A new senior living company is spinning off from The Avamere Family of Companies with a goal of rebranding and re-focusing operations for a new generation of senior living residents.
The new operator, Arete Living, on Tuesday announced it is spinning off from the Wilsonville, Oregon-based senior care company and is now operating its 28 senior living communities across seven states.
The company’s portfolio includes Ovation, the senior living brand designed for “the resident of tomorrow” that Avamere first announced in 2018. That roll-out hasn’t been without its challenges, including a four-alarm fire that destroyed the nearly-finished independent living component at the location in Omaha, Nebraska.
Sarah Silva, who previously was president of Avamere’s senior living division, is also president of Arete Living. She is joined by another former Avamere leader, Thomas Cloutier, who is working as the new operator’s chief marketing officer.
Avamere Health Services Founder Rick Miller is Arete Living’s board chairman.
In spinning off Arete Living, Silva and the company’s leadership team are creating a smaller, more nimble organization that can more quickly respond to the quickly changing needs of older adults. And it is aimed at refocusing the company’s efforts on a less clinical, more “modern” kind of care for residents.
“We want the name Arete Living to be synonymous with excellence, synonymous with integrity, synonymous with innovation,” Silva told Senior Housing News.
Building a new brand
Arete is an ancient Greek concept meaning “excellence.” And that is what Silva and the company’s other leaders are trying to achieve. The company’s logo, which looks like a stylized letter A, is also meant to symbolize a mountain peak and honor the company’s roots in the Pacific Northwest.
They do not have ambitions to become the largest senior living operator. Instead, Silva said her goal is to make Arete Living “the best senior living operator in the country” for its residents and staff.
The company’s leaders’ first two immediate goals are to build a more tech-enabled operational model, and to expand the Arete Living portfolio beyond where it is today. Currently, the company has management contracts with ownership partners that include Ventas (NYSE: VTR) and Chevalier Group.
And Arete Living is starting with a good foundation from which to grow, Silva said. While average occupancy took a hit during the pandemic, the operator’s communities — most of them offering assisted living — are regaining lost ground in 2022, with three communities now completely full.
Though the operator’s rural communities have taken longer to recover than those in more densely populated markets, “over the course of the last four to five months, we’ve seen those catch up as well,” Silva said.
She credited Cloutier with those results and added that he has done “a truly phenomenal job of instilling a culture of sales.”
“[We’re] making sure that we know our residents before they come through the door, and we’re spending an incredible amount of time with them and creating memorable experiences for them,” she said.
Central to the company’s growth plans is an effort to redefine senior living for a new generation of residents. In Silva’s view, the industry has reverted to a more clinical model for residents amid the pandemic. And with Arete Living, she aims to course-correct by giving residents more agency.
“We’ve slowly eroded the residents’ ability to say … ‘the care that I need should be the smallest portion of what my life entails,’” Silva said. “Modern senior living is whatever that resident tells us they want. It is resident choice.”
When thinking about what residents want from senior living operators in 2022, Silva considers the desires of her own parents.
“For my own parents, that will involve making sure that you can be at mass multiple times a week, making sure that you have incredible food and making sure that this new home is just a continuation of their current life, not an entirely whole new chapter,” she said. “To me, modern senior living is a personalized experience that is dictated by every individual.”
But the company cannot achieve those goals without a strong and happy workforce, Silva said. That thinking is underscored by the fact that she started her career with Avamere as a caregiver at a community in Hillsboro, Oregon, when she was 19 years old.
“One of the things that makes Arete unique is the fact that most of us came from the frontline,” she said. “We know what it’s like to be a caregiver, and we know what it’s like to be a med tech. We’ve been through every role in our organization, and we are highly invested in the individual team member experience.”
The company has implemented more flexible scheduling and higher wages to attract and retain workers, and it is constantly working to get staff as much time with residents as possible. That appears to be paying off, as Arete Living in recent months has been able to substantially stop using agency labor, and the number of overtime shifts is also trending downward.
“Our job as leaders is to invest in them to get them to the next level of their career, wherever that might be,” Silva said. “And know that none of our other goals will ever be met if we don’t get our team member integration and our team member commitment right.”
As for what comes next for the burgeoning Arete brand, Silva said to expect an early portfolio expansion and the announcement of “some innovative JVs related to technology.”
“We really have it broken down into lease opportunities, management opportunities, new development and JVs,” she said. “Very likely, the most immediate opportunity for growth comes out of management contracts.”
Ovation still standing
Much of Silva’s vision is already coming together in Arete Living’s Ovation communities in Omaha, Nebraska; and in St. George, Utah. Ovation communities are “active lifestyle villages” with 300 units: 150 dedicated to independent living and active adult, 90 for assisted living and 60 for memory care.
While the Ovation brand exemplifies Arete Living’s future direction and focus, the company has encountered challenges getting it off the ground. Chief among those challenges was the fire in April that razed the independent living building at Ovation Heartwood Preserve in Omaha, which sat across the street from the assisted living and memory care portion of the community.
The fire occurred just weeks before the community was due to open, which Silva said “could have been culturally devastating to an organization.” But despite the setback, the community soon rebounded — largely thanks to Ovation Regional Vice President and Heartwood Preserve General Manager Stephanie Grade.
In fact, the community is continuing to take independent living deposits, even as the operator redevelops and redesigns that part of the community.
“It only took Stephanie and her team less than six weeks from that moment to turn around and get the assisted living and memory care communities in Omaha open,” Silva said. “They are leasing up that at a more rapid rate than we originally anticipated that they would, given what had occurred.”
Another change came in the form of the departure of Nicolette Reilly, who previously worked as Avamere’s division president for Ovation but left for a long-sought role as senior vice president of quality for the Oregon Health Care Association.
With Reilly’s help during the transition, the Arete Living team was able to assume management of Ovation by June 1.
“We have been overseeing that portfolio for a couple of months now,” Silva said. “And I will tell you Nicolette keeps close tabs.”
Separate but still close
By spinning off from Avamere, Arete Living is becoming an independently governed company with its own leadership structure and culture. But that doesn’t mean it is cutting ties with Avamere, Silva said. In fact, there is “still a high level of collaboration between the two companies,” and the two companies share some “exciting joint-ventures,” she added.
Arete is even based in an office that is just down the road from Avamere’s current headquarters in Wilsonville.
“Most of us had worked for Avamere for many years, and it was a great central location to where our employees already live,” Silva said.
Leaders at Avamere initially started discussing a spin-off for the company’s senior living division early in the pandemic. The company had doubled its senior living division in the previous years, but with the rapid onset of the pandemic and a quickly changing senior living resident profile, Silva and other leaders realized it was time for big changes.
“Once Covid hit and how quickly that change occurred, [we realized] we needed to have a small and nimble organization that was able to very quickly adapt and evolve to the ever-changing needs and desires of our customer,” Silva said.
Avamere started as a skilled nursing company. And with the spin-off of Arete Living, it is once again becoming one under the direction of President Carl Tabor.
“At the end of the day, I know and fully believe Avamere is a best-in-class skilled nursing operator, so obviously it’s in our team’s best interest to continue a relationship with them,” Silva said. “We’ll be fighting for their business, and they will be fighting for our business in the same way.”