As president of Anthology Senior Living, Ben Burke is a changemaker breaking new ground in creating high-quality communities at a more attainable price point.

Key to Anthology’s strategy is its vertical integration of development and management, as the senior living platform of Chicago-based firm CA. Anthology is leveraging smart and economical design, technology and operational flexibility to create a next-generation offering for the changing consumer.

Through the Changemakers series, Burke discusses the steps he has taken to lead Anthology, including lessons learned in sales and marketing, the pursuit of a “mini continuum” model, the importance of aligning all project stakeholders, and where the company takes risks.

Anthology operates a portfolio of 41 communities — 24 developed from the ground up — and plans to start construction on an additional 6 projects this year.

Describe one or two changes that you’ve been a part of, that you think have made the biggest difference in senior living or for Anthology?

Ben Burke: The biggest change in our business was undoubtedly internalizing operations.

Operations is a huge part of this business because at the end of the day, you can have an amazing property and an amazing location, but if it isn’t operated well, it won’t succeed. You won’t have happy residents, you won’t have happy team members and you won’t have happy investors.

You can have a poorly located, modest product with great operations and you will succeed.

Bringing operations in-house has always been a goal of ours, and it has enabled us to fulfill a lot of the other goals we set. It helped us become very detailed in every component of our business to quickly affect change for the positive in every corner. We’ve also been able to get a deep understanding of the data and the KPIs that we judge ourselves with. 

In addition, we’ve also been able to create a culture of trust and transparency, where we can easily support the folks who are critical to the success of our business. Our frontline team members, our executive directors, our department heads, our hourly caregivers, our nurses, food service providers, activities folks, et cetera.

We’re able to work as a team to provide the best service, protection, comfort and environment for our residents, who are ultimately our customers. We’ve seen a material change in the communities we’ve acquired from a cultural perspective, showing a record number of residents, team members and resident families, which is so fulfilling, even in a period of immense difficulty. For us, that has translated into positive financial results for our communities and our business. That has been hands down the biggest change I’ve been a part of in our business.

Can you speak to the ability to develop better products by being vertically integrated?

The advantages from the new development side are endless. The heads of our development team, investment team and acquisition team sit at a table every single Monday with the heads of our operations and asset management teams. We talk about every single deal in detail.

Then, once a month, we have what we call a “Super Thursday Meeting,” and we go through everything that links operations and development. Whether that’s design, construction timelines, or some of the areas like sales trailers and pre-opening and signage, we talk in detail about all these topics.

FF&E [furniture, fixtures and equipment] is a huge area. The business is so nuanced from both an operational and a customer perspective that if you are not someone who has operated in our communities, it is very difficult to make all of the right decisions in the design.

If you walked into a room of developers or architects from different industries and asked them, how many people in this room have ever lived in a student housing building, you’d probably get a big chunk of folks that went to college and lived in some sort of student housing building. If you asked, how many folks have ever lived in an apartment building, you’d have a bunch of folks who lived in an apartment or condo at one time or another. If you asked, how many folks have lived in assisted living, you’d get very few hands.

People who have lived in apartment buildings can better design apartment buildings because they were residents at some point in time. It’s just a different depth of knowledge, and that’s why our operations folks are in the buildings on a day-to-day basis.

What is important to our residents? How important is living space versus a robust kitchen area? Is ceiling height important or not important? What is the best use of technology? What is valuable? These are not obvious things, and without operations at the table, you will not be able to easily make those decisions.

Looking at the industry as a whole, we are seeing more vertically integrated companies and more experiments with capital structures to bring people in alignment financially. We also still hear that it’s a pain point. Do you think that needs to change at a faster rate in the industry?

I think if people want to be successful in this industry, they have to look at operations as a meaningful part of a project from start to finish. The short answer is yes.

I do think people need to be vertically integrated to be successful. I think a financial structure that aligns the operator and the developer might create alignment in an individual project; it still makes it difficult if there is a difference of opinion.

There isn’t one final decision maker who understands all three components in detail. I think we’re looking to minimize our mistakes through this structure, and third-party structures are very difficult.

