Priya Living Founder and CEO Arun Paul is aiming for what he calls the “holy grail” of senior living — a premium product at an attainable price point.
But achieving that depends in large part on how Priya defines “luxury.”
“If you think about it as we do, true luxury is experience,” Paul said during a recent appearance on SHN+ TALKS. “It’s, does a place get you to think and feel differently? It’s not thread count. It’s not the stone that you’re using in the countertop.”
Paul founded Priya after failing to find a senior living community that was a good fit for his parents, who immigrated to the United States from India. Now, Priya has forged a partnership with Welltower (NYSE: WELL) and is bringing its innovative model — which showcases the opportunity in serving more diverse populations — to new markets.
We are pleased to share the recording and this transcript of the SHN+ TALKS conversation with SHN+ members. Read on to learn about:
— Why Priya has shifted from an active adult to a more traditional independent living model
— Where Priya is developing new communities, and the role that urban farming and virtual reality will play in them
— The benefits of intergenerational living and the obstacles to creating these types of communities
— Why Paul believes Welltower is an “eye in the sky” that helps Priya continuously improve
Based in the Bay Area of California, Priya’s portfolio includes four operational communities in the Golden State, and five projects under development in other markets.
The following has been edited for clarity.
[00:01:35] Tim: Can you briefly describe the history of the company?
[00:01:46] Arun: Sure. My background is outside of senior living. I have been in the hospitality business primarily. Priya was born from a personal search I went on, looking for senior living communities for my parents.
My parents immigrated to the U.S. from India in the 1960s. When I went out and looked at communities, I just didn’t see something that really spoke to them, or I felt or they felt was a good fit.
That’s where the company started. We’re based in the Bay Area. We opened our first community here in 2012 and have three communities now in the Bay Area. We’ve got a community in Los Angeles that’s opening and then we’ve got five projects under development, in Dallas, Houston, Atlanta, Detroit and Chicago.
[00:03:02] Tim: Can you describe, historically, what’s been the typical Priya operating model? In terms of the development pipeline, has that model changed at all?
[00:03:17] Arun: Yes, so we started with I guess what you would call really a senior/multifamily model in California.
Our first project was a conversion of an existing multifamily building. We kept the multifamily zoning, it was actually not age-restricted. Even though our whole business plan was to serve elders, that community ended up becoming an intergenerational community. We had young people who wanted to move in. Certainly, it was an elder-focused community, that’s something that was clear to everyone who lived there, but young people wanted to be a part of that. So that was a really cool outcome of having a multifamily building that wasn’t formally age-restricted.
Going forward, we are moving towards a more traditional model, which is age-restricted and independent living versus active adult/multifamily.
The driver for that is really that food is the number one question. Having a good response on food — and certainly, at our active adult communities, we have programming around food — but there’s a difference between preparing food on-site and having it prepared off-site.
[00:04:58] Tim: In terms of the food specifically, did you feel like that is something on the consumer side that your residents of the active adult properties would want even a more standardized food program?
[00:05:35] Arun: Well, what we do at our active adult communities, we do a lot of programming around food. When we opened the first one, this was back in 2012 — nowadays, you can use apps to source high-quality food very efficiently that’s prepared offsite, but back then the [tech] wasn’t around. We were running to the restaurant, picking up people’s food, bringing it back. There’s certainly solutions in active adult for food that makes sense for a lot of people. I think there is that approach.
What we were hearing is a desire for residents to have the quality of the food. When you’re … using outside vendors, there’s a quality issue. I think for us, that’s what it really boiled down. That’s an area that we focused on and have done some, we think, really interesting things on the food onsite, the culinary side. We’re excited about it.
[00:07:17] Tim: On that note, I think you mentioned to me that there’s going to be an urban farming component to some of these new communities, is that right?
[00:07:26] Arun: Yes, that’s right. In all the new communities, we dedicated interior space for farming, and the technology we’re using now, it’s hydroponics, which is basically, you’re not using soil as the base, you’re using liquids. It’s a very efficient form of production. The technology here is going to change. I think what we want to do is dedicate space to whatever the best technology is for on-site food production.
Certainly, by doing this, our goal is not only to feed the community but generate surplus that we can then distribute through local farmer’s markets and food banks. Having [that] onsite, there’s a lot of benefits on the food production to the food quality. We think it’s something that makes a lot of sense for a lot of reasons. We’re really excited about that.
