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When CEO Paul Boethel took the reins at Watermark Retirement Communities in April, he outlined a strategy to help the operator find its footing before turning back to external growth.
The Tucson, Arizona-based senior living provider implemented multiple changes in sales and marketing this year, including using a centralized call center for inbound leads and expanding its wellness and value-based care services for residents. The company also is reevaluating how it charges residents for the care it provides with an eye on expenses.
Watermark has in recent years shrunk from its previous roughly 60-community mark down to 38 communities as of August. But thanks to the company’s improvements, Boethel believes 2026 is the year the company will again pursue external growth.
“We’ve got a handful of development opportunities that we’re already working on and looking at now,” Boethel told Senior Housing News during a recent appearance on SHN+ TALKS. “More broadly, our growth strategy will consist of development, but also, as acquisition opportunities present themselves, we are certainly open to that as well.”
SHN is pleased to share this recording and transcript of the SHN+ TALKS conversation with SHN+ members.
In this conversation, you will learn about:
- Watermark’s ongoing pivot from “shrink” to “grow”
- The company’s latest efforts to improve sales and marketing
- New staffing and technology efforts improving operations
- When Watermark might return to its development roots
- And more
The following interview has been edited for clarity. Scroll down to the bottom of the page for the full video of the SHN+ TALKS interview.
Tim Regan: Welcome back to SHN+ Talks. We have Paul Boethel, who is CEO of Watermark Retirement Communities. Paul, I’m excited to have you here. Let’s start with a big scene-setting question. The last time we spoke at length was in August. We wrote a story after that where basically the gist of the story was Watermark has a shrinking-to-grow strategy, where essentially you’re resetting and refocusing the company to pivot back to growth. At the top of your list were things like reorganizing your sales and marketing.
I remember you talked about doubling the size of your financial planning and analysis and asset management team. You, like a couple others in the industry, are taking a specialized approach to operations where you’re going into communities that need more attention and basically giving them that more support so they can improve their operations. How has all this gone?
Paul Boethel: Thanks, Tim, for the time to share our story and progress. I’ll say things have gone very well. Keppel acquired full control and ownership of Watermark back at the end of March, and so that new period started really in April when our same-store portfolio had about 86% occupancy. After about seven months, we ended October with just over 90% on that same-store pool. We’ve done well with what we’ve been able to accomplish so far and have outpaced NIC averages on sequential monthly growth by a little over two times. We’re very optimistic with where we are currently and where we’re trending.
It has come with a decent amount of change, the handful of things that you mentioned there. We did add a number of sales and marketing resources early on, made a handful of changes on our financial planning and analysis (FP&A) side and asset management side. We really have invested a pretty significant amount into the company in a lot of different areas.
What I’ll say about the shrink-to-grow strategy is – and that can mean different things to different folks – but what it means to us is when the new team started back in April, we said, ‘Look, we really need to have an intense focus on our existing pool of assets.’ We recognized and knew there was going to be a lot of change, and so to add distractions of external growth can be a little bit of incremental friction to that immediate objective of your organic business, your in-house business.
We really shut off any external growth for the last seven months and have been focused on the core business. That shrink-to-grow comes into play because if you’re not focused on the external growth, that won’t happen, and inevitably, transactions occur. Assets sales, they have operators in tow. We, like anyone, will be a net loser of assets if you’re not focused on growing. That was really the first seven months. We were focused on what we have in place.
We have naturally had assets go away. Now that we’re over 90% in our same-store business, we have started to look at leaning toward some external growth, which will be part of 2026. We’re excited about that and do think that with a number of the things that we’ve put in place, that we can bring and add value.
Tim: That’s great. We’ll talk a little bit about that growth today. I think you actually answered my next question, which was to dig into the shrinking to grow strategy. Is there anything else that we haven’t talked about yet that you’re undertaking at Watermark that’s exciting or interesting that you’d want to share with us?
