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Page 34 — COLORADO REAL ESTATE JOURNAL — March 4-March 17, 2015
Tom Finley
Senior living, as an asset class, is
operationally intensive in nature, so
creating a design that can ultimately
produce a net operating income target
is of critical importance when consider-
ing a devel-
opment
opportunity.
Optimizing
the efficient
flow of staff
through the
buildings is
a key early
design con-
sideration
since staff-
ing cost is
the greatest
expense
component
within the
operation.
We have seen interesting advances
in technology recently that not only
enhance quality of care for the resident,
but also create efficiencies with staff-
ing. As a key member of the design
team, the operator can help with the
selection of appropriate finishes within
the building, and also ensure ease of
resident orientation, that has an effect
on the safety and overall experience for
the resident.
Additionally, programming space
within the senior living community
that can flex to meet ever changing
market demands, and also evolving
resident preferences, should be an
early programming discussion. This
involves a careful analysis of building
code requirements, local municipal
requirements and sometimes multiple
health department licensure requisites.
Operational related issues also can
become a topic of discussion during
public zoning hearings or with home-
owner associations. It is not unusual
to see misconceptions by concerned
neighbors about how the senior living
community will operate once it is con-
structed. Introducing the operator to
neighbors and other interested parties
at the onset of the process will allow
them to build an early rapport, and
also dispel mysteries and provide trans-
parency as to how the senior living
community will ultimately function in
concert within the community at large.
Moraine Byrne
Savvy developers understand that
program drives the design and the
development of a senior living commu-
nity. Savvy developers also understand
that the
program
cannot be
structured
without the
knowledge
and experi-
ence gained
by engag-
ing quality
operators.
Envision
the process
as a circle
with the
consumer in
the center.
Along the
outer circle
are the components of the process and
the circle is not complete without all
of the components in place. The com-
ponents include market and consumer
research, design and development, ser-
vice and operations planning, financial
planning and validation, and financing.
Market researchers who have a basic
understanding of senior community
operations are an excellent fit in this
process. They bring the early concepts
of what will make a new development
financially viable, coupled with the
expectations of today’s consumers.
Engaging consultants and/or long-term
operators in the early stages of develop-
ment will result in a project that con-
tinually focuses on the consumer and
that will be a viable financial operation.
The operators will have input into each
part of the process including the mar-
ket research, grounding decisions in
reality. And, financial lenders will have
a greater comfort level with the project
knowing that the operators have been
involved throughout the entire process.
Innovation and realistic expectations
can occur simultaneously to the benefit
of all parties. It is a partnership that
will bring forth a consumer-driven
program that also meets the financial
obligations to be successful.
Larry Smith
I often see developers look at ameni-
ties as nonrevenue-generating space.
The truth
is, those
spaces drive
the occu-
pancy, resi-
dent profile
and your
ultimate
revenue.
Future resi-
dents want
quality care
and security,
but they
are more
focused
than ever
on quality
of life: theaters, fitness areas, bistros
and restaurants. The key is considering
program and which amenities really
pay early on. A full understanding of
the program, amenities and how they’ll
be efficiently staffed will drive the costs.
It may kill a project. It’s not about
cutting cost per square foot or reduc-
ing nonrevenue-generating space. It’s
about creating exactly enough flexible
space to support a program that meets
the desires of residents and families.
My 86-year-old mother uses her iPad
more than I do! At BSLC, we are ret-
rofitting older communities with Wi-Fi
and DirectTV. For assisted living and
memory care, plan technology with
your resident, their family and partner
providers in mind. A reliable wireless
system is the backbone for delivering
great care, hospitality, record-keeping
and engaging lifestyle programs.
Experienced operators bring time-
tested metrics like cost per resident day
to budgets for dining, care and staffing.
They use benchmarks and experience
to plan critical startup costs, like mar-
keting, staff ramp-up and training. A
financially successful operation starts
with a solid fill-up plan and training
strategy, so the brand, care and service
are consistent from Day One.
Craig Erickson
After working through several new
building openings over the past few
years at Wind Crest, here are a couple
of tips I
would pro-
vide based
on our expe-
riences.
First, the
developer
should meet
with the
operators
on a regular
basis. The
frequency
of meetings
is more
important
in the sche-
matic design
phase where changes are far less costly.
Based on our experience, every two
weeks is about right early on.
Reviewing furniture plans is impor-
tant because they provide a visual con-
text to help judge room size. The opera-
tor should be well versed in room sizes
of existing spaces from other buildings.
If a 30’ by 20’ classroom/meeting space
is too small in other buildings, how
much larger would it need to be to
improve usefulness? Ask questions like,
“How does the size of a lounge or res-
taurant in a new building compare to
similar spaces in other buildings? For
In what ways can developers involve operators early
on to ensure that new buildings and operating budgets
will support effective, high-quality operations?
Question of the Month
Please contact Pyms Capital Resources or The Highland Group if you would like to participate in the Senior Housing & Care Question, or if you have a question that you would like to see addressed.
It is so criti-
cal that building
designs and oper-
ating budgets sup-
port top-quality,
efficient operations.
Developers and
investors, listen to
your operators!
Elisabeth
Borden
Principal, The
Highland Group
MODERATOR:
Tom Finley
Founder and Principal, Ascent
Living Communities
Moraine Byrne
President, Ontrac
Management
Principal, Covenant Solutions
Larry Smith
President, Bethesda Senior
Living Communities
Craig Erickson
Executive Director, Wind Crest,
Erickson Living