[00:08:50] Tim: That’s really interesting. You mentioned technology, can you expand on that a little bit more broadly, are there technology components that you’re looking to integrate? I think you’ve also mentioned to me that you see promising virtual reality, for example.
[00:09:07] Arun: Sure. Virtual reality, we’re very excited about that. There’s so many applications of virtual reality.
I think for us, the one that we’re focused on is wellness. It is a very powerful mental wellness tool. If anyone spends time meditating, which I like to do, it’s incredible. It’s a very efficient tool for mental wellness. We’re using it there. We’re very excited about just a lot of the capabilities in virtual reality, and in our communities, we’re creating virtual reality studios, so that there’s a space for people who use virtual reality.
[00:10:11] Tim: I guess I haven’t thought about needing space for that. I would imagine people just sitting on a couch and throwing on some goggles. What is a virtual reality studio? What are the capabilities that need to be there, the features of that?
[00:10:25] Arun: Now, it’s a good question. Sure, you can use virtual reality anywhere. You could be sitting in your car that you have parked, and put on a virtual reality [device].
You could do this anywhere, but just creating a space where — part of that is having a quiet environment, some of that is having comfortable seating, so you have a place where you can relax, put-your-legs-up. Also, you can control the light .. we’re excited about virtual reality and how we’re going to integrate it in programming, so if it’s an important part of your programming, it deserves a little bit of space. That’s the way we think about it.
[00:11:32] Tim: I want to go back to the intergenerational component that you mentioned already. With that first community, it happened by happenstance, but I know from our past conversations, you saw some benefits from having that intermingling of generations. As you move now toward a more standard independent living model, do you see opportunities or do you have a strategy to continue to have some kind of intergenerational component?
[00:12:12] Arun: Well, we love it. It is something we would like to do more of.
Now, I think there’s actually some challenges there in zoning, because if you go into the municipality … I mean, senior living, people understand that. They like it, generally. It depends where you are, but it has value, like the traditional model to municipalities versus another multifamily building.
Yes, we think [intergenerational living] is an incredible thing. I think, for us, what was the most surprising is finding that there is a cohort of young people out there that want to live with elders. That was a discovery for us, because we weren’t aware of that.
I don’t think when I was at that age, I was looking for those living opportunities. I don’t know many people that were, but yes, there is a cohort out there, and they like being around residents, the neighbors whom they respect and admire, and obviously [there is] a very different energy than millennial housing. There’s a lot of good there that I think some young people appreciate.
I think I’ve shared with you this story. We’ve had — with our original community, our first community — we’ve had babies born at the community, which doesn’t happen often in a senior living community, but it’s a great thing to see.
At some point, the family will end up moving out a distance. You need space for a kid. But until then, the baby is being passed around the community and has dozens of aunties and uncles.
[00:14:56] Tim: I imagine another part of the draw for younger people for that community was the location, in Santa Clara, in an urban area with a lot of access to transportation, to amenities, to dining, to restaurants, et cetera. I think we’re seeing a demand for that from older adults.
On that zoning question, I wonder, as this occurs more and more, I guess I’m imagining a special zoning dispensation or something to have X number of units in an otherwise age-restricted building, you have flexibility to rent them out [to younger residents] or something like that. Do you think that would get any traction?
[00:16:01] Arun: I think that’s a great idea. To actually try to just quantify it, to quell that discomfort I think communities have on just adding multifamily. If you can quantify that, like you’re saying, maybe it’s 20%, or whatever that number is, it could work. I think that’s a great idea.
[00:16:35] Tim: We’re even seeing some buildings — like there’s one in Portland, I think it’s called The Canyons, that is not age-restricted, but it’s geared more toward older adults. I think they were having some trouble attracting younger residents but they ended up dedicating 20 units or something to an Airbnb-type service for short-term, or medium-term residents.I do feel like there’s experimentation in that way.
You mentioned that Priya sprang from your personal experience trying to find a senior living community for your parents. I think that the communities you’ve created are very welcoming specifically toward Indian older adults, can you talk about that component of the model a little bit? Do you see a bigger opportunity for senior living to serve more diverse resident populations?
