Assisted Living Concepts’ new CEO is touting staff training and technology deployment as key focuses of the newly-private company as it enters a “new era.”
“As a private company over the next 100 days, our first effort will be to work with employees to jointly develop a new and clearly articulated mission, strategy, and culture that will guide decision making going forward. That’s where the focus is today,” Jack Callison Jr., CEO of ALC, told Senior Housing News.
The company, formerly traded on the New York Stock Exchange, was bought by private equity firm TPG for approximately $280 million in a deal that closed in July, and was subsequently de-listed.
Assisted Living Concepts’ strategy going forward centers around the portfolio’s “very good bones,” Callison says.
“We think we have very high quality houses that have been very well maintained,” he says. “The biggest opportunity is to invest heavily in existing employees and improve the level of training we provide to them. We’re making substantial investments in technology to boost our productivity and efficiency across the board.”
Callison declined to provide estimates for how much these investments will cost, but he said the company expects enhancements to training programs and information technology systems will result in improvements to resident care and overall employee effectiveness.
The return on investment will be seen, in turn, in higher occupancy rates, which right now range in the low 60s.
“We’re taking a very long-term view. With new investments in training and technology over the next several years, we’ll begin to eliminate the gap that exists between our current occupancy and the industry average of nearly 90% for independent living. It will take time to get there,” Callison says.
Assisted Living Concepts, which operates 210 communities in 19 states, has a checkered regulatory past and portfolio occupancy that has dropped precipitously from second quarter of 2006 levels of about 84%.
Regulatory violations emerged in properties in multiple states for issues related to staffing and resident care, leading to several lawsuits shareholders filed against the company and another by real estate landlord Ventas Realty.
In May 2012, the company fired its CEO and installed an interim CEO, the now-retired Dr. Chip Roadman, who immediately focused on improving staffing levels and resolving regulatory woes.
Care is “stronger than ever” at Assisted Living Concepts communities, according to Callison, who called it a “critical” part of the company’s mission-driven values.
“One of the great things that differentiates us in our industry is having registered nurses in our communities and continuing to invest in their ongoing development and wellbeing,” Callison says. “That’s top of mind for us, 24/7, in everything we do.”
On a longer-term basis, as the company attains occupancy closer to the industry average, Assisted Living Concepts will also be focused on growth that could come in the form of acquisitions or new development, he says.
Although most ALC communities are smaller in size compared to the industry average, ranging between 40 and 60 units, Callison said upside potential exists in many of the portfolio’s assets.
“We spent a lot of time during diligence on this transaction studying the assets we’d be acquiring,” he says. “We’re excited about the growth prospects.”
The properties’ average size can actually be seen as a positive, he says, because a 44-unit, 60% occupied community would only need about 12 residents before achieving 90% occupancy.
“While it may seem like a big mountain to climb, we look at it [like that] and are encouraged. It takes little movement in terms of absolute new residents to achieve stabilized occupancy levels, and it feels very manageable and achievable,” says Callison. “We feel very good about our ability to employ new creative marketing strategies to find those 12 people.”
The company is also looking at opportunities to rebrand the whole organization, although the details are still being worked out.
“I’m incredibly excited in our future. I think it’s very bright,” Callison says. “This is an exciting period of time for the organization—a new era.”
Written by Alyssa Gerace