As an entrepreneur who stepped out of leadership positions with established senior living companies to create his own brand, Ken Jaeger knows what it means to have a vision. His company, MorningStar Senior Living, was founded in 2003 to serve seniors within assisted living, independent living and memory care. The Denver, Colorado-based owner/operator has grown to 25 communities that are operating or currently under development.
Senior Housing News caught up with Jaeger—fresh off a win as Ernst & Young Entrepreneur of the Year 2016 in the Mountain Desert Region within the Healthcare and Life Sciences category—to hear more about how the industry has changed for new companies today, what’s innovative to him and his vision for the future for MorningStar Senior Living.
AB: What is exciting and innovative to you in health care and senior housing right now?
KJ: The industry is doing a great job in reaching out and educating this new generation—the baby boomer generation—about what senior housing is. It’s been getting a lot of press and MorningStar has benefitted from that. In the last 10 years or so the architectural designs of senior living communities has reached a whole new level. New communities now are just flat out beautiful. Companies are also falling in line with technology. Advancements in health care are helping delivering serving on the clinical side, the social side.
AB: You branched out to create your own senior living brand, the MorningStar Senior Living we know today, back in 2003. What does it take to be an entrepreneur in senior living today?
KJ: I started MorningStar 12 years ago, and I look back at when I first had the dream. What it takes is that you have to have a unique vision, one that you are passionate about, that is different than anyone else out there. I often think about when Dave Thomas founded Wendy’s. People said he was crazy. McDonald’s was on every corner, but he said, “I am going to be unique and be better and be different.” You have to have that passion inside of you where you know what you’re doing and can be the best in the world at it. And you have to be a risk taker.
More importantly than that, you have to get a team of people that believes in you and believes in the vision. When you are all working on the vision together, you are off to the races. We have hundreds and hundreds of team members who are painting this vision every day, and I am just in awe of it.
AB: What has changed about the industry since you took a chance on starting your own senior living company?
KJ: There are pros with the way the industry has grown the way it has. On the one hand, that’s a good thing because it’s an industry that serves our seniors. But there are cons with the way the industry is going. A negative is that overgrowth can hurt us. We have to be cautious as an industry that we don’t become overbuilt, or our occupancies will drop and everybody gets hurt. We have to pay careful attention to growth metrics so overgrowth doesn’t happen.
When I got in 12-13 years ago, there was more demand than there was supply. People who got in had exceptional experience in senior housing. Today, we are on the precipice of too much supply. It’s going to hurt if we don’t watch metrics and slow down so demand keeps pace with supply—and vice versa. We are very, very cautious when it comes to which markets we are going into. We don’t build for the sake of building; only to meet the demand of that market.
If we continue to execute on customer service, we should always maintain high occupancy based on reputation. We will continue to have high occupancy even with people around us. To protect against that, we are all out that this is the theme of who we are—all about customer service. When overbuilding happens, customers have a choice, and they will go to those who have stood the test of time who deliver quality care.
AB: What opportunities get you excited this year?
KJ: We’re in eight states right now. Our master plan is to continue to go into communities where we have four to five new developments per year.That’s been our growth mode. We will take three years to build a home if it takes us that long. We build cautiously and slowly so that we won’t have any misses. It’s important we stay true to our core values and metrics so we can walk away from a project if the numbers don’t make sense. I try to stay disciplined so I can say I would love to be in a certain market, but if the demand isn’t there, we need to look elsewhere.
AB: What’s your biggest challenge this year?
KJ: It’s really on the development side, where we have to continue to educate town councils and governing bodies on what senior living is to ensure that they know seniors are family members, just like them. Seniors want to reside and retire in their own communities. We’re not a retail shopping center. We are living, loving human beings, and today it is difficult to get entitlements for that senior living space if communities don’t know what it is.
AB: What is the MorningStar vision?
We are one of the rare companies that has the three disciplines under one roof—we are an operator, a developer and we do the finance and the deal structure. We don’t have to branch out if we don’t want to. We have 1,500 team members. We love the industry. The future looks bright and we are excited to be a part of it.
Such a big part of our company is serving around the world and in our communities. If someone asked me the secret to our success, I would say it’s that we hire service-minded people who live life with a sense of purpose to serve others. Our turnover rate is bar none the lowest in the industry because people are attracted to working for a company with a service mind. When our company’s growth was a direct result of being service minded, the proof was in the pudding.
Written by Amy Baxter