It’s been a big year for Seasons Living, which added a new president, secured a private equity partner, rebranded, and more than doubled its portfolio size.
Now, the Lake Oswego, Oregon-based operator is pursuing growth in new directions, including a project with a Hawaiian health care system and a middle-market model in the works.
When President and COO Dan Williams joined about a year ago, the company was called Seasons Management and had a portfolio of five communities. The organization rebranded about six months ago and is up to 11 operating communities across California, Oregon, Utah, Arizona, New Mexico and Texas — with more in the development and acquisition pipeline. The company also is vertically integrated with a construction and development arm.
Williams is an industry veteran, having started his career as an on-site manager for independent living giant Holiday Retirement. Most recently, he was COO at Olympia, Washington-based Koelsch Communities, while that company was rapidly expanding in standalone memory care. He joins another industry veteran in CEO Eric Jacobsen, who served as COO at Regent Assisted Living from 1994 to 2000 before founding Seasons.
Drawing on their collective experience, the two men are positioning Seasons to both take advantage of distress in the senior living market and to get ahead of the curve by being an early mover on emerging trends.
They are pursuing these goals as the exclusive West Coast senior living partner for a private equity firm. Seasons is not publicly disclosing the name of the firm, but it has “deep pockets” that can support four to eight acquisitions and two to three developments per year over the next several years, Williams told Senior Housing News.
A growing western presence
On the development front, Seasons is targeting markets west of the Mississippi with a particular emphasis on California, Williams said.
From his time at Koelsch, Williams has expertise in standalone memory care, and Seasons is currently constructing this type of building in Torrance, California. It’s a 47-unit, 60-bed property that is expected to open in fall 2020.
“Memory care’s taken a little hit recently, I still think it’s an excellent product,” Williams said. The sector has suffered from overbuilding, but he sees “pockets” — such as as Torrance — where there is unmet demand.
Indeed, Seasons has another standalone memory care project also in the works, in Texas. But the company generally prefers to do combined independent living, assisted living and memory care, and it has a prototype created and under development in Maricopa, Arizona.
That will be a 147-unit building, which is slated to start construction by Q1 2020.
San Diego and Los Angeles are among the other California markets that Seasons is seriously evaluating.
But perhaps the most interesting project on the books right now is even further west than California, in Hawaii. There, Seasons will operate an assisted living and memory care community being developed on a Honolulu campus of the St. Francis Health System.
The campus is called Kupuna Village, and is described by the health system as a “one-stop health and wellness center to meet the needs of Hawaii’s growing senior population and their caregivers.”
Previously, the campus was the site of two hospitals owned by St. Francis. But the health system moved away from hospital ownership toward pre-acute and post-acute care as part of its larger strategic plan, and has been repositioning this site accordingly.
Kupuna Village already is home to a variety of health care providers and community organizations, such as a dialysis center, physician offices, and a skilled nursing nursing facility operated by Ohana Pacific Management. It was through a personal connection at Ohana that Williams first learned of a potential opportunity for Seasons at Kupuna Village.
In joining this Hawaii project, Seasons gets on board with a trend gaining momentum across senior living.
Increasingly, health systems view senior living as a valuable part of the care continuum rather than as a tangential setting. Some health systems — such as Toledo, Ohio-based ProMedica and Sioux Falls, South Dakota-based Sanford Health — have acquired senior living companies outright. The health systems aim to drive more coordinated care for residents of their senior living communities to help drive down overall costs by reducing hospitalizations and other costly episodes.
Other examples of this trend include Baptist Health’s partnership with Belmont Village to co-develop senior living communities in Florida; and Wellspire, a new senior living entity that is a joint venture of Johnston, Iowa-based WesleyLife and Davenport, Iowa-based Genesis Health System.
The Seasons community at Kupuna Village — called Hale O Meleana — is currently going through the licensure process and should open in November. It will feature an adult day program in addition to AL and memory care, and its residents will have access to The Quality of Life Center. This is the heart of Kupuna Village, and includes a senior center, medical offices, multi-purpose rooms for programming, and a bistro-style cafe.
Season is also future-focused in its efforts to reach the middle market of aging boomers — a huge and growing segment of the population that will be unable to afford senior living at today’s market rates.
With this dilemma — and business opportunity — highlighted by research findings released earlier this year, industry stakeholders have been actively discussing development and operating models that could be sustainable and profitable at lower consumer price points.
Only a few providers have actually started building middle-market products, and Seasons is poised to join this group. Williams is tight-lipped about the project at the moment, but says that it is moving forward and is inspired by student housing.
Targeting turnarounds
Memory care is not the only senior housing sector to feel the sting of oversupply in recent years, and many in the industry believe that acquisition opportunities will be plentiful due to distress in the marketplace. Williams is prepared to seize these chances as they come.
“I’ve been able to put together a great infrastructure of talented industry veterans who are very good at doing turnarounds,” he said.
The team has already been successful twice this year. Seasons took over the operations of two communities — including a standalone memory care building — with occupancy of around 80%. Within six months, they were fully occupied, Williams said.
He and Leslie Yanak, vice president of sales and marketing, have developed a process for turnarounds that focus on about six aspects of operations. One is having a “front door-friendly executive director” and another is implementing a culture that heavily rewards census and performance metrics — but Williams declined to go into greater detail on the turnaround approach.
“That’s the secret sauce,” he said.
Overall, Seasons’ stabilized portfolio has occupancy around 93%. Three buildings are currently in lease-up and are on track with pro forma schedules. Williams believes that census pressures are easing as supply and demand begin to balance out. But staffing is another matter, with labor markets tight and wages rising.
Workforce is the issue that is keeping him up at night, he said, and he believes that some providers are blaming ongoing occupancy issues on competition when it more likely is rooted in high staff turnover.
Seasons has tried to address the issue through several initiatives, including offering all workers access to virtual doctor visits through a platform called HealthJoy, and utilizing PayActiv to let employees access a portion of their paycheck before payday.
At eight communities, Seasons has hired a director of people and culture. This is typically not a position that a company of Seasons’ size would add, and it has demanded sacrifices in some other areas as money has been allocated for their salaries, Williams said. So, it’s a measure of how important and difficult the workforce issue is, that the company has already hired for this role.
Despite these workforce challenges, Williams is confident in Seasons ability to scale relatively rapidly, and is looking for acquisitions west of Mississippi. In fact, the company anticipates closing on two more acquisitions — both in Kansas City — by Oct. 1.
“We’re really focused hard on creating topnotch, high-level operations to do these turnarounds,” Williams said. “So far — knock on wood — we’ve been able to do it.”
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