Paul: Yes. I think with any good operator, they’re always evaluating what is the next thing that they’re implementing. There is a finite amount of money, and sorting through where you’re going to get the biggest return for the different things that you’re doing. Like I said, our big focus has been around increasing pace, being more data-centric as an organization, and investing in our systems.
We’ve spent a lot of time understanding the current metrics that we have and thinking about what are the right metrics or different metrics that we want to incorporate in that. We’ve learned a lot over the last six months, and we’ve started implementing some incremental changes and adding some new systems. We’ll continue to do so as we get smarter about the different metrics and how to measure and report on those.
For example, in sales and marketing, about a month and a half ago, we rolled out a pilot program called Catalyst, and it’s an inbound call center. We’ve had great success with that.
On the labor side, we’re just about to roll out a pilot program for our new labor scheduling system. I know a lot of people use OnShift. We don’t currently, but we are switching that direction just to get better visibility and alleviate some of the staffing and scheduling challenges that just exist naturally. Also, we are rolling out some new applicant tracking systems that’s better integrated with our HRIS [Human Resources Information System] system.
We do have a lot of focus and effort around improving the employee-associate experience within the platform. We think that that’s very helpful on a number of different fronts. Not only economically, but also with the associates themselves and the experience they have as an employee. Those are just a few.
A big part of what’s important to us is making sure all of our systems can talk to each other very quickly. We’re evaluating systems that might not have that capability or might not be able to as quickly get the information that we’re wanting to look at.
Tim: Something that I’ve seen a lot of operators talk about recently is senior living plays this really important role in the healthcare continuum, in that a lot of operators have embraced this idea that our role is to keep residents well for as long as possible. There’s business sense in that.
From a resident perspective, obviously, it’s great if you’re well for longer and you have a better quality of life, but from a business perspective, if your resident does not need to go to the hospital, if your resident can stay in your community longer, that’s more months in your length of stay, that’s more months that they can pay rent, and that’s more months that they’ll have a happy life that’s not being spent in the hospital.
All of this is to preface this program that Watermark has called 360Well, which is, I think, both meant to help welcome residents, but also keep them well when they live there. Can you talk about that? Also, the oldest boomers are turning 80 next year. What do you think they want from senior living operators?
Paul: First, I’ll say, by and large, our industry does an exceptional job of delivering really high-quality care to our residents just very generally. I think everyone does a really great job at that. As we think forward to what that’s going to look like in the future, we’ve created a branded program that we call 360Well. It offers a modern, individualized approach to healthy aging across independent living, assisted living and memory care. The goal is we want to meet every resident exactly where they are, and that’s important.
I think that in the past, as the needs of the residents have evolved, I think initially it was a lot of, here’s the programming for the day and come join us. I think that it will continue to be a more curated type of personalized wellness. Maybe I’ll call it a prescription wellness shaped by each individual’s preferences. It includes resident experience, health and wellness, and culinary. They’re all part of that combined prescription about what’s right for each person.
Watermark does tend to have a little bit larger communities, and so we can have a few more FTEs supporting some additional things that we’re doing. From salon and spa services to group and one-on-one personal fitness programs that reinforce active aging and longevity, all these things vary and differ person by person. We are focused on curating a special, individualized experience for each resident.
We’ve tried to integrate and bring in as much to the property as we can. We have some onsite primary care and physical therapy. We’ve partnered with groups like Curana, where we’ve brought them in, and it brings a different level of expertise and capability. You can’t do that in all properties, but where and when you can do it, it certainly adds, and it’s a bit of a force multiplier in the capabilities of the property. All those things combined, I think we create a really good, valuable experience for our residents. I think most importantly, we’re open to what the needs are and we adapt to that as opposed to trying to drive and force the paradigm in one direction. We can be pretty flexible.
Tim: I want to actually clarify something because I think this is really important for our audience. You mentioned Curana. Correct me if I’m wrong, I’m assuming what you’re doing there is Curana is coming in, providing services that can be paid for through things like value-based care payment arrangements. That way, you’re able to offer services in your community. You’re not paying for it as an operator. There’s a payment mechanism, residents are happy, you’re happy. I’m assuming that’s what you’re talking about, right?
