their communities and develop a strong brand strategy for them, Jennings wrote in a NIC blog post in March. To that end, Atria’s approach to growth focuses on acquiring and developing clusters of communities in the markets where it has a presence, with an ideal goal of reaching between six and 10 in any given market.
“It’s very efficient and effective if you can operate multiple buildings in one MSA, one section of the MSA or even in some cases, even in one small town,” Jennings told Senior Housing News.
Regional operations can help senior living companies hone their focus and share resources, and it is a strategy that Roswell, Georgia-based operator Phoenix Senior Living has taken since its founding. According to Phoenix Senior Living CEO and Founder Jesse Marinko, the company’s primary focus lies in the southeastern section of the country.
That growth plan is driven by a combination of acquisition or management opportunities and stems from the number of people migrating to the region, Marinko said. Now, the company’s plan is to further strengthen its presence in a variety of states, including North Carolina and Alabama.
There’s more to growth than just simply acquiring nearby communities. Jennings stressed that having a brand strategy is just as important, both internally for creating a cohesive message for staff so they can fulfill a prospect’s expectations, along with externally to allow for clear pricing plans for varying markets.
McLean, Virginia-based Sunrise Senior Living has done this in its key markets, namely Chicago, the New York City metro area, Los Angeles and the greater Washington, D.C. area, according to CEO Jack Callison, Jr.
“We maintain that reputation through consistent leadership presence, local HR strategies and a values-driven culture that resonates with our frontline team members,” Callison told Senior Housing News. “While not all communities will carry the Sunrise name, all our communities benefit from the same national, highly scalable operating platform, performance oversight and team culture behind the scenes.”
Building out clusters
Among the operators currently building out clusters of communities, particularly in the southeast, is Sonida Senior Living. Chief Investment Officer Max Levy said the Dallas, Texas-based company looks at things differently as an owner-operator, but that didn’t stop it from acquiring 10 assets in the region in 2024.
Before making the acquisitions, Levy said the team primarily was looking to grow in metros with good demographic outlooks with strong population and income growth. That thought process led to the company building a presence on the South Carolina coast and in Atlanta, in addition to its existing communities from northern Florida up to Virginia.
“When we look at that, it’s typically a lot less about sharing community resources, as much as it is about having a regional support team that is sufficiently deep in their markets and efficient in the footprint they cover,” Levy said. ”We don’t want to have regional directors who have to fly across the country, for example, to cover their sites, and then they can’t know their markets.”
Sonida built out support for its six communities in Florida by hiring a regional director local to the northern part of the state, Levy said. By doing so, it gave the company an edge through an established network of contacts to help fill open positions.
While there isn’t dedicated mileage for distancing communities for a regional cluster, multiple operators, including Louisville, Kentucky-based Atria Senior Living, strive to keep these regions between a couple of hours up to a maximum of a one day drive for regional leaders. Ideally, they could drive to two or more communities while still ending up in their own bed at night, Jennings said.
Freehold, New Jersey-based Distinctive Senior Living has built out clusters in three key regions: New Jersey, Florida and along the eastern seaboard. Growing out a regional presence helps the operator have stronger levels of pricing transparency, retain staff by gaining the ability to move them to sister locations and reduce the number of lost leads, according to CEO Joe Jedlowski.
“Instead of losing that lead, we’re then shifting them to that asset and making that seamless for that family,” Jedlowski said. “That’s very powerful within a cluster market. It’s a very different way of looking at things.”
Entering into a new market takes more than just operational readiness, according to Callison. It also requires a deep understanding of local conditions, including labor availability, referral networks, consumer expectations and competitive positioning. Sunrise utilizes a combination of its national operatiomal platform and data to provide regional and community leaders with “highly customized, asset-level business plans based on the unique dynamics of their submarket,” Callison said.
Using this approach, Sunrise can expand into a new region and learn traffic patterns, transportation access and workforce availability with hyper-specificity. For example, the company’s underwriting for new projects includes info on bus and other mass transportation networks to gauge whether senior living workers can easily travel to communities.
The approach Phoenix takes when entering a new market, especially if a new state the company lacks a presence in, is approaching regulatory bodies to “learn the rules of the game,” according to Marinko. This includes learning topics such as the most cited violations for senior living operators, “pinch points” and learning real estate growth trajectories.
That practice helped the company thrive in Huntsville, Alabama, which is outpacing nearby Birmingham in population growth – a fact that only became apparent after studying market trends. Occupancy across Phoenix’s six communities in the state average around 97%.
“If you surveyed operators, 90% of them will probably tell you they hate Alabama, and they would never work there,” Marinko said. “We’ve done fine in Alabama. We understand the rules, we understand the regulations, we understand the checks and balances.”
Strength in sharing
An added benefit from a clustered approach is the ability for regional communities to share resources among each other.
One way Sonida does this is through offering more flexible schedules, allowing staff to pick their hours and the community they wish to work in. The practice is only enhanced through communities being within driving distance of each other as well, allowing staff members to pick up and fill empty shifts.
Phoenix uses a business intelligence program to see where employees live relative to the distance of a community. In the instance of a staff shortage, executive directors can access a list of nearby employees who could be called into the community on short notice
Meanwhile, there is also the floating staff member approach that Sunrise takes. The company utilizes a more flexible labor pool including cross-trained specialists to “ensure continuity of care across nearby locations,” according to Callison. The practice has allowed Sunrise to completely eliminate expensive contract labor from its staffing pool.
And it’s not just staff that benefit from this flexibility, but residents too, as neighboring sister communities partner together on lifestyle events and wellness initiatives to enhance the resident experience.
“A huge benefit of our culture is that our team members realize partnering with Sunrise means they can enjoy a long term, highly rewarding career with tremendous upward mobility given the depth of opportunities in local markets and regions, versus it being ‘just a job,’” Callison said.
Building the brand
Yet another benefit of a clustered growth approach is the ability to build out and utilize various brands to reach a wide variety of prospects.
Atria, for example, has its legacy Atria brand, which primarily focuses on assisted living. It also has Atria Signature, aimed at higher end communities and markets; Atria Park, which focuses on higher acuity residents; and its newer Coterie brand, which focuses onultra-luxury.
“There’s a lot of ways we can look at things,” Jennings said. “So, if there’s something that fits better in our Atria Park brand, for instance it [can be] a tack-on to one of our existing markets. We can really look at any one of those brands as a potential target.”
While Sonida tends to leverage its national brand name, it relies more on local community reputation to fill out its regional clusters.
“Our general experience has been that people choose our communities not because they have an association with a specific national operator, but just because that specific community has a good reputation,” Levy said. “We’ve just focused on building community local reputations, and feel that’s what really drives interest more than someone specifically trying to seek out a Sonida community.”
Sunrise has three distinct segments it markets to: Luxury, premium and middle market. The Sunrise brand is its premium segment, while alternative brands are used for its middle and luxury segments to better connect with prospects in those markets. Despite the different branding, however, Callison said they all share “the same scalable infrastructure” to ensure strong and reliable customer and team member experiences.
