A concerted approach to capital deployment has long been a benefit to senior living providers looking to grow or improve upon their existing properties. But with owners battling shrinking budgets while still recovering from COVID-related occupancy declines, capital deployment planning has become essential.
The process starts with a basic concept: the project should be clearly defined as the right project in the right place, at the right time and with the right budget. Yet not all projects are set up for success — even under this approach.
“It’s amazing how many people don’t follow this process, and then get to projects midstream and have a number of questions around the project’s viability,” says Joe Daniels, Vice President of Business Development for Direct Supply, a technology-centric company that helps operators improve their operations and outcomes. Direct Supply’s Aptura division is specifically focused on creating safe, desirable senior living spaces while boosting operational efficiency.
“When those questions of location, cost, investment and timeline aren’t defined early and often, that can lead to trouble down the line,” Daniels says.
3 business benefits of capital deployment planning
The benefits of capital deployment planning are countless, but generally fall into three categories, Daniels says: unparalleled ROI, enhanced savings and improved marketability.
Unparalleled ROI. Owners achieve unparalleled ROI when they put in the work upfront to plan for investments. This may involve utilizing strategic project evaluations and interiors assessments, both of which Direct Supply Aptura provides through its team of experts and technology offerings.
A strategic project evaluation identifies where the dollars are best spent and weighs a variety of options, such as spending on design improvements versus converting care types or increasing dining options.
“This is essentially developing an underwriting document that can help with gathering financing and capital approval to drive the project forward,” Daniels says.
Enhanced savings. Achieving savings may come down to scalability in the case of a portfolio of projects, but even projects that are not in the same market can realize efficiencies.
“Some do one project at a time, and others have a portfolio of work they need completed,” Daniels says. “There are inherent savings when you tackle a cluster of projects at once. But they don’t have to be in the same market; we can deploy resources to mobilize and run projects concurrently, driving huge savings.”
Improved marketability. Marketability should be a major benefit of capital deployment and should be considered upfront far before capital is deployed. This means investing to make the resident experience what it is intended to be, and in today’s market, that approach should start with technology.
“Technology is not a nice-to-have, but a must-have,” Daniels says. “As the demographic shifts and more baby boomers move into senior living, the decisions will no longer be made by the 53-year-old daughter of the residents and will be made much more by the residents themselves.”
Currently, Direct Supply Aptura sees clients focusing on several basic technology categories: high-speed internet, emergency call systems, and fall detection/prevention technology and medication management.
Communities that are most marketable will recognize the technology investment needed to support incoming residents, starting with the fact that many of them will move in with six to seven of their own Wi-Fi-enabled devices.
“A backdrop that supports this will make your product more attractive going forward,” Daniels says.
Further, all technology investments should consider three questions:
- Does the technology have the potential to increase revenue?
- How does the technology reduce expenses?
- Does the technology lead to improved outcomes for the residents?
Executing on capital deployment plans
With a plan in place, operators should ensure they have the right team to execute. This may be an internal team or an external provider such as Direct Supply Aptura that can monitor progress and address unforeseen issues. This includes monitoring project progress in real time with data, planning for and addressing issues that arise in the field and reporting milestones around project status.
“Having someone in house or externally to be your eyes and ears when problems occur is important to making sure the plan is followed,” Daniels says. “Once you have a solid plan you feel confident about, it’s about having a team on board that can execute on it.”
This article is sponsored by Direct Supply. To learn more about how Direct Supply Aptura can help optimize capital deployment across your portfolio with its unique planning, design and execution model powered by technology, visit Aptura.net/contact.
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