Paul: Yes, that’s right. It just gives an incremental service, whether it’s provided by us or someone else, in the same way. A lot of people will partner with a home health agency in the local area. It just gives different needs, it gives different options.
Tim: I want to dive into something else that you had mentioned a little bit ago, which is sales and marketing data. What kind of data are you looking at and tracking? Then can you unpack some of the decisions that you’re able to make using that data that help improve what you do?
Paul: Yes. First and foremost, I think one of the things that we did is switched to and incorporated daily dashboards and daily leaderboards. That dashboard was intentional, and it is outward-facing, meaning that it goes out to our executive directors and our salespeople, and then obviously leadership. That very simply is leads, tours, move-ins, move-outs. Then lead-to-tour, tour-to-move-in, and lead-to-move-in conversion ratios. All those metrics we’ve identified as these are the important metrics for the field-facing part of the organization, and those go out every day. That’s created a level of insight and visibility that we think is very important.
Now, what we are also doing is not necessarily field-facing, but for our marketing team and our sales team, we’re stepping back from leads, and we’ll have a different leaderboard that focuses on the wider parts of the sales funnel that go higher and higher than just leads. At the very top of it, you have dollars, and then dollars result in impressions, and impressions result in engagement, and engagement result in inquiries, and then you get leads.
What we’re working on now is identifying, you might have 10 different marketing channels. We’re trying to identify the three most important KPIs for digital. We want to track that not just from once you capture the lead, but we want to track the funnel from dollars to impressions to engagement, and identify exactly what those metrics are but not have too many of them because then it does become overwhelming and cloud the story.
We’ve disaggregated the sales metrics, and we feel good about where we are on those. Now we’re applying the same funnel or pipeline progression thinking through the marketing and trying to be a little bit different than how we might have done it before. That’s in process and working through that right now on all the different channels within marketing.
Tim: You talk about that balance of local autonomy and knowing the market, but then also what you can do centralized at scale with regard to the call center.
Paul: What’s really powerful about the inbound call center is what you end up benefiting from if you end up giving the gift of time back to your salespeople at the property. While I do agree that the salesperson at the property is better educated and better capable of sorting through 10 different leads and being able to pick out three of these bad leads or two of these bad leads, I do think that person is better equipped to do that. However, where I want my salesperson spending their time is developing good leads and closing those leads.
With the inbound call center, you really do get a big benefit from getting every call answered. Our pilot program, we’ve rolled it out at eight properties. What we’re seeing in our call center program is, on average, all calls are being answered within seven seconds. Just starting there, I know just from a volume standpoint, I’m going to capture more leads because I’m going to be there to answer the phone.
Then from there, the average time that it takes to answer the phone and/or get back to that person is about six minutes right now. The inbound call center that we’re using, which is Catalyst, is doing a great job in that they not only take calls, but they’re trained a step further to where they can actually schedule and set up a tour to go along with that at the same time. In the month and a half that they’ve been in place, we’re seeing our lead volume go up, our tour volume go up. We haven’t tracked hours in the selling zone by our salespeople, but we know that just by definition, that’s also going up.
We like that trade-off relative to the if the person answering the phone might not be as experienced in sorting through qualified versus unqualified leads. We’re okay with that because we do get the benefit of that sales. The effort of that salesperson is much more focused on doing sales. Now, our lead-to-move-in ratios have gone down a little bit, but that is largely because our leads and tours have increased. It takes a month to two months for that once you get the lead to get the move-in. We’re seeing the right metrics increase in the right ways, and so we’re very encouraged about what we’re seeing so far.
Tim: What do you make of the ongoing shift to “AIO” in digital marketing? If I’m a senior living operator and I’ve put all this effort into SEO and my marketing, and now suddenly everything’s pivoting toward these AI-powered answer engines, what does that mean for me? Does this worry you?
