The impact of Welltower’s new flexibility to self-manage certain independent living units will be felt all throughout the company’s senior housing portfolio, according to COO John Burkart.

Last year, Burkart said he thought the senior living industry was decades behind the multifamily industry’s operational sophistication. But by self-managing more than 45,000 independent living units and having more control over decisions at the property level, the Toledo, Ohio-based real estate investment trust (REIT) will have the ability to control costs and eke out better margins over time.

And what the company learns in self-managing IL units will be applicable to its other owned senior housing communities, including ones it doesn’t manage, according to management.

“We will ultimately be pushing through our best practices and our platform into areas that we aren’t managing, like the AL properties,” Burkart said during a panel at the Citi 2023 Global Property CEO Conference. “We’re working with operators right now to perfect different components of that.”

One area where Welltower management sees opportunities for improvement is in marketing. While Burkart estimated that marketing costs for senior housing operators equal about 2% to 3% of total annual revenue, he thinks there is a big opportunity to bring costs down closer to multifamily levels — as little as 0.6%.

“There’s just a litany of different opportunities that come through there as we start to perfect how these properties are managed, and really bring professionalism into the business across the board; providing better data so we have better insight into what’s happening,” Burkart said. “And at the end of the day, provide a better value proposition for the residents and employees.”

At the end of the day, it comes down to “nickels and dimes,” he said.

“You just chip away at one item after another,” he said. “[And ask] ‘Why is that there? Why does it cost that much? How do we change this? Can we get a little bit more income off of this? How do we leverage that space to drive value?’”

Powering that effort is a data analytics platform that Welltower management has touted as having played an outsized role in helping the company’s partners improve operations, such as by reducing their use of agency staffers, for example.

The data analytics platform is also aimed at learning as much as possible about the company’s customers. For example, an operator might use the data to track not only whether a prospect has toured a community; but when they came in, what they asked for and what the outcome was.

“It’s really modernizing it with what other businesses have done,” Burkart said. “This is not necessarily new, but it is new to this business.”

Welltower CEO Shankh Mitra compared the REIT’s efforts in self-management to those undertaken by similar companies in the multifamily, lodging and self-storage industries.

“We’re trying to professionalize the business,” he added. “A lot of asset classes have gone through that … and that’s what we’re trying to do here.”

As for how the effort will play out in the future, Burkart said he also looks to the industries that had tried it before.

“People at the beginning thought, you know, I don’t know this will work — and it worked,” Burkart said. “The same thing will apply here.”