Five Star C-Suite Shakeup Continues with New CFO

Five Star Senior Living (Nasdaq: FVE) is shaking up its executive ranks again, two days before releasing its Q1 2019 earnings report.

The Newton, Massachusetts-based senior living owner and operator announced the appointment of Jeffrey C. Leer as Executive Vice President, Chief Financial Officer and Treasurer. Leer will assume his duties June 1.

He succeeds Rick Doyle, who will remain a Five Star non-officer employee through Dec. 31, in order to ensure a smooth transition. Leer joins the company five months after Katie Potter was named CEO.

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Leer is an executive vice president at RMR Group (Nasdaq: RMR), also based in Newton, and is concurrently chief financial officer and treasurer at Office Properties Income Trust (Nasdaq: OPI), one of RMR Group’s managed real estate investment trusts (REIT). Five Star is also affiliated with RMR Group, which also manages real estate investment trust Senior Housing Properties Trust (Nasdaq: SHN), one of Five Star’s biggest shareholders.

The two companies announced a major lease restructuring last month, that increases SHN’s ownership in Five Star from its current 8.3% stake to 34% on Jan. 1, 2020, terminates the existing master leases, management agreements and pooling agreements for all 261 Five Star properties that SHN owns, and establishes a RIDEA arrangement between the two companies.

Five Star has spent the past couple years dealing with financial challenges which pose a threat to the company’s viability, and has it on the verge of having its stock delisted by Nasdaq. The company — which has a portfolio of 283 senior living communities — reported senior living revenue of $276.3 million in Q4 2018, a 1.1% decrease year-to-year.

The company also deferred its February rent payment to SHN through March 31.

But Five Star believes a key to a turnaround lies in improving its resident and employee experiences. It increased training opportunities to staff, as well as tools to allow workers to better execute their jobs.

Five Star is putting its portfolio through J.D. Power’s new senior living certification, which it hopes will give it a competitive advantage in its markets for courting new residents. Three communities attained the certification in February, and Five Star expects to have its entire portfolio certified by 2020.

Last week, Five Star announced it joined the MIT AgeLab at the Massachusetts Institute of Technology. The AgeLab researches ways to leverage technology in order to improve the quality of life of the aging population.

Five Star and OPI did not respond to requests for comment from Senior Housing News as of press time.

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