Paul: With the incorporation of AI, the different capabilities that are out there, it is going to dramatically change how marketing is done. I was just saying a couple weeks ago that someone asked me the question: ‘What do you see as the area that has changed the most in senior housing over the last 10 years?’ Marketing and healthcare are probably the two biggest areas of change.
Look, SEO is still important, given our older audience. However, at Watermark, we’ve already started heading down the path of thinking through how AI impacts our marketing efforts. Back to what I was saying earlier, you track the dollars coming in and the impressions and all of that. To get better and more precise on that, it’s going to require being smart in the AI world. There’s a lot of things where when people search in ChatGPT, it goes through and scrubs things like FAQs on your websites.
Some of it is as easy as updating the content in your FAQ pages and making sure that you’ve got important, pertinent buzzwords in there that attract the audience that’s looking for senior housing. Then there are far more complicated aspects of it that work in the background. All of those things, you’ve got to weigh the cost along with the capability. Yes, the AIO strategy has now taken a front seat next to SEO as something that we are regularly talking about in our marketing meetings.
Watermark has historically done more of the marketing effort in-house. We have started to shift to more of an outsourced marketing for some of the functions. In doing so, you’re recognizing and acknowledging that the third-party firms can probably keep up with the change that’s happening in AI a little bit faster and better. We’ve also shifted to that to make sure that we’re not getting left behind. It will be and will dramatically change how this all looks, probably five years from now.
Tim: Switching gears here, I want to also talk about charging for services and how that matches with what residents need. Senior living is an expensive business on the operations side. Can you talk about some of the things that you have done to change your pricing structure and to basically better charge for the care that you’re providing in more granular ways that works for both you and for the residents?
Paul: We changed our overall pricing structure in September. In the past, Watermark had included a certain continuum of care in the base rent, which in turn makes your base rent look higher compared to your competitors who don’t do this. In September, we did pull out that care component so that care resides solely with care and rent is solely with rent. That’s been helpful as an initial first step and something that we’ve already implemented.
Two, we are in the early stages of revisiting the care attribution model. Watermark’s current model is that we don’t do levels of care. Right now, what we do is we are points-based, and so for every point of incremental need is a point of incremental charge. We are on one bookend of what you’re talking about, which is going from four levels of care to seven or eight levels of care.We’re rethinking and relooking at all of that. Not only that, but the number of points behind the different services that we’re providing.
Some of these models were created 10 years ago, 15 years ago, 20 years ago, and the delivery of that same activity, as we’ve learned, sometimes takes less time, sometimes takes more time. We’re looking through that in combination with revisiting our care attribution model to think about how much time we are really spending on each one of these items and making sure that we’re pricing it the right way.
We don’t have a conclusion yet. Our points model, there are a lot of benefits because you can say to the resident, you’re only paying for exactly what you need, but there are negatives to that as well. We’re working through what is the right model. We haven’t landed on that yet, but we’re getting closer, and at some point in 2026, we will roll out what our ultimate model is.
Tim: People are in 2025 talking about affordability in all walks of life, from groceries to senior living. Have your residents had affordability on their mind as of late? How have you played into that in marketing?
Paul: I’d say people definitely do raise affordability, and that is part of the discussion in the discovery and sales process, but I don’t think it didn’t exist 10 years ago. I think we’re more receptive and responsive to it now and are more capable of addressing it. With our current model, you can do things that are more unique to the individual resident.
If they have a higher tolerance or they can afford more, they might choose more of the different options and things that are available, and those that are more cost-conscious might not. If you can give different offerings and let them go the choose-your-own-adventure route, you can offer up different affordable options within the same environment to address some of those needs. Sometimes, what is affordable to a person might not fit within the confines of the property, and then that just is what it is.