[00:17:43] Arun: Absolutely. The phenomenon, it’s been called the “browning of the graying of America.”
It’s a demographic phenomenon, and anyone who studied numbers, you can see the growth rates are huge. Certainly, just from a business standpoint, there’s that, and I do think the living industry should pay attention to that.
Then, of course, beyond the business, there’s a social need, there’s a moral obligation. That’s what we’re doing. But I do want to add to that our approach, from the beginning, what I told people is, “My parents are Indians but I’m an American.” We, from the beginning, wanted to create communities that felt and are inclusive, they’re modern, they’re contemporary, they bring people in. They’re places that people want to be, no matter where you come from.
Our communities have, certainly, the Indian immigrants. The aunties and uncles, we call them, are a big part of that. But we have people that come from outside the [Indian immigrant] community. They love it, they love the vibe. There are people that are culturally adventurous, people that dream of moving overseas when they retire to live in some other country, and maybe that doesn’t happen, but you have an experience closer to home.
I think, as a society, that’s the beautiful thing about America, and just the way that this can happen. We do certainly as an industry need to be aware and act on being inclusive and I don’t think we have been, up until now. I think it’s still an issue. I also think things always change and things always change for the better. I think things will certainly change.
[00:20:49] Tim: Can you talk a little bit about more about that balance you’re just talking about in terms of appealing to the Indian immigrant population specifically, but also creating an atmosphere that is attractive to everyone … How do you approach that, create that balance?
[00:21:30] Arun: You always want to create places where people love to be.
I came from outside senior living. I spent a lot of years in the resort business, and the resort business is about making people happy. That’s what we want to do. That’s what we want our communities to feel like for anyone who walks in there. I think the great thing is, the way we view it is, we’re just providing an alternative. I think there’s a lot of product that’s very similar.
One of the great things that we have is, I think a lot of the elements of Indian culture have universal appeal. Yoga is a great example. If you love yoga and you’re a senior, you might choose us based on our yoga program.
A lot of people love Bollywood. A lot of people love Indian food, a lot of the elements of that are becoming increasingly popular, [like] plant-based food. For our communities … we’re using hydroponic farming, doing everything locally sourced, I think these are things that transcend [Indian culture].
And the other thing to keep in mind, folks that come from India don’t want to eat Indian food every day. Look, all of this comes down to execution and intent. There are others in this space that are not as intent on creating [integrated] environments. I think, ultimately, it is easier said than done, but I think that’s an area that we feel we’ve done very well.
[00:23:52] Tim: Can you talk a little bit about your experience through the pandemic and maybe specifically touch on any operational changes that were made in response to COVID-19, but that you think might persist even as we eventually hopefully move past it? I think if I’m remembering correctly, you talked in the past about being inspired by Peloton to try to make the switch to more virtual activities, for example.
[00:24:53] Arun: It was an incredible crisis, certainly. We locked down early, I think we moved very fast. Obviously, we were really concerned about this and all of the protocols on restricting visitors and sanitation and all that stuff.
Crises create opportunities, as well. We were not doing digital programming 18 months ago, it was all in person. Because of COVID, like everyone, I think, we had to go digital. That will stay.
Certainly, in person is coming back, but the power of digital is huge, because it’s asynchronous. If you don’t make it to that yoga class, you can do it in your apartment whenever you want. You build a library that can be reused. One class becomes 10, becomes 50.
Peloton I think is a great example. It’s something the senior living industry should think about, right? Because if you look at what Peloton did to SoulCycle, are we opening SoulCycles? There is an element of it that’s a threat, but I think it’s a great opportunity, and we’re really excited about it.
[00:27:19] Tim: I guess speaking of Peloton … “wellness” is a big buzzword in senior living. I think it means different things to different people and means different things to different operators. How do you think of what wellness means for senior living residents? Are there ways that you’re trying to make Priya a wellness-focused company?
[00:27:57] Arun: Sure, absolutely. It’s important on so many levels.
At every level, it has to be top of mind. We were talking about food, it all starts with nutrition. I think we’re understanding that more and more, and I think our commitment there — we were talking about on-site food production, [which is] really the cleanest form of producing food, because once you introduce soils, you introduce pesticides. It starts with that.
Yoga for us has always been a very big focal area. Meditation is another focal area and cardio fitness and all those things are important, but it extends to the design of the communities.