Let’s talk about some specific projects. What is happening with Anthology of Mayfield Heights, which set a new direction for the company?

That project has been very successful. From an occupancy perspective and all key operational metrics, we’re ahead of our pro forma despite pre-leasing through COVID.

We’re also seeing a decent mix of about 50/50 between independent living and assisted living. Initially, we were worried about residents and potential residents making the choice to move into independent living through the COVID era, both pre- and post-vaccination.

It’s well located in the Cleveland markets, adjacent to one of the bigger event centers and the major roads. We also think it’s one of the nicest offerings — if not the nicest offering — in the market while still maintaining an attainable price point. We have an incredibly strong team there that has driven the success of that community.

There’s been a lot of focus on the middle market lately and discussion of achieving a reasonable price point. How were you able to achieve $2,800 as a starting rate?

We achieved that by building for the right price with a volume of units, but we’re not making a bet on any one unit type. Within independent living, assisted living and memory care, we have a variety of studios, one-bedrooms and two-bedroom units. We’re able to offer a competitively priced product at an attainable rent while maintaining a five-star environment.

It seems like when you go after a middle market price point, vertical integration is key to maximizing operational efficiency and avoiding costly missteps. Do you agree?

That’s right. The riskiest part of our business is in the lease-up. We’re all pretty good at finding sites, pricing, designing and developing them at the right price, especially being vertically integrated. The challenge is taking it from 0% occupied to stabilized.

Another component to that is making sure you are not going into a market where you’re the third, fourth or fifth deal built in the last five years. It has been a challenge to find those markets, but it’s hugely important so you are not competing against a bunch of other communities at the exact same time.

The final and most important component is being shoulder-to-shoulder with your operations team on the ground. That is the most important component of the lease-up. If you don’t have that right leadership team in the community, it’s difficult to lease up a building. Picking, training and supporting that leadership team is how you find the keys to success.

The Anthology at Mayfield Heights has a continuum, but it doesn’t have skilled nursing or an entrance fee like a traditional CCRC. Can you talk about the decision to follow that model?

We love the rental model. We call this a “mini continuum” because it doesn’t have skilled nursing. We like the independent living, assisted living and memory care continuum in a rental form because you don’t have to [require] an entrance fee, yet it provides the same quality as entrance fee communities. It’s sometimes hard for people to come up with those entrance fees, and if we can provide the same product without an out-of-pocket fee, that’s a great value to our residents.

Accordingly, we feel very comfortable going up against an entrance fee community. We love the continuum nature of our buildings because we want to cast the widest net possible and reach all the various buckets of demand on the demand curve.

We know there’s a certain bucket of demand for independent living, assisted living and memory care. Within those, we know there’s a certain bucket of demand for studios, one-bedrooms and two-bedrooms at various price points. We don’t want to belong to any one product type or price point.

Can you talk about a time when you tried to create change, and it didn’t go according to plan? What did you learn? How did you pivot?

I think a challenge for many operating companies in the senior living space is identifying where marketing ends and sales begins, and where the two overlap.

Is it one group? Is it multiple groups? Then furthermore, how much say should each one have when they’re spending their budgets and tracking the effectiveness of their work?

We initially decided to have a head of marketing, and a head of sales, and we designated them as two different departments. Marketing drives leads, while sales closes leads and does community outreach to drive more organic leads.

Quite frankly, it didn’t work. I think the mistake we made was not creating an upfront roadmap and goal for the two combined departments with a clear mandate, and defined roles and responsibilities around a core thesis.

We said, “Hey, you do the marketing and you do sales — go figure it out and show us what you can do.” There was consternation within the departments, a lack of clear direction between the two departments and a failure to maximize our potential accordingly. Undoubtedly, each department did some amazing work and set some really strong foundational pieces; however, the two were not working in an optimized manner. That was a massive lesson to learn.

Today, we’re moving towards a structure where one person oversees sales and marketing. They are the point person for maintaining that mandate, the roles and responsibilities, and objectives.

