After a “building year” in 2023, operator Claiborne Senior Living is gearing up for even more growth in 2024.
Claiborne Senior Living CEO Tim Dunne told Senior Housing News that in 2024 he is focused on solidifying staffing at the community level and improving its operational and financial footings. The company in 2023 notched a 6% increase in occupancy overall and a 7.5% increase to its overall margins.
“Occupancy generally trended up, margins generally trended up, we saw a lot of good indications that 2024 will allow us to continue to mend from our Covid days,” Dunne said.
Hattiesburg, Mississippi-based Claiborne has 12 communities in its portfolio today, and looking ahead, Dunne said the company’s growth strategy could include opportunities in anything from acquisitions and development to third-party management.
For Claiborne, the growth is the result of plans laid out in late 2022, when the company laid out plans to grow in the years ahead
“Being a smaller organization, development was at the core of when we started our organization,” Dunne said. “That growth kind of got pushed off. We still grew the organization so that when we could handle it in a larger chunk, which just happens to be coming in 2024.”
Recruitment and hiring
Claiborne already has around 1,000 current employees, but the plan for 2024 is to nearly double that headcount, with many of those hires occuring on the community level, Dunne said.
Some of that will occur as the company acquires smaller organizations and takes on third party-management agreements for new communities. The company also is seeking to grow its regional and corporate teams.
“One of the things that sets us apart is we run a regional team [with an] average [of] about three people for every five assets,” Dunne said. “If you look at what the industry norm is, there are nowhere near that many regional support team members for that few properties. ”
To help retain staff, Claiborne Senior Living revamped onboarding and compensation packages for employees, with an emphasis on creating career paths for them. Employees can hit certain milestones in their jobs to earn hourly pay increases between $1.50 and $2 under those programs.
“Our belief is that if we’re able to present some of these employees with this plan [and a] competitor springs up and offers 25 cents more … they’re not going to abandon what they’re comfortable with where they have a plan in front of them,” Dunne said. “I think that’s going to help us address the line staff challenges that we all endure.”
Similarly, Claiborne is seeking to motivate and encourage workers to find ways to promote creativity and autonomy, which helps inspire others.
“When you have people that want to do that and they join the organization, you have this like-minded mentality of improving. It’s very contagious, and people get excited about it … they want to come to work, and they want to do more,” he said.
Claiborne’s growth is exciting, Dunne said, not just for the company but for the people working there, as it brings more people onboard for better support, allows for more and better resources and gives existing employees more opportunities for personal and professional growth.
“When you have growth, those opportunities to advance just seem to be there more often,” he said. “If you’re not growing, you’re dying.”
Sellers becoming ‘much more realistic’
Underpinning Claiborne’s growth plans is the belief that the coming year will see conditions that make acquisitions more favorable to undertake – specifically, interest rate cuts and banks thawing frigid lending conditions to free up capital.
Billions of dollars worth of debt maturities are coming due this year, and that may force some tough decisions among owners of properties on whether to cut their losses and sell.
“I think you’re seeing some fatigued sellers and owners that are becoming much more realistic on the price of their assets, especially assets that haven’t been performing that they’ve been pumping cash into,” Dunne said. “I think you’re seeing the spread between potential buyers and potential sellers really narrow.”
Dunne said that the company’s original growth plan of developing two to three properties per year was stymied by conditions seen during the Covid pandemic, along with a lack of capital for new projects. As a result, new senior living inventory has plummeted to the lowest level since 2012.
Claiborne is using the gap in construction as an opportunity to grow, but not only through acquisitions. The company’s targeting growing to 20 communities by the end of 2024 with new additions in independent living, assisted living and memory care. Three communities that have been under development are slated to “come out of the ground” this year, Dunne said.
Among the projects currently being developed are active adult communities, an ongoing push for the senior living operator. That will continue to remain a target, according to Dunne.
“I think there’s an incredible amount of market space for active adult,” he said. “I think it’s still a niche that’s finding its identity. But I think at some point in the near future, it’s going to catch traction. I think the active adult market will be huge.”
Another point of growth is coming through third-party management, something that Dunne said hasn’t been a focus in the past. But there are many opportunities to partner with like-minded investor groups and Dunne said the company will likely make an announcement on growth to that end in the first quarter of the year.
“The employee growth, it’ll come with third party management. If those entities are already operating … there’s very little capital investment required on our side,” Dunne said, though he noted Claiborne Senior Living invests to ensure there’s an aligned interest.
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