We are using biophilic design, so, it’s kind of introducing landscape, natural elements, air, water inside to improve human wellness. There’s so many elements there. There’s a lot that can be done, and certainly, we haven’t even scratched the surface … But I think it’s exciting, and I think our understanding of wellness as a society has obviously increased. We know a lot more today than we did 10 years ago. Putting those things into practice is exciting.
[00:30:15] Tim: How did occupancy hold up during the pandemic, where is it at today, and when do you anticipate being back at pre-pandemic levels?
[00:30:37] Arun: The communities that we had stabilized before COVID actually held up very well, and those have run at 95% to 100% occupancies since the beginning.
We saw a slight dip early in COVID because obviously move-ins [halted]. We did have move-ins scheduled and that didn’t happen. Those have rebounded now and are back at pre-COVID levels.
The challenges came with projects that were really in construction and development. That’s where I felt like the challenge was greater. On the construction side it had a big impact on timelines. Leasing a new project from zero is certainly always a much bigger challenge than, I feel, maintaining occupancy in existing projects. We did have challenges there, but I would say in the last three to four months, we felt things, I don’t want to say all the way back, but certainly much, much better than they were last year.
[00:32:04] Tim: When are the projects under development slated to open?
[00:32:22] Arun: We’re looking at those delivering in mid ’23. We’re a ways out.
[00:32:33] Tim: Got it. Just in terms of market selection, I mentioned that that initial project in Santa Clara was in this area that was walkable and amenitized and pretty urban. Are you still targeting those types of locations even as you move more toward a more traditional independent living model?
[00:32:56] Arun: Where we can, yes. Some areas just don’t have a real TOD [transit-oriented development] presence. You have to have it. Some of these markets we’re in now just don’t really have something you would really call transit-oriented.
What you’ll see in Houston is going to be different in terms of TOD than what you’ll see in San Francisco. Where we can find it, yes. Although I will say we have experience. Our experience has been that our residents are not using TOD as much as we thought they would.
Some of the transit options continue to be senior-unfriendly. If you’re in an older train station and you’ve got to take the steps, there’s no elevator. BART has a number of stations where you don’t want to use the elevator. There’s things like that, where I think transit, in general, is not senior-friendly. Then really it’s the dedicated, customized seniors transit solutions that now we’re doing. Shared-ride vans, that kind of stuff.
[00:34:52] Tim: That’s really interesting. I have wondered that, when we’ve seen the trend of transportation-oriented developments and mixed-use that includes senior living. It’s been a question in my mind how successful they’ll be in the long term, because you could ask seniors today what they want in a community, and they’ll name a bunch of things, but then will they actually use them once they move in?
Then also to what extent are you appealing to the resident versus the family member who wants to have that convenience of having mom or dad close to where they work out or shop or whatever?
I don’t know if there’s a question in there, but I guess it’s, do you think that maybe senior living developers or operators that are looking at these mixed-use projects need to exercise some caution that some of these projects might not run as smoothly as the expectations might be going in?
[00:35:54] Arun: I think TOD and real mixed-use has a lot of value outside of transit. I think there’s other benefits there that seniors certainly could, depending on the situation, value. What kind of retail you have there matters.
I think the transit piece of it, just because you have a train station or a subway stop nearby, and whether seniors will use that and want to use it, I think that’s the question. You could look at a site and say, “Look, there’s so many other things here that even if they don’t use the train or the subway, there’s a lot of good things here.” I think it still could make sense.
[00:36:56] Tim: Got it. We got a question from the audience. This is talking about going to virtual: COVID showed us the effects of isolation, especially on the older demographic; however, there are many positives to offering virtual programming. How do you see balancing the in-person connection with the virtual programming?
[00:37:15] Arun: I think it’s just having it as an option. I think residents can decide.
I think, certainly, our commitment is there to in-person, but I think it really depends on the resident, it depends on the day of the week. That is, maybe you don’t feel like going downstairs on that day.
I don’t see it replacing in person, but it’s nice.
The other thing that we’re looking at is, the thing about doing virtual that gives you a big advantage versus in person is you can have your best instructor — if, say, it’s a fitness class, you may have your best instructor teaching across multiple geographies.
