When it comes to the view from the C-Suite, senior living leaders inevitably see a mixed landscape. While they may take heart from favorable demographics and other large-scale trends, they also perceive threats to long-term success. One of these threats, in the estimation of some prominent executives, is the deep reluctance of seniors in the United States to voluntarily enter senior living.
“How do we break the cycle that staying in your single-family home is a badge of honor?” said Ed Kenny, chairman and CEO of LCS, at the recent Senior Housing News Summit in Chicago. “Why are people waiting so long to recognize the benefits of what we do day-in and day-out?”
Kenny proposed that educating consumers about senior living is crucial, and said he “looks forward to the day” when the decision to enter a senior living community is not so needs-driven as it typically is today.
The way senior living is viewed in China could be instructive, said Holiday Retirement CEO and President Kai Hsaio. Working with Chinese partners, Holiday helped position a community in Shanghai as a highly desirable luxury option.
“They view it as Club Med now, and it really is,” Hsaio said.
Another top executive who shares the perspective that senior living needs to be a less needs-based product is a relative newcomer: Affinitas Life CEO Anthony Santiago.
The company launched in late 2014, and its strategy is aligned with the idea that making senior housing a super-desirable, high-end option could change the way that the coming wave of aging baby boomers views the choice to move in. Santiago plans to target seniors in the 10% wealth and income category who desire the 1% lifestyle, particularly those who want to stay put as they age.
The model has been described as “Ritz Carlton meets Disney,” and is designed around five designated types of programming within each community: wellness, academia, business, the arts and medical research. For example, an “Affinitas Center for Business Development & Philanthropy ” would provide business operations space, as well as private conference spaces, to serve residents who desire to continue professional pursuits.
Affinitas aims to start construction on its first property in the Northeast in 2016, and is in the process of identifying a pipeline for its next five assets. It recently announced that its full executive team now is being finalized, drawing from a variety of business sectors.
Members include Thomas J. Flitsch as chief development officer and Dr. Steven Fuller as chief medical officer. Flitsch is an architect who also has been a development executive for Atria Senior Living. Fuller is a physician and an entrepreneur with over 25 years of medical experience, including primary care, critical care, and skilled nursing care, as well as post-operative management, home health and hospice.
Senior Housing News sat down with Santiago to discuss his “baby boomer” leadership team and his vision for the industry.
Q: Where do you see Affinitas fitting into the senior housing landscape moving forward?
AS: Senior housing is not something that most people aspire to. It’s not typical that somebody wakes up and says they’re moving into senior living by choice; there’s traditionally someone else who makes that decision.
Affinitas aims to change that by creating a way for us to age in place without worrying what happens next. We’re targeting a younger subset of the population with more vibrancy, allowing these seniors to choose their destiny instead of having it thrust upon them through more of a country club platform.
Q: Who are the leaders that you’ve tapped? What does this say about the company?
AS: One of the things I saw as important when putting together my executive team was finding top leaders in different places and incorporating baby boomers. I want it to be boomers creating this for boomers. Everyone has more than 25 years of experience in diversified industries—development, hospitality, finance, marketing, everything you can possibly think of.
These are people who have supervised high-end properties, participated in scenario planning, from outside the industry and within. The goal is to bridge the delta within today’s senior living model, and the diversity of this team can execute on that.
Q: How is Affinitas diverging from the typical senior housing model in terms of amenities and programs?
AS: Part of our secret sauce is our programmatic mousetrap that we’re creating to be a little different than the rest in the market space.
Some aspects of that are based on intellectual pursuits, such as art and culture, or medical ambassadors within our organization. We believe that, as a whole, the market needs a complete paradigm shift where it relates to who is living within these communities and would it be a community you’d want to live in. That’s the idea behind “baby boomers for baby boomers” and creating the next entree to what’s great and what’s needed within the space, as opposed to the overall activity programming traditionally within these communities. We’re taking that, and putting it on steroids.
From a medical perspective, as opposed to having the few models we know—the medical model, the social model—there’s an aspirational model. We’re really finding that our niche will be the 80% aging-in-place model, for those individuals who want to reside and stay in their place forever. That’s what we’re trying to incorporate.
However, we realize that there are medical services that are going to be needed, which is why we plan to encompass everything you could possibly think of medically in one place, from a general practitioner to cardiologist. As part of the membership model you’ll be purchasing, you’ll get a medical ambassador membership with different types of services associated with it.
Q: How do you see the business of senior living evolving or remaining the same in the next few years?
AS: Senior housing presents a unique opportunity for anyone who seeks to surf the tide of the rising tsunami—the aging consumer. This is going to place a great demand on the resources in the world economy. In the United States alone, there are 76 million boomers. In January of 2011, 10,000 baby boomers began to turn 65 every single day. That signifies an important milestone and traditional commencement of the post-career, post-child-rearing phase of life. This march will continue at this rate every day for the next 16 years. That’s an incredible statistic.
The aspirations and lifestyles of the boomers in this cohort will dictate future cultural trends and continue to grow whole industries, as they have done from the 1960s right through now. Some statistics say there need to be 20,000 units-plus every year just to keep up with the demand. Those numbers, we’re just not prepared for. We need to take them truly seriously, and figure out how we work around them.
From a perspective of the market as a whole, as we watch the demand side and be careful on the supply piece, I think we should be able to match it or mirror it in tandem. It hopefully won’t be saturated, but we still remain bullish.
Q: Do you think your take on the senior housing industry is in line with other CEOs in the space?
AS: I do. I think if you look at all the CEOs, we’re all looking for an opportunity to really think outside the box, be more creative, be more innovative.
Realistically, the industry as a whole, it’s a complete handbook of what we do we do for the next generation forthcoming. Once we get past the tendency of the 83-year-old individual that’s typically in our space, we’re all looking for the ability to reach someone who is a bit more vibrant and keep him or her in our communities longer. How do we talk to them today and get them primed in order to start looking at our spaces as the next phase of their lives, as opposed to it being forced upon them?