By Tim
Regan | November 18, 2019 New Perspective Senior
Living
New
Perspective Senior Living has a new CEO — and soon, the company might
venture into new product types, too.
The
Minnetonka, Minnesota-based senior living provider is exploring both
middle-market and active adult senior housing, according to CEO Ryan Novaczyk.
“We
think it’s interesting,” Novaczyk said during a recent appearance on the Senior
Housing News podcast, Transform. “We’re kind of in what I’d call the research
phase. We might be getting ready to experiment with a pilot in 2020.”
The
company — which set a goal to serve 10,000 older adults by 2025 — is currently
focused on growth, both in its senior living portfolio and in its culture and
workforce. New Perspective has two projects under construction slated to open
in 2020 (one of which is pictured above). The provider is also in active
negotiations on acquisition opportunities that could add as many as eight
communities to its portfolio by the beginning of next year.
Highlights
of this interview are below, edited for length and clarity. Subscribe to
Transform via Apple Podcasts, SoundCloud
or Google Play.
New Perspective’s humble beginnings in the basement of the
Novaczyk family home:
My dad
had a partially finished office down there, and we were just bootstrapping it
in every sense of the word. He and my mom were going full tilt at this. I had a
full-time job working for an investment bank and was helping out when I could,
and then I later joined the organization full-time back in 2008. Todd
[Novaczyk] was the CEO, he was the secretary, he was the financier, he was the
maintenance guy. You wear a lot of hats. You’re sending your own FedEx
packages. We still kind of do that today a little bit.
But it
was truly a startup that literally started in the basement, and it was the
inspiration of caring for my Grandma Betty that got my parents thinking that
this would be a great business endeavor for the family. They’re doing a lot of
the things that we did for Grandma Betty to help her live life on purpose every
day. And the organization was really founded with that purpose-driven mindset
from day one. What was best for Betty evolved into our mission around putting
residents first and really helped us establish our foundational belief that all
seniors deserve to live life on purpose.
What New Perspective is focused on now:
Growth.
Growing our people and our culture is first and foremost. Continuing to grow
our operational capabilities, growing our development platform, growing our
health and wellness and activity programs, enhance the resident experience,
growing our technology infrastructure. We’ve got to get those things right. And
if we do get those things right, especially on the people and culture front,
that’s what’s going to drive unit expansion and community expansion in the
portfolio. Those are the things that are going to drive occupancy. And those
are the things that are going to drive NOI.
Our
commitment to servant leadership and collaboration is front and center and
everything that we do as an organization. And one of our main initiatives this
year was to really drill down and infuse that servant leadership culture in all
levels of the organization.
ctive
will have completed an advanced two-day servant leadership training seminar.
Our district and local teams have been infusing the communities with the
servant leadership principles since January. And this two-day training and the
homework assignments that come out of it are really going to further accelerate
those efforts. That is laying the foundation and the groundwork that’s going to
allow us to get the right people on the bus and that’s going to facilitate our
path of getting to 10,000 seniors living life on purpose by 2025.
Why occupancy isn’t the only important senior living metric:
There’s so much fixation on occupancy. And certainly, it is one
of the biggest drivers to grow the business. But it’s not the only driver
there.
There’s
lots of other other levers, and we have communities that are running 95%,
occupancy and 36% margins, and communities that are running 86% occupancy and
44% margins and way higher return on invested capital. So we kind of take a
holistic view of the business. There’s occupancy, there’s mix, there’s
private-pay, there’s Medicaid, there’s expense control. And just because
occupancy is higher or lower, doesn’t necessarily tell the whole story.
You
could price your product and be 100% occupied. You might not make any money,
but you’d be 100%. So there’s some things that I think folks need to spend a
little bit more time digging into the details of to truly understand the
drivers of the business.
On playing in the middle-market or active adult spaces:
We
think it’s interesting. We’re kind of in what I’d call the research phase. We
might be getting ready to experiment with a pilot in 2020.
I think
you’ve got all of the multifamily players running into this space as quickly as
possible. And to that end, it kind of is a multi-family type of play. It’s just
for a different demographic group, and there’s a broad spectrum there. The
affordable product, that’s going to be very different than a Del Webb, where
you might have yoga at seven o’clock in the morning and how-to-make-sushi class
at five o’clock, that’s one end of the spectrum. And you might have another end
of the spectrum or there’s some amenities, some common spaces, maybe some
activities, maybe not. You get an apartment and you’re in an area where it’s
55-plus, which will really be 75- or 80-plus before you know it. And there’s
lots of different places to play there.
I think
there’s some unique aspects to it that are interesting for our company in the
industry as we grow. Given how tight the labor market is, this product type
requires a lot less labor. So it’s a little bit of a hedge or diversification
tool versus our core senior housing product. It does expand the market you can
serve, just due to the entry points that folks would be getting in.
It
might be in the $1,500 to $2,500 range, maybe up to $3,000, versus the higher
price points for congregate assisted/memory care type services. And then folks
will need to figure out, through home health and other resources, how they meet
the care needs for themselves or loved one.
It’s
definitely interesting. A lot of people are talking about it, a lot of people
are chasing it, and you may hear something from us on that front next year.
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