… I think we’ll just see what people want. We’ll just try to put out good content and then see how people respond to it.
[00:38:55] Tim: Can you talk a little bit about the partnership with Welltower. How’s it been going? Any particular benefits or challenges that you can describe for us?
[00:39:06] Arun: It’s been incredible, I think.
Certainly, even before entering into the partnership, we were very aware of all the value that Welltower could bring, but I think it’s surpassed that. I feel they do so much more than allocate capital.
There’s a lot of things happening within Welltower. I think for us, getting better is always the number one objective, and I can say that we’ve certainly gotten much better just working with Welltower. I think also, they have a vision in terms of where the industry is headed, which matters to us.
[00:40:18] Tim: When you said there were things going on at Welltower that are helpful, I’m thinking from my own conversations with them about their data capabilities. Specifically, is that what you’re referring to?
[00:40:30] Arun: That’s big. That’s there but it goes way beyond that.
They’ve got resources on operations and sales and marketing and just across the board support is there for operators who want it. Certainly, on the development side, they’ve got strong in-house teams that can help. Data, that part’s really cool.
We’re a bit in the weeds, I guess, just doing our thing, and [with Welltower] you’ve got really this eye in the sky. They can see what things are happening, and that’s helpful information for the people on the ground.
[00:41:45] Tim: You mentioned Welltower’s vision and I know part of that vision has been finding novel ways to integrate health care into senior living. There are various ways Welltower is trying to do that. They’ve got a partnership with CareMore, for example, to create onsite clinics. They’ve got health system partnerships, too, where residents of senior living communities might go to a senior-focused clinic in the area.
What are you thinking about in terms of health care and enabling access or providing some health care for residents given that, I think, historically, at least you’ve been pretty low acuity?
[00:42:31] Arun: Well, that’s another area that’s an area we want to get better in. We have had conversations with Welltower about what they’re doing and obviously, there’s a lot of thought that’s gone into that that we can benefit from. I’m excited about that as well.
[00:43:12] Tim: No imminent plans you can share to-do on-site clinics or anything like that?
[00:43:20] Arun: If I had something that was fully baked like that, I’d share it. Look, I think it’s exciting, all of the things that are happening, and frankly, what we’re talking about in four months will be different than what we’re talking about now. Some of this, internally, we haven’t gotten there in all of these things yet, but that’s the fun part.
[00:43:49] Tim: I need to bring up staffing, which along with COVID is the big challenge hovering over the industry right now, at least based on the conversations I’ve been having. How has recruitment and retention been going and any initiatives that are underway to try to meet the workforce challenges?
[00:44:22] Arun: We don’t have any magic bullets here. We’re not developing any robots in-house or anything. I guess Uber, all of a sudden [could decide] to do self-driving cars … there aren’t any self-driving senior living communities yet.
Two things that we try to do. One is create a great work environment.
I know it sounds, well, I don’t know how that sounds to people, but I think when we think about the community, the design, the community, the vibe — here’s the thing. If you have happy residents, you have happy staff.
And so what we found, and I think some of this is because of our strategy, and the model is, when you have strong relationships between the residents themselves, the staff are the ones that benefit.
I think what that means for us is, and I think what we’ve experienced is, our employee turnover has actually been very low. We keep people.
Then the other thing we try to do is think outside the box on staffing. Like our dining program, for example, the delivery model is more of a banquet-style model, you have your lunch and you’re not ordering off a menu with 50 items. All of these things, obviously it takes people to do this stuff. There are ways, I think, just on the operations side, we can be thoughtful, but obviously, we face the same challenges that everyone else does.
[00:46:49] Tim: You said turnover is low, do you have a number you can share?
[00:46:58] Arun: It’s less than 10%.
[00:47:01] Tim: Wow. That is low. In senior living, some people have 60% turnover, so 30% could be considered low. I’m curious, given that Priya, on the resident side, does appeal to Indian immigrants, does that have any carryover into who staffs the communities? Do you draw from the Indian immigrant community or is it totally separate?
[00:47:39] Arun: No, we have a diverse workforce, and I think it’s really who’s good at what they do.
Certainly, there’s so many elements to that that go beyond, that are more important elements than someone’s ethnicity, certainly. Cultural curiosity, I think that’s something that needs to be there, and just respect and some of those things, but I think we actually embrace a challenge of doing it that way, because I think it sends a message about what we’re all about.
