Will Joint Ventures be the Future for Nonprofit CCRCs?

Trending topics among nonprofit Chief Financial Officers (CFOs) and senior housing finance professionals this year are refinancing and consolidation opportunities in the sector, with many eyeing new ways to spur growth opportunities.

The nonprofit continuing care retirement community (CCRC) business has been plagued by the housing recession and lack of ability to remain competitive with some of the for-profit communities coming to market, and industry members have previously agreed there is a need for CCRCs to evolve.

“Big themes among nonprofit CFOs are investment and reinvestment,” says Lisa McCracken, senior vice president of senior living research and development at specialty investment bank Ziegler. “Many acknowledge that now is a very good time to access capital. Folks looking to tap into capital during the economic recession didn’t have favorable rates. They can now save a significant amount of money by refinancing.”


More than 200 CFOs and industry finance members recently converged for the 17th Annual Ziegler LeadingAge National Senior Living CFO Workshop, with many eager to discuss ways to position their companies for further growth in a rapidly changing health care landscape.

“A lot of them are focusing on partnerships and joint ventures,” McCracken says, noting the sector is seeing less consolidation and affiliations driven by financial distress or necessity. Rather, strategy is at play. “It may be a single-site organization saying, ‘For us to thrive in this new era of health care reform and rapidly changing technology, do we need to partner with someone else to [remain successful]?’”

For example, if a single site CCRC wants to establish a home health care agency on its own, it’s going to be an “uphill battle,” she says.


“You need to hire certain experts, and those people cost money,” she says. “So, a lot of organizations are offering those services through consolidation. And, we’re seeing that on the for-profit side as well.”

CFOs recognize there are benefits from scale, including the bottom line, bargaining power and ability to borrow capital and grow more easily than smaller providers, she says.

Dale Beiler, CFO of nonprofit CCRC Garden Spot Village (pictured), discussed how the New Holland, Pa.-based community acquired a skilled nursing facility and how that positioned the organization for future growth.

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“He shared about the journey to integrate the two communities and the lessons learned along the way,” Ziegler says, noting that senior housing finance professionals also discussed models whereby senior living providers have partnered to create networks with hospitals, Accountable Care Organizations (ACOs) and other health organizations to share risk and improve outcomes and quality of care.

CFOs are also strongly interested in the potential for bringing more services outside of community walls.

“Nonprofit providers are interested in continuing care at home (CCaH),” McCracken says. While CCaH models, referred to by some in the industry as CCRCs without walls, are not new, they are growing in popularity.

“Most often these are entry-fee products for the middle market consumer,” she says, noting there are 21 CCaH programs throughout the country and 27 are expected by year’s end.

“We’re seeing a lot of new, innovative models,” she says.

Written by Cassandra Dowell

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