On the flip side of that, when it comes to healthcare, I think most people would say, and the feedback that we get is, they want great healthcare. You rarely go to a hospital and shop for the price of what a hospital visit is going to cost. You shop it for the outcome you think you’re going to get. That’s also where we tend to focus, and I think it resonates with residents of, if you can deliver a really high-quality product from a healthcare standpoint, the focus of affordability does fall more into the background than it does if you’re talking about just rent.
Tim: In the past, Watermark has grown via new development. Obviously, that’s very tough to do right now for a variety of factors. What are you thinking about in terms of growth via development ahead, and what do you think it’s going to take to get more development in the ground here in the next couple of years?
Paul: Development has been a hallmark of Watermark historically and we have really developed a lot of exceptional properties, coast to coast. We do intend to continue with that effort. You’re right, it’s still quite difficult right now to find something that works between the cost of debt and the cost of construction, but we’re still doing work. We have people in-house that are dedicated to that effort, laying the groundwork. We’re looking at sites, and we are making sure that we’re positioned such that when those two variables are more accommodating to actually beginning and incurring the cost of the activity of development that we’re ready to go.
There’s a whole lot of work that can be done right now with minimal cost so that when that stuff is all ready, you can just hit the go button. We’ve got a handful of development opportunities that we’re already working on and looking at now. More broadly, our growth strategy will consist of development, but also, as acquisition opportunities present themselves, we are certainly open to that as well.
Tim: Given the widening “investment gap” between demand and supply, how do you think the industry can grow to meet this demand from the boomers?
Paul: The way that we think about it directly is having conversations with other potential developers. We’ve already seen and been talking to more groups than normal that are first-time entrants into senior housing. We do see and are aware that it is attracting more people from outside because they see the gap.
I think a big part of the gap is people are going to have to get comfortable with the acknowledgement that it probably can’t all be done purely within the existing players of senior housing. There’s going to be an inflow of people that are first-timers, and we’re going to need to be prepared for that. Especially as operators need to identify that early, play a big role on the front end of helping with the design and programming of buildings for people that are doing this for the first time. That’s a big challenge.
We’re okay and open to partnering with people that might be their first time. Our preference, though, is that you want to do this and partner with people that can do this at scale and can do a couple a year. There’s definitely a lot of benefit with doing that and educating them. A big part of that is we’ve got to be pretty open and less protectionist about what we do, more open and transparent with others that are looking to get into the industry so that we can quickly close that gap on the information shortfall. It’s really the information shortfall that’ll be our biggest impediment, I think, to meeting the demand of the residents.
Tim: We had a recent BUILD conference a couple weeks ago in Dallas. Omar Zahraoui of NIC was on stage, and he presented a very interesting piece of data that I wanted to share.
He looked at the percentage of construction as it related to inventory. What he noticed was preceding, I think, two or three development booms in the past was a period where construction as a percentage of total inventory fell beneath 1%. We are in such a time right now. What do you make of it?
Paul: I think there’s no doubt that that development five years from now will probably be more than it has really ever been in the past. What that looks like will be interesting. I agree with that. We talk a lot about the aging demographic, but the other thing that we don’t really talk about, I don’t hear as much, is the dependency ratio.
As each family has had, on average, fewer and fewer children, as people continue to age, there are fewer and fewer adult children that are able to actually take care of their parents or willing to take care of their parents. That’s a compounding effect. I do think that the needs are high, the demand will be high, and development will come back. I think the market equilibrium will attempt to try and fill that gap as quickly as possible and that’ll result in an amount of development that we really haven’t seen before.
Tim: Let’s talk about the other side of that, which is staffing. Even though you might be able to get the real estate in the ground, if you can’t find the people to operate the building, your efforts are still for naught. What does staffing look like at Watermark? And generally, what are you seeing in terms of staffing conditions for senior living right now?
Paul: It’s a well-timed question. We had one property that had been using contract labor for the last five months. About a week and a half ago, we had our dashboard come out with zero contract labor, so we’re very happy with that. Part of it is market-dependent. It’s harder to staff in Portland, Oregon, than in Dallas, Texas. I think one of the things that we are using to focus on is twofold.
