With occupancy at an all-time high and a portfolio mostly consisting of newly or soon-to-be-renovated communities, Solstice Senior Living is keeping the momentum high in 2023.
Like many of its peers this year, Solstice “tiptoed” into this year, with a slow start to operational progress at its 32 communities, according to COO Steve Flynt. But he said the company was “pleasantly surprised” that demand remained strong while passing through higher resident rates. That comes even as the two biggest expenses for the company remain staffing and food.
“We’re actually growing margin and we’re not eroding margin,” Flynt told Senior Housing News.
Solstice exists as a joint venture of Integral Senior Living (ISL), which became a “sister company” to Discovery Senior Living earlier this year with a recap from Lee Equity Partners and Coastwood Senior Housing Partners; and NorthStar Healthcare Income, Inc. Collette Gray still leads both ISL and Solstice as CEO, and the two companies continue to share high-level financial and human resources staff.
“We’ll still enjoy the leveraging and buying power,” Flynt said. “We will continue to compare technology and optimize what we are already doing.”
In the future, Flynt said he hopes the continued relationship between Solstice and ISL will allow for Solstice to bring on additional IL communities to the portfolio when capital markets improve and debt costs cool.
“Solstice was a brand over here and ISL over there and we weren’t bridging the gap as well,” Flynt said. “I feel like now we’re so integrated and we are sharing ideas of what’s working and what’s not.”
Solstice Senior Living is riding a wave of demand for independent living, spending over $80 million on renovations as the company’s ownership group that’s resulted in a record-high occupancy and positioned the organization for future growth.
In terms of operations, Flynt said Solstice Senior Living is seeing strong demand across its portfolio and that the company has stabilized from the turbulence caused by the Covid-19 pandemic.
“We’re focused on keeping our people and making sure our company culture is where it should be,” Flynt said. “We’re at an all-time high occupancy and we’ve gained back what we lost and then some.”
Occupancy is nearing 90% for the Carlsbad, California-based operator, and Flynt said he felt the company would get over the mark “in the very near future.”
Flynt said having third-party partnerships with health providers and therapy providers was vital to being able to offer choices to customers who are seeking more value as they make the jump to senior living.
Coming out of the pandemic, Flynt said Solstice renovated about three quarters of its portfolio, with nine renovations currently underway and seven more planned. The renovation projects ranged up to about $2 million and included updated units and infrastructure improvements to communities, something Flynt believes has helped continue to drive demand. Other projects included retrofitting all 32 communities with LED lighting to reduce utility costs.
“These were communities that were due for some capital renovations,” Flynt said. “We’ve got a great relationship with our owner group that is putting the capital in at a time when demand is high, so it’s the perfect storm in a good way for us.”
Flynt said the capital improvements across the portfolio also have helped soften the blowback during rate increases, as residents see tangible improvements.
In five communities, the company is piloting motion sensor technology and an energy management plan. At all communities, Solstice now requires its residents to keep renter’s insurance to prevent accidents that might lead to a resident getting saddled with major remediation expenses.
One of the biggest challenges that linger from the pandemic is problems finding culinary staff, even as other positions get easier to fill. But Flynt said he was optimistic that with the right outreach and recruitment, senior living communities can better attract restaurant workers due to higher wages and different hours than what’s typical in the restaurant world. A $5,000 signing bonus paid over time has worked well to attract and retain staff.
Going forward, Solstice will continue to focus on middle-market IL offerings for the industry’s incoming generation.
“We’re proud of the fact that we offer an affordable place that most can come to, and we’re trying to make sure that we stay true to who we are and be as efficient as we can,” Flynt said.
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