[00:48:41] Tim: I don’t think I asked you this earlier, although I meant to, I think that the communities in development are a little larger than the ones that you have operational, is that right?
[00:48:52] Arun: Right.
[00:48:53] Tim: What’s the unit count comparison there?
[00:48:57] Arun: Of our existing communities, the largest is 122 units. The new ones are on the low-end, 150. We’re in that 150 to 180 range.
[00:49:14] Tim: Going to the independent living model, you needed the scale to support that?
[00:49:25] Arun: Yes, I think you do need scale. Sometimes, depending on the project it’ll drive [higher costs], depending on does the parking need to be structured parking, [et cetera]. Certainly cost is a consideration there, but we think it works.
[00:50:23] Tim: I’m curious because we’ve seen the active adult rental market really heat up in the last couple of years and you’re moving more toward independent living. Do you have it on the radar at all to do a more active adult projects in the future?
[00:50:43] Arun: Yes, we like active adult. I just think we go into a market and — it really starts with location, and then we look at the market. We look at active adult. We look at independent living. Then we make a decision what works best for that market.
We are going a little heavy right now in IL just because those seem to be the projects that work in these markets, in these specific locations. I think both products, certainly, there’s demand for both. We don’t view it as one or the other. We’d like to build in both areas.
[00:51:32] Tim: Got it. In terms of rental rates, are you looking at market rate, or more affordable, more luxury?
[00:51:42] Arun: We certainly try to target a market rate. We’ll try to do even better than market rate on the pricing side. We want people to feel like there’s value.
We also are positioning it as a premium product. That’s a holy grail. If you can do premium product at affordable prices — you want both. We’ll see how that goes. That’s obviously a challenge as well.
I think the question is what’s luxury? What does luxury mean to people? If you think about it [as] we do, true luxury is experience. It’s, does a place get you to think and feel differently? It’s not thread count. It’s not the stone that you’re using in the countertop. That’s not luxury.
From that point of view, yes, that’s how we want people to feel. We also, on the pricing, want to try to do both. That’s our challenge.
[00:53:10] Tim: I love that idea that luxury is experience. Can you talk a little bit more about creating that experience? I know that we’ve already talked about all these major components of it, from dining to tech to all the things that we’ve already talked about, but specifically, you just mentioned the importance in your model of connecting residents to each other. That struck me as not something that necessarily every provider is super focused on … How you think about creating that sense of connection?
[00:53:53] Arun: We don’t have to do anything there.
What we talk about internally is we’re building a stage. That’s what these senior living communities we’re building, that’s what they are. They’re a stage. The residents, they’re the actors, actresses, in their own play. That will happen. That’s what we found. It’s really about creating this space where these people, our residents can come together.
I think the connection you see at our communities — certainly I think there’s a power of affinity housing, which goes way beyond race, ethnicity. You’d see university alumni, you’d see LGBTQ, you’d see veterans — whatever that is, I think in all those situations, there’s real power there for that connection.
Yes, we do a lot of programs to facilitate social interactions between residents. That’s really what that’s for, but all we do is build the stage. That’s what we do, for the residents to take over.
[00:55:43] Tim: That’s great. Some providers talk about apps to connect residents or having a social concierge to connect residents. Are you doing any of that or thinking about any of that?
[00:56:00] Arun: No, we don’t. In the communities, WhatsApp happens to be very popular. That’s the preferred social media tool in the community. Community directors will use WhatsApp groups … I think there’s enough tools out there that you just don’t want to create another tool when people are already overloaded with tools. Existing technologies are there.
We don’t have a social concierge. Our focus is just if you create great programs where people show up, that’s the best that we can do.
[00:56:51] Tim: Programs being things you’re talking about like yoga.
[00:56:55] Arun: Yoga, fitness, social events. All the stuff that happens multiple times a day. If your focus is there and people are coming, that’s the glue. That’s where you create those connections between residents.
[00:57:15] Tim: I know we covered a lot of ground. Is there anything we haven’t talked about that you wanted to share or just I guess any messages you want to leave our audience with?
[00:57:24] Arun: No, just, I appreciate you having me on and thank everyone for coming. Hopefully, I’ll get a chance to see you all sometime soon.
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