Heritage Communities is bringing its flexible model of senior living to the state of Texas for the first time.
This will be the 16th community overall for Omaha, Nebraska-based Heritage, which was founded in 2002. The company owns and operates 13 existing properties in Nebraska, Iowa and Arizona, with two others currently in development — one in Nebraska and one in Iowa. All but one of its communities have been ground-up developments.
The planned community in the Dallas/Fort Worth area could be a foothold for further expansion in that market, if it proves to be a good fit for Heritage’s offering, CEO Farhan Khan told Senior Housing News.
The Dallas area does have a significant number of senior living communities, but relatively few that offer independent living, assisted living and memory care under one roof, Khan said. Heritage is further differentiated from the competition thanks to its flexible approach for aging in place.
Located in Carrollton, about 20 miles north of downtown Dallas, the $24 million community will be entirely licensed for assisted living, and will be designed and operated so that independent living units can be adjusted to accommodate increasing care needs. Construction is scheduled to begin in the spring of 2020.
Flexible design and operations
Heritage introduced its flexible concept three years ago. It adds some financial and operational complexities, but it has proven successful at the two Nebraska communities where it has been implemented, Khan said.
For the planned Carrollton project, the effort involves getting assisted living licensure for all 140 units and doing a health assessment for every resident at move in, even those entering independent living. Only about 60 or 70 units will be occupied by AL residents initially, with 26 units designated for memory care and the balance being IL.
From a design standpoint, all the units are compliant with the Americans with Disabilities Act (ADA), and there are mechanisms to lock or secure patios, ovens and ranges, washers and dryers and other features as needed over time. Also, there are not separate wings for IL and AL.
“When you have just an IL wing and an AL wing, from an operational standpoint, you know that in AL you stop in every room [to provide care services],” Khan said. “In this case, our aides will know that, say, room 221 is in need of these services, and so it takes a little more effort on our part.”
To further support aging in place, Heritage established a home health agency, Heritage OnCare. This is serving the greater Omaha metro area and is doing well so far, Khan said. Plans are in the works for OnCare to open in Phoenix, and a location is slated near the Carrollton community in Texas.
“It … allows us to get a better idea of what’s coming on in the general medical community of the area and how to better provide for residents’ future needs, and [create] better designs for upcoming communities,” Khan said, of the home health business. “It helps in a lot of ways.”
Opening and running a Medicare-certified home health company has not been easy, but he likes the challenge, he added.
Some providers might balk at the idea of co-mingling levels of care in one building, believing that older adults who are contemplating independent living do not want to be confronted with reminders that they might develop care needs in the future.
But the ability to age in place is highlighted in Heritage’s sales process and has been well received by many seniors and their family members, who take comfort in the availability of services, Khan said.
Balancing innovation and structure
Khan co-founded Heritage with Nate Underwood, who currently serves as the company’s president.
Prior to starting the company, Underwood was a middle-school teacher, while his father was working with Khan — an architect by training — on town home developments.
In doing those housing developments, Khan saw the need for senior living in those same locales, and so Heritage was created to meet that demand. Initially, the company was focused exclusively on development, but decided to operate its own communities to drive more innovation.
“We can put our own stamp on it,” Khan said.
In addition to its flexible units, Heritage has innovated in other realms.
For example, Underwood worked with Vice President of Sales and Marketing Lacy Jungman to write a book — In a Good Place — about an adult daughter seeking senior living for her mother. The company’s sales counselors use the book as a resource and tool in connecting with family members who are going through that same journey themselves. The book won a Best of the Best award from industry association Argentum in 2019.
Khan has taken a hands-on approach to design, seeking to improve with each new development and tailor buildings to their particular market. One overriding goal is to foster socialization through design — meaning senior-friendly acoustics, lighting, and other elements, to encourage residents and their guests to socialize in common areas.
At the Carrollton community, dining will be one special focus, Khan said. He envisions having areas of the building that can become pop-up dining venues, and more intentional use of outdoor space for dining.
Heritage is committed to its owner-operator model that enables this type of innovation and has never aspired to “hockey stick” growth, Underwood told SHN. The company benefits from close alignment with its group of about 40 investors, some of whom have family members living in Heritage communities, he noted.
Still, Heritage has reached a scale where more systemized operations are needed. To this end, the company adopted an entrepreneurial organizational system (EOS) two years ago. This system is organized around common systems and processes to achieve enterprise-wide quarterly goals.
“The way Farhan and I used to roll things out, it was more like a grenade, where you pull the pin, and we’d roll in the room and walk away — we were entrepreneurial in nature,” Underwood said. “So this [new] structure and rhythm helped everybody, I think.”
The approach appears to be paying off in the form of 93% average occupancy across the portfolio, even in the face of increased competition.
To sustain these results, Underwood and Khan plan to add no more than one or two properties each year while continuing to introduce new operational concepts.
“We haven’t done everything right, but we’ve developed a very solid company that does very good things,” Khan said.