1. Single facility and family-owned assisted living & nursing care operators may find that the larger, new developments can be both a strategic "threat" and a strategic "opportunity," so a SWOT analysis ("Strength, Weakness, Opportunity, Threat analysis) might be a good first step once an Owner hears about a competing facility being built near them.

    (if you're faced with new facility construction in your neighborhood, if nothing else, do a SWOT in your head or on a scratch piece of paper)

    The "threat" aspect of a new facility in one's neighborhood is pretty obvious (especially one such as Oakmont's new 9 developments in California which is the subject of this article).

    For Owners who decide to keep their facility running it's even more important to look beyond the threat to see how a new, neighboring facility could become an "opportunity."

    Some quick opportunity ideas that I've seen:
    * When new, larger facilities are built, a neighboring assisted living or nursing care facility may turn themselves into a specialty, high-acuity, dementia-only facility. The higher-end memory care residents may come from the new, larger, competitive campus.
    * For a nursing home, it may mean the new assisted living competitor becomes a referral source.
    * Also for a nursing home, if you're in a CON state, it might make sense to consider selling some of your nursing home bed licenses in order to "right-size" the number of beds (for some, bed tax obligations may make this a financially beneficial option).
    * The threat of new competition may tip an Owner's hand to commit to a multi-million dollar renovation or at least new carpet & paint. Sooner is better than later and a small renovation can spruce up a building quickly to keep occupancy higher.

    PS – [Note: seeing the opportunities within the context of a competitor coming into town, is also important for Owners considering selling their business / facility– because, if the Owners want the best chance of getting a higher price, a buyer may need to look beyond the obvious threat to be convinced of the less-apparent opportunities.]

    Chris Foley
    CPA (Retired)
    Senior Vice President, Equity, Inc.
    (614) 915-8835