Village Park Senior Living (VPSL) is recording strong rate increases across its multi-brand portfolio, in a market where communities are offering concessions and lowering rates to compete with new supply. CEO Tim Gary largely credits the company’s approach to design and architecture.
“The industry is building product that is a broken model. It has to be more people-focused and right now, it’s more product-focused, and by that you’re trying to force people into a product,” he told Senior Housing News.
VPSL, which is an integrated developer/operator, has two communities in operation under the Village Park brand, with a third set to open in December. Last week, VPSL broke ground on a 204-unit senior housing community in Atlanta’s Buckhead neighborhood, under the Corso brand.
Additionally, VPSL is piloting a proprietary operational platform, Denzi, across its communities that it plans to make available to other providers in 2020.
Diversified construction and design
Gary believes that much of the senior housing product currently being developed is stuck in a time warp — it has not advanced past the mid-1990s in design and scale.
VPSL designs and builds so that prospective residents have a range of living options, regardless of care level and need. A low-rise apartment building will be adjacent to bungalows and cottages. Amenities, meanwhile, are spread across a campus, which serves multiple purposes of encouraging socialization, keeping residents active and allowing caregivers and other staff to monitor residents daily for signs of decline. The typical size of a Village Park community is around 130 units. Corso Atlanta will initially include 204 units in a mix of independent living apartments, assisted living, memory care and independent living city homes with private gardens and patios.
VPSL’s approach to design allows it to offer a range of independent living care packages, from unbundled independent living to independent living with only meal packages, to accommodate for slight mobility impairments that do not necessitate assisted living.
The unit options have also let VPSL cast a wide net for future tenants, and the provider is seeing a growing interest from younger couples with differing care needs, Gary said.
This combination has allowed VPSL to push rates in an Atlanta market where operators are facing rate and occupancy pressures due to new supply. Construction as a percent of inventory in Atlanta has hovered around 20% to 22% since 2015, according to data from the National Investment Center for Seniors Housing & Care (NIC).
Occupancy, meanwhile, was at just above 85% in Q2 2019, compared to 87.8% for senior housing nationally.
Rents at Village Park communities, which are suburban-focused, range between $5,000 and $7,000 per month with a $3,000 deposit. The Corso community in Buckhead is more urban, and rents there will range between $10,000 and $12,000 per month with a $15,000 deposit.
Occupancy is in the mid-90% range, Gary said.
VPSL’s focus on the resident has the added impact of marketing to future residents, whether they be family, close friends and extended networks.
“We’re selling to the people, not just the resident. We want them to think of [residents] as the same person [they’ve] always been,” Gary said.
A new tech platform
VPSL is also active on the technology front, Gary told SHN. Specifically, the company is developing an operational software platform, Denzi, which allows for real-time monitoring of operations, accounting, marketing and sales goals, staffing and other key performance indicators (KPI), as well as slow the rate of resident turnover.
Gary founded a separate tech company, Arras Technology, to develop the Denzi platform.
“We don’t like any of the tech that’s out there right now,” he said.
So far, Denzi has allowed VPSL to evaluate how it is staffing at its communities and adjust scheduling so that staffing ratios are more evenly distributed across care acuities, rather than be weighted toward one care type. This has helped VPSL stabilize salaries and increase rates in an imbalanced supply-demand environment.
Gary would not comment on how much VPSL is spending to develop Denzi. He did say that, when the platform is complete, the company will make it available to other providers for use. This will open up another revenue stream for the company.
Gary believes Denzi will be of great interest for providers looking to serve the growing need for middle-market senior housing. What Denzi will do more than anything is justify the rate increase to the customer. The middle market is willing to pay a little bit more, just not at the rate of higher end senior housing, he said.
“You get more pushback with the middle market — they require more justification.”
A growing pipeline
VPSL is gradually building a diverse, multi-brand pipeline and is looking outside Georgia for opportunities, Gary told SHN.
It is seeking opportunities in the District of Columbia for another Corso community, and is scouting locations in Decatur, Georgia for a third brand, Wrightwater. Additionally, VPSL recently broke ground at its Alpharetta, Georgia community to add 66 new bungalows.
VPSL’s goal is to build and open two new communities a year. Because of the uniqueness of the design, the provider is able to reach 90% occupancy within 12 months of opening, Gary said.
Adding to VPSL’s portfolio via acquisitions is not on the company’s radar.
“It’s hard to acquire because we can’t modify [buildings] to fit into our care program. If we found one we could do that with, great. We just haven’t been able to find it yet,” Gary said.