Great Lakes Management is once again expanding its senior living footprint with major partners including senior living developer Ryan Cos., but certain market pressures are pushing the company to take a breather on future growth for the time being.
The Plymouth, Minnesota-based company has a broad range of investment holdings including multifamily and student housing, but specifically in senior living, the company’s portfolio consists of approximately 2,800 memory care units and 1,200 IL units spread across 46 communities.
The company has “been on a pretty significant growth curve,” but construction costs and interest rates have prompted the company to hit the “pause button” according to Great Lakes Management CEO Mike Pagh.
“We’re looking at opportunities that we can make work,” he told Senior Housing News.
One thing that hasn’t totally paused is the partnership between Great Lakes Management and Ryan Cos., with the pair working on a third senior living community under the Talamore Senior Living brand.
The latest project, Talamore Senior Living Woodbury, will bring a four-story, 245,000 square-foot senior living community to Woodbury, Minnesota, consisting of 90 IL units, 70 AL units, 26 memory care units and 14 skilled nursing suites.
The community, which is the second Talamore Senior Living community in Minnesota, will include multiple dining venues, a library, wellness/telehealth center, fitness areas, spa, salon, club room, activity room and gathering space for community events.
Pagh added that the latest Talamore community is the largest of the three communities in the partnership with Ryan Cos.
Thus far into 2023, Pagh said he believes that this year was the first in which it felt like Covid-19 was “in the rearview mirror,” with a “more normal rhythm” coming for operations and market conditions.
“We’re back in business and our primary units are back in demand,” Pagh said. “We had a very active winter, spring and early summer and we’re really excited about this moment.”
Pagh noted there’s been some “loosening” in the labor market as it relates to challenges, but it remains tight even as agency labor is trending down. Two-thirds of communities were “completely out of agency labor with very little overtime,” Pagh added.
That indicates to Pagh that the labor market is stabilizing and Pagh noted that Great Lakes Management had “closed the back door” with regard to turnover as the company hires new staff and is having success in training and retaining staff longer, he added.
To help move the company forward, Pagh said Great Lakes Management was looking at implementing new software platforms and incorporating artificial intelligence and machine learning that help analyze trends and provide greater operational insight.
“I think that’s an exciting area,” Pagh said. “We’re seeing these early stages of some applications that are coming to bear and senior housing is of interest to us.”
Looking ahead, even with high construction costs and steep interest rates, Pagh said Great Lakes Management is “very bullish” on the senior living industry and future investment.
“I think it’s healthy for the market to pause for a little bit here to see less construction to give us operators an opportunity to absorb units that were impacted by the pandemic,” Pagh said. “We’re very excited about the market and the opportunities that continue to exist and that’s why we believe there’s a very bright future in our industry.”