Then, we’re bringing in an industry veteran agency to help with sales, marketing and brand strategy. We’re also changing the focus and the objective of our sales team to nurturing our referral networks and building their network of partnerships within the communities.

Anthology is trying to move the needle toward a next-gen product. On the other hand, I assume you don’t want to get too far ahead of the market. How do you find that balance?

We want to get our fundamentals and our baseline right first, without question. What do our residents most care about? What do their family members most care about? What do the referral partners most care about?

The residents care about a fun, lively and safe environment. They care about price and quality, but I think they care about the community nature of our product even more. They care about the food, they care about the activities program, and they care about the things that make them happy and fulfilled. Our functional, purpose-built amenities spaces are the starting point.

We also want their life to be easy, so we think about things like the length of hallways and elevator locations. Walking down a hallway might seem easy to a person living in an apartment building, but at a certain age it becomes harder. Are there areas for residents to take breaks and maybe take a phone call or read a book along the hallway? Absolutely. Those fundamentals are the heart and soul of our business.

We do take risks, but the most important thing is to facilitate socialization in a beautiful setting. We think about that through technology, whether that’s life safety, air filtration systems or even dynamic lighting. Those are all things that we then take risks on thoughtfully, to determine if they are of any value to our residents.

We’re not in this business to build [design] magazine submissions, we’re in this business to build highly functional and enjoyable spaces for our residents.

What role is technology playing in driving change in senior living?

We have a very human business. I’m skeptical of layering tons of technology into the foundation of our business. However, I think the tools that are tangential to our business will certainly be affected by technology.

An example of that is communication. Communication to our residents. Communication to our team members. Communication to our residents’ families — building trust and starting a conversation around ways to make our product better are areas where we are seeing technology help a lot.

There will also be technological changes in how we provide medical care in our communities. Telehealth has a real shot of improving our offering. It’s not going to provide the care that we do, but we’re also not doing a lot of diagnoses. Our residents either have to go somewhere for that, or have someone come in physically for that. Through telehealth, we can shortcut that process and help our residents thrive more quickly. Telehealth is also easier on the provider and I think that’s a real area of potential opportunity with technology.

I also continue to see advances in construction technology that is agnostic to senior living, per se. If we are able to build our buildings more efficiently, at lower costs with similar or higher quality, we can rent our units for less and earn the same return.

Then on the staffing side, we’re seeing a bunch of interesting technology around recruitment and training. These tools help make us a great company to work for and improve our ability to find strong team members. Again, it is somewhat agnostic to senior housing but moving forward quickly.

Do you think senior living as an industry is changing fast enough?

Historically senior living has not been fast to evolve.

At the end of the day, our core product is trust, responsiveness, compassion, and professionalism at scale. That’s why those who have been in this industry for a long time aren’t getting swept away by the next new thing, because it doesn’t change the fundamentals of our business.

The first thing that I was told when I entered the industry was, we have no idea what the desires of the future residents will be, but we know it’s going to be something different than it is today.

As different generations come through our industry, we have to adapt. I believe that those adaptations happen on the margin versus wholesale changes, outside of large regulatory features. From a consumer perspective, I think as long as you have the core of the business right, and that human side right, you can adapt on the margins.

You need to do things like unbundling your products or not requiring certain services to make it more a la carte. Change things that will appeal to the next generation and how they think about their finances and the value they’re getting in return. At the core, every generation will value trust, compassion and responsiveness.

How are you thinking about the market Anthology serves going forward?

We would like to be able to offer an attainable rent in middle to upper tier suburbs of metro areas — what I would consider infill suburban —which allows us to offer high-end physical environments at an attainable rent.

Is there anything we haven’t talked about that you want to share about either your thoughts on change or the future of Anthology?

I think our industry has done an amazing job through COVID, in what couldn’t be a more difficult environment.

Senior housing has proven its resilience by keeping the majority of residents safe in independent and assisted living and memory care. Now we are showing that value as industry trends point in the right direction from a lead funnel, move-in and labor perspective. I think the future is bright for our industry.