New Perspective Senior Living has a new CEO — and soon, the company might venture into new product types, too.
The Minnetonka, Minnesota-based senior living provider is exploring both middle-market and active adult senior housing, according to CEO Ryan Novaczyk.
“We think it’s interesting,” Novaczyk said during a recent appearance on the Senior Housing News podcast, Transform. “We’re kind of in what I’d call the research phase. We might be getting ready to experiment with a pilot in 2020.”
The company — which set a goal to serve 10,000 older adults by 2025 — is currently focused on growth, both in its senior living portfolio and in its culture and workforce. New Perspective has two projects under construction slated to open in 2020 (one of which is pictured above). The provider is also in active negotiations on acquisition opportunities that could add as many as eight communities to its portfolio by the beginning of next year.
New Perspective’s humble beginnings in the basement of the Novaczyk family home:
My dad had a partially finished office down there, and we were just bootstrapping it in every sense of the word. He and my mom were going full tilt at this. I had a full-time job working for an investment bank and was helping out when I could, and then I later joined the organization full-time back in 2008. Todd [Novaczyk] was the CEO, he was the secretary, he was the financier, he was the maintenance guy. You wear a lot of hats. You’re sending your own FedEx packages. We still kind of do that today a little bit.
But it was truly a startup that literally started in the basement, and it was the inspiration of caring for my Grandma Betty that got my parents thinking that this would be a great business endeavor for the family. They’re doing a lot of the things that we did for Grandma Betty to help her live life on purpose every day. And the organization was really founded with that purpose-driven mindset from day one. What was best for Betty evolved into our mission around putting residents first and really helped us establish our foundational belief that all seniors deserve to live life on purpose.
What New Perspective is focused on now:
Growth. Growing our people and our culture is first and foremost. Continuing to grow our operational capabilities, growing our development platform, growing our health and wellness and activity programs, enhance the resident experience, growing our technology infrastructure. We’ve got to get those things right. And if we do get those things right, especially on the people and culture front, that’s what’s going to drive unit expansion and community expansion in the portfolio. Those are the things that are going to drive occupancy. And those are the things that are going to drive NOI.
Our commitment to servant leadership and collaboration is front and center and everything that we do as an organization. And one of our main initiatives this year was to really drill down and infuse that servant leadership culture in all levels of the organization.
As an example, by the end of November, all 200 managers at New Perspective will have completed an advanced two-day servant leadership training seminar. Our district and local teams have been infusing the communities with the servant leadership principles since January. And this two-day training and the homework assignments that come out of it are really going to further accelerate those efforts. That is laying the foundation and the groundwork that’s going to allow us to get the right people on the bus and that’s going to facilitate our path of getting to 10,000 seniors living life on purpose by 2025.
Why occupancy isn’t the only important senior living metric:
There’s so much fixation on occupancy. And certainly, it is one of the biggest drivers to grow the business. But it’s not the only driver there.
There’s lots of other other levers, and we have communities that are running 95%, occupancy and 36% margins, and communities that are running 86% occupancy and 44% margins and way higher return on invested capital. So we kind of take a holistic view of the business. There’s occupancy, there’s mix, there’s private-pay, there’s Medicaid, there’s expense control. And just because occupancy is higher or lower, doesn’t necessarily tell the whole story.
You could price your product and be 100% occupied. You might not make any money, but you’d be 100%. So there’s some things that I think folks need to spend a little bit more time digging into the details of to truly understand the drivers of the business.
On playing in the middle-market or active adult spaces:
We think it’s interesting. We’re kind of in what I’d call the research phase. We might be getting ready to experiment with a pilot in 2020.
I think you’ve got all of the multifamily players running into this space as quickly as possible. And to that end, it kind of is a multi-family type of play. It’s just for a different demographic group, and there’s a broad spectrum there. The affordable product, that’s going to be very different than a Del Webb, where you might have yoga at seven o’clock in the morning and how-to-make-sushi class at five o’clock, that’s one end of the spectrum. And you might have another end of the spectrum or there’s some amenities, some common spaces, maybe some activities, maybe not. You get an apartment and you’re in an area where it’s 55-plus, which will really be 75- or 80-plus before you know it. And there’s lots of different places to play there.
I think there’s some unique aspects to it that are interesting for our company in the industry as we grow. Given how tight the labor market is, this product type requires a lot less labor. So it’s a little bit of a hedge or diversification tool versus our core senior housing product. It does expand the market you can serve, just due to the entry points that folks would be getting in.
It might be in the $1,500 to $2,500 range, maybe up to $3,000, versus the higher price points for congregate assisted/memory care type services. And then folks will need to figure out, through home health and other resources, how they meet the care needs for themselves or loved one.
It’s definitely interesting. A lot of people are talking about it, a lot of people are chasing it, and you may hear something from us on that front next year.
Click below to listen to the complete episode: