LCS Makes Headway on Rental Portfolio Expansion, Increases Occupancy

One of the largest senior housing operators in the U.S. is moving forward with its previously announced plans to scale up its rental senior housing portfolio, and the effort now appears to be bearing fruit.

Des Moines, Iowa-based Life Care Services (LCS) is on track to open a minimum of 17 communities in the next three years — though the end total might be much higher, according to Chris Bird, executive vice president and director of rental at LCS. In addition, occupancy is on the upswing following some operational changes, notably related to empowering executive directors.

“We’re always going to be opening up five to six communities every year among our different brands … including Delaney, Clarendale, and Celebration with Big Rock Partners,” Bird told Senior Housing News. “But I would suspect that every year you’ll see LCS grow by [an even higher total of] 10-12 rental communities, if not upward of 15, as we continue our success and owners want to be part of that success.”

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Currently, LCS manages a portfolio of 40 rental communities. LCS is also the largest third-party manager of continuing care retirement communities (CCRCs).

The company has tweaked its rental operational model in recent months, starting with Bird’s hiring at the beginning of this year. In his short tenure with the company, he’s helped LCS give community-level leaders more freedom when making decisions or hiring employees outside of the senior living industry. The company has also boosted wage rates for some of its employees, given them more flexible work hours and provided creative benefits, where it can.

“Too often in my 20-plus years in senior housing, you would see executive directors working under an organization, and an organization would say, we’re going to do it this way, and there’s no chance for anyone to go outside the lines,” Bird said. “We’re actually empowering folks to have confidence, take risks, knowing that most of our EDs have a history in senior housing.”

The company also this week announced the hiring of Rick Westermann, a former vice president with senior living referral service A Place for Mom; and GeLynna Shaw, who was previously a senior vice president with Brookdale Senior Living (NYSE: BKD). Together, those new hires will help the company as it expands its presence in the rental sector and maps out future strategies for its growing rental division.

So far, that new direction seems to be paying off. LCS has grown its stabilized senior housing portfolio occupancy 9.4%, year-over-year, and increased its same-store portfolio occupancy 27% year-over-year and 49% from the beginning of 2017.

“We’ve been seeing much better outcomes this year under the new direction,” Bird said. “We like the rental piece [because] it can be more nimble and quicker to get in the ground and get buildings out versus the length of time it takes to get a life plan community moving.”

Market differentiators

Overall, LCS’s grand idea is to lend to its rental portfolio the same kind of resort-style atmosphere that many of its existing life plan communities have, Bird said.

“We’re trying to create a new and inviting experience within the realm of everything we do, while at the same time taking from the successes we’ve had at our life plan communities,” he said.

 The senior living provider plans to realize its growth plans by opening highly amenitized rental senior living communities with about 200 to 300 units apiece.

Some LCS rental projects, such as its developments with Big Rock Partners, are in resort areas such as Kiawah Island, South Carolina, and Celebration, Florida. But this will not typify the whole rental portfolio. A good example of an LCS rental community, Bird said, is the newly opened Carrington at Lincolnwood (pictured above), a 385-unit rental independent living, assisted living and memory care community in Lincolnwood, Illinois, which is part of the Chicago metro area. The Carrington was developed with help from the Bluhm family of Chicago and South Bay Partners.

The Carrington has an indoor aquatic and fitness center, multiple libraries, a hair salon and spa, gardens, a dog-friendly environment and areas for walking. The community also comes with multiple dining venues ranging from an all-day dining room and a full bar modeled after a neighborhood pub.

It also has a bevy of unit layouts and designs for residents. The idea is to give them many rental choices as opposed to just two or three, Bird said.

“With our rental portfolio, we’re trying to meet the desires of what the residents have been telling us for years,” Bird said. “I think our rental portfolio has an exciting future ahead, for both LCS and this sector.”

Written by Tim Regan

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