One is we recognize that turnover happens. As much as we want to address that and fix that, we have to dimension the resources and the activity around the fact that it does happen. That means to constantly be taking in applications and doing interviews, even if you might not have positions available yet, because that can compress the amount of vacancy that you have within a property.
We also, in our hiring, target more people who have an interest in, rather than being maybe at 40 hours, maybe they’re at 35 hours, but have the willingness or interest if shifts come available that they can jump in. You aren’t using more hours. You have more people that are working fewer hours. If something does happen, you can flex up with regular hours or even a little bit of overtime, while not overburdening the people that are already working 40 hours. Working 40 hours and going to 50 hours, it’s a lot more difficult than going from 30 hours to 40 hours. Just emotionally and with the busyness of people’s schedules, it’s a lot easier to do that.
Then the last thing I’d say is I think a decent percentage of the people leave because of just frustration, friction. If you listen to what people are complaining about and improve your systems, systems integration, systems improvement, systems enhancement, all of that can improve the associate experience. If you make their lives easier, they’re more inclined and more willing to stick around. If they feel like they’re not being listened to and they get frustrated, they’ll leave because they know that somewhere, it can be easier and done a different way.
Tim: During BUILD, Frontier Senior Living CEO Greg Roderick talked about a community where, instead of paying higher wages, the operator switched to paying staff mileage reimbursement and solved some staffing issues. Do you have anything similar that you wanted to share along that line?
Paul: Yes. That’s a great example of that. That’s a fantastic example of listening to the associate and solving their problem very directly. I’m sure they felt very heard. It can be as big as that, it can be as small as, we stopped having a home office, send out emails to the executive directors saying, ‘Hey, do this and do this, and here’s this initiative.’ Every two weeks we send out one mass communication. It’s branded. We call it The Current, which is a nice nod to the water in Watermark. It’s a neat branded little thing, but everyone looks for it every two weeks.
There’s a marketing section, a sales section, a healthcare section. Some feedback that we got from our executive directors was, ‘We just feel overwhelmed. We get hit with something every single day, and there’s an ask here, an ask there.’ To be able to pare down some of that and streamline the communication – you can even filter some of the stuff that you think might be more relevant than less relevant – those are other things that you can do to make the experience of the associate just a better experience and more listened to.
Tim: We’re standing here at the precipice of a new year. It really does not feel like that much time has passed, but here we are, almost 2026. What does the coming year look like for Watermark? Tell me about some of the things that you, as CEO, plan to focus on?
Paul: We’ve got a lot of focus on our healthcare segment and thinking through that attribution model around the delivery of healthcare, the cost of it and the structure of it. We’ve got a lot of systems that we are in the process of building out, and those will roll out in 2026. We’re really excited about that. We’ve done a lot of the things that you could do quickly that don’t rely on big systems implementations.
We’ve been really focused on that this year, and while in the background, been doing the big system stuff, and that will come in 2026. From a systems and implementation standpoint, we’ll see bigger things coming out in 2026. Separately, like I mentioned at the top of the call, we have said that we will focus on more external growth now, and so we’ll start to think through that and focus on that in 2026 as well.
Tim: What advice do you have for the rest of the industry?
Paul: I think one of them is, as you think about your investments today into your company, the investments today set the foundation for your capabilities five years from now. One of the biggest investments that we can be making right now doesn’t really come with the cost, but it’s just the learning and exploration of what AI can do for our companies and the business generally, and how that will work its way into the day-to-day going forward.
There’s still a lot of people that don’t really understand it. That investment of time is a very critical component at this point in time because there’s definitely going to be an inflection point in the very near future. If you’re not prepared for that, there certainly will be those that are, and that’ll radically change how things work five years from now.
Tim: Well, we are out of time. Paul Boethel, thank you for talking with me today, and of course, thank you for Watermark Retirement Communities.
Paul: Thanks, Tim. Thanks, everyone.
