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Following a strong performance in 2023, 12 Oaks Senior Living is looking to keep that momentum going through this year as well.
That’s according to President Greg Puklicz, who told Senior Housing News the company was able to grow its portfolio to 38 communities and saw its occupancy increase by 16 points over the course of the year, with a companywide average around 80%.
Additionally, revenue per available room (RevPAR) increased around 10.4% throughout 2023, which is largely tied to rate increases.
A major factor in that growth was the transition of several Enlivant properties around mid-year, which Puklicz noted has been part of the 12 Oaks growth strategy.
Part of the success for 12 Oaks comes from its “high touch” model of management, where one regional vice president acts as a functional specialist for groups of five to six properties. The regional leadership has an “intimate” knowledge of the market, rather than overseeing more than a dozen properties.
Puklicz previously told SHN that the coming year could see a return to normal in terms of occupancy due to demand. The plan for 12 Oaks is to focus on net operating income while maintaining the culture of the company, according to COO Lori Jones. This in part will have an emphasis on improving both resident and employee satisfaction.
“We believe we’re moving into the area of the glass being half full instead of half empty,” Puklicz said, while speaking to SHN during the recent National Investment Center for Seniors Housing & Care (NIC) conference in Dallas. “We’re excited for 2024.”
Staff focus
According to Jones, bringing its new communities’ staff up to speed has been a focus for 12 Oaks, and there is a current focus on onboarding plans and training to “be successful right out of the chute.”
“We’ve been doing some focus groups with key associates in our trifecta team … the executive directors, the sales marketing director and resident care director,” she said. “We’re working on ways to grow that team and that leadership through development.”
Aaron Catoe, 12 Oaks senior vice president of operations, said there has been an emphasis on building up managers, following the trends noted in retention studies. Some of that focus comes in connecting with employees, maintaining healthy boundaries with employees and “taking ownership of the department.”
The program utilizes executive coaches to cover two components: one focused on people’s characters and the other on competencies, according to Catoe.
“It’s material in a framework around leadership, development, connecting and boundaries,” he said. “It makes all sorts of changes internally, which flows eventually to financial performance.”
So far, Catoe said the reception of the program has been “phenomenal,” with employees noting it has had an impact on their personal lives outside of work as well.
Looking ahead, new technology
12 Oaks is in the process of revamping its use of electronic medical records across the organization. However, the process is not without challenges, as Jones said there have been issues going from paper documentation to fully electronic.
However, the switch has enabled a better flow of assessment, care planning and documentation.
12 Oaks is also looking into a program called CarePredict, which Jones said could be attached to call systems and lead to better response times for residents.
So far, the company is still in the early stages of collecting data on the effectiveness of CarePredict, but plans to begin investing in it further throughout the remainder of 2024.
Looking ahead through the remainder of 2024 and into 2025, Puklicz said 12 Oaks is going to focus on internal improvements to systems, process and technology, but noted there is also going to be a curation of its portfolio by adding new communities, particularly throughout Texas and Oklahoma.
Paul Wang, vice president of asset management, said the company’s business plan has shifted from leasing and bringing RevPAR up to a greater focus on CapEx initiatives, which can include repurposing buildings, potentially shifting assisted living, independent living and memory care communities as needed.
Alongside those changes, Wang added the company’s leadership is focusing on new initiatives to increase occupancy and rates, while continuing to work on decreasing the reliance on agency and taking a close look at the level of care worker staffing.
“It requires working with our ownership groups on something like that,” Wang said. “Those are things we work on behind the scenes, but we work very closely with our ownership groups to make sure that our visions align.”
Future growth for 12 Oaks will be through transitions and merger and acquisition activity. Development is on pause due to the current macroeconomic situations regarding land costs and building materials, Puklicz said.
Along with the staffing issues facing the industry, Jones said there has been an “erosion of margins,” and in order to face that, the company is going to be focusing on its occupancy rates to maximize revenue.
“Budgeting was challenging this year, because we needed to deal with the higher staffing costs, higher taxes and higher interest rates that have contributed to increasing costs,” she said. “Our margins are climbing back up to where they were … but that’s a big focus for us.”
Lease-up is also going to be a continued focus for 12 Oaks, with Catoe noting several ownership groups have entrusted the company with distressed properties, but recent velocity has given the company’s leadership optimism about following through on occupancy gains as 2024 continues to unfold.
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