How Scale Helps the Nation’s Largest Senior Living Communities Survive and Thrive

In the senior living industry, size is not a guarantee of success. But for the nation’s largest communities, that scale has been a source of operational stability during the last almost three years.

Many of the largest senior living communities — all CCRCs or life plan communities — leaned on their size to weather operational downturns. Scale can be a double-edged sword, and filling a community with as many as 1,900 units is no easy feat. But the flip side to that scale is that, with more runway to deal with issues as they arose, these operators could withstand occupancy dips and staffing difficulties.

One example of that trend in action lies with John Knox Village, which with more than 1,500 total units is the nation’s third-largest single-site community, according to the most recent LeadingAge Ziegler 200. The Lee’s Summit, Missouri-based life plan community is big enough that it can afford to have a leadership structure of “higher-level experts,” according to John Knox Village Vice President of Senior Living Maria Timberlake.


“At a smaller community you might not have that,” said Timberlake. “We have really invested a lot pre-pandemic into identifying what we wanted our culture to be.”

But large operators aren’t immune to setbacks and challenges A recent report by Fitch Ratings warned that rising costs and a weakening economy is leading to a “deteriorating” 2023 outlook for the life plan community sector. Among the trends Fitch identified as deteriorating for life plan communities are personal income and affordability; real-estate values; labor cost and availability; non-staffing operating costs; capital input costs and cost of debt.

Conventional wisdom says larger communities also have larger payrolls and operational budgets than their smaller counterparts. And while scale is an advantage in good times, it can be a liability when expenses are high or occupancy is low.


Still, the operators of some of the nation’s largest communities have an optimistic outlook about the year ahead.

“Despite the forecast by Fitch, we anticipate continued strong sales for traditional Type A contracts,” said Monica McAfee, who is the chief innovation officer and chief marketing officer at John Knox Village in Pompano Beach Florida ;the seventh-largest CCRC in the country.

Occupancy, margins take a hit

Widespread cost inflation has pushed CCRC and LPC operators to get creative to maintain margins, continue unit turnover as steadily as possible and identify efficiencies to cut costs. And that has worked so far to tide them through some of the industry’s darkest days. As the CCRC and life plan community sector builds back to its pre-pandemic average occupancy of 91.5%, those gains are a continuing source of optimism.

Occupancy gains for CCRCs and LPCs have been steady in 2022. The segment’s occupancy increased to 86% in the second quarter for the 99 NIC MAP Primary and Secondary Markets, up half a percent from the first quarter and up 6.9% compared to non-CCRCs.

Demand has rebounded more strongly for assisted living than independent living, according to NIC. While assisted living occupancy still has not reached pre-pandemic levels, that is to do with new inventory added during the pandemic. But operators of large-scale communities still say they aren’t immune to the industry-wide headwinds related to occupancy and margins.

“It’s thrown everyone into survival mode,” said Jeff Evans, CEO of Cross Keys Village The Brethren Home Community, the fifth largest single-site community in the country. “Everyone is being tested. It’s like survival of the fittest.”

So far, the New Oxford, Pennsylvania-based community hasn’t shed occupancy like other communities have. Occupancy hit a low of 91% in 2020 before rebounding to 96% at-present.

Expenses are a different story. Margins for the community dropped into the negatives in 2020 and while they have surged back, the community is still largely breaking even at the cusp of 2023, Evans shared with Senior Housing News.

At John Knox Village in Florida, the community watched margins “almost double” what was budgeted in 2020, 2021 and 2022 as census fluctuated from 90% in 2020 to 94% in 2022, according to McAfee. McAfee added that the community was “fortunate to weather the storm” with such high occupancy figures.

“Sales remain robust despite inflation and rising interest rates. Florida continues to see record breaking moves from the Northeast,” McAfee said.

Not all of the communities saw relative strength with regard to census. Missouri’s John Knox Village, for example, shed 28% in occupancy for assisted living units at its lowest point before recovering to pre-pandemic levels this year. During that time, its operating margin fell 8%. By 2022, those margins had grown, though it’s still 3% lower than pre-pandemic.

The outcome was worse for the community’s skilled nursing units, which saw occupancy cut on half during the pandemic. Skilled nursing census hasn’t recovered since, and the company is now managing a $2 million operating loss for those units, Timberlake said.

Growth continues despite labor challenges

The nation’s largest senior living communities shared one thing in common: While labor pressures and other challenges caused them to slow or recalculate future growth, that didn’t put a half on those plans entirely.

Erickson Senior Living manages the Charlestown Community in Catonsville, Maryland., the second largest single-site CCRC in the country. Chief Operating Officer Deb Doyle outlined some of the company’s recent growth areas, from technology additions to emphasis on lifestyle and wellness. 

In 2022, the company invested in the development of a fitness smartphone application called Wellbeats that allows residents to participate in on-demand and live fitness programs, from yoga to meditation to daily exercises. Virtual reality (VR) technology has also been added into new exercise equipment, with residents also calling for the development of more outdoor spaces.

Doyle said the company’s biggest challenge was labor and outlined a recruitment campaign that resulted in more than 10,000 leads for new prospective employees, along with an advertising campaign to support managed communities.

“We are looking for workers for all aspects of daily community operations, from frontline dining servers, housekeepers and dishwashers to healthcare positions such as nurses, physicians and home health care aides,” Doyle said.

At John Knox Village in Missouri, campus redevelopment has been an ongoing part of the community’s heartbeat even through the pandemic. Later this month, the community is opening a new 52-unit IL apartment building with 48 units already pre-sold.

The community also is growing its service lines as much as its physical buildout. The community offers emergency medical services to all residents on campus via an internal EMS ambulatory team, and Timberlake noted the community will grow its EMS team and offer expanded behavioral health services in the future.

The community partnered with the Michael J. Fox Foundation as a partner for Parkinson’s research within its memory care component for underserved and minority populations. Integrating artificial intelligence-powered technology has reduced falls at the campus, and the community is looking at adding a new onsite health clinic in the future, Timberlake said.

“We’re providing a lot of the same type of support to keep people as independent as possible for as long as possible,” Timberlake added. “But it’s packaged so much differently than it was 30 years ago. It’s built into things that are lifestyle-oriented.”

Staffing remains the community’s biggest budget line item, and recruitment and retention require “constant attention” given the large-scale operations.

Cross Keys Village has invested about $80 million in campus redevelopment projects over the last seven years, with $70 million for other projects currently in the design and development process.

As leaders in many industries have chattered about for months, a recession could be looming in 2023.

Although any economic downturn would be bad for most people in the U.S., it could carry a silver lining for senior living operators in the form of pushing more job applicants to operators. Evans said the senior living industry is a “secure, stable employer that people migrate to” when there’s challenges elsewhere in the labor market.

Florida’s John Knox Village continued its growth initiatives during the pandemic, including its newest neighborhood, Westlake, a $150 million, 147-unit IL expansion, which is over 80% pre-sold and is scheduled to open early 2024. More recently, the community opened its state-of-the-art $37 million Pavilion with two dining venues, a bar and cultural arts center.

“Because we were able to pre-sell so quickly, we moved through the project rapidly and got ahead of the curve on some of those construction supply chain issues,” McAfee said.

In the coming year, the life plan community will explore scaling service offerings to the outside public, not just John Knox Village residents. Affiliations with other organizations are also possible.

“I think that’s something that is going to be an opportunity for 2023,” McAfee said.

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