12 Oaks, Claiborne Balance Growth, Recovery as Role of Regional Senior Living Operator Shifts

The senior living industry is in a state of flux in 2024 as operators look to stick the landing on their pandemic recovery, all while growing for the future. Doing both at the same time is hard.

On the one hand, average occupancy rose to 85.6% in the first quarter of 2024, and is on track to return to pre-pandemic levels in 2024. Many operators report staffing expenses are also moderating, and the industry is continuing to adopt new technologies that could reshape operations in the future.

On the other hand, capital constraints, disconnects between buyers and sellers and the cost of new construction are making new avenues for growth hard to find. Where the industry once risked overbuilding for a new generation of older adults, those dynamics – coupled with the rate of demand – could lead to shortfalls of senior living units in the future.


But leaders of senior living operators including Claiborne Senior Living and 12 Oaks Senior Living aren’t bothered or getting complacent. Instead, they have taken the view that the industry’s glass, once half-empty, is now half-full – all while eking out growth strategies that make the most of current conditions.

They are also doing business in a world where regional operators are gaining prominence with large partners, including real estate investment trusts (REITs). At the same time, the role of the regional operator in the senior living industry is growing – and shifting.

Balancing recovery, growth

Claiborne and 12 Oaks are seeking to further grow and recover in 2024, with some progress on both fronts.


With regard to its ongoing recovery, 12 Oaks made good progress last year by adding 16.5 percentage points of occupancy and growing revenue per available room (RevPAR) by 10.4%. As of mid-April, occupancy exceeded more than 90% in a dozen of the company’s communities, and the Dallas-based operator also has whittled down use of agency staffing to just a few communities in its 38-building portfolio.

In 2024, that recovery is still moving in the right direction, but at a “decelerated rate,” according to Puklicz.

“We’re focusing internally on a lot of our processes, policies, and really kind of getting to that next level, all in anticipation of 2025,” said 12 Oaks Senior Living President Greg Puklicz during the recent Capital + Strategy conference in Washington, D.C. “Some people are saying they will thrive in ‘25, some people are just trying to stay alive til ‘25. I think that’s still the case.”

A similar story is playing out at Hattiesburg, Mississippi-based Claiborne Senior Living and its 12 communities, according to CEO Tim Dunne.

“By and large leads have trended well, and we’re starting to see some stabilization on staffing,” Dunne said on the Capital + Strategy conference panel. “I’m optimistic that … we’ll navigate our way out of this mess into greener pastures in the near future.”

With recovery trending in the right direction, both Dunne and Puklicz have turned their attention to growing scale for the future.

Claiborne, which had grown through development over the years, had to get creative to continue expanding to serve the incoming demographic of older adults. While new development is still hard to do, Dunne said the company has found success by being patient.

As of mid-April, the operator had found a small number of banks willing to go forward with new construction, and Dunne sees more opportunities to grow through new acquisitions with deeper-pocketed partners. The company also has pivoted to third-party management.

12 Oaks is only focusing on third-party management right now, Puklicz added.

“That has fueled our growth, because there’s been numerous transitions; and certain equity groups are looking for new ways of doing things,” he said.

Shifting role of the regional operator

Both Claiborne and 12 Oaks have operated communities in regional clusters throughout the South. In both cases, the companies have found doing so aids operations and helps them be a better operating partner – but the role of the regional operator has shifted over the years.

To Puklicz, regional operators are not only more effective and efficient than those with communities sprawled across the country, but in fact better stewards of industry quality.

National models might involve a corporate office handling support functions like budgeting or planning instead of executive directors or community-level leaders, but Puklicz believes this approach has led to operational dysfunction over the years.

“When you have all that kind of back-of-house administration split off from operations, I don’t think that model long term is effective,” he said.

Last year, the company took on a number of properties formerly managed by Enlivant in a major growth push. Using the company’s “high touch” model of management with regional support structures, Puklicz said 12 Oaks has seen “tremendous success” in that portfolio of communities.

“Setting up a huge accounting office in Dallas or anywhere to just crank out financial statements to communities across the country provides the data, but it doesn’t provide the connection and the effective use of that data to really manage communities,” he said.

Dunne similarly sees advantages in being a regionally focused operator, particularly in light of new changes made to regulations and quickly shifting operating environments across the country in the last decade.

“Being concentrated to a degree, not only do you get the personalization of your home office team, which is going out interacting one on one with the buildings; but you are just keeping up with what’s going on in the industry in those states,” Dunne said.

He added that staying within regional clusters “rounds out the jagged peaks in occupancy and adjustments in a building.”

Given that both companies work with large partners, both leaders see the advantages of being transparent and sharing data between ownership and operations. Larger partners can help make new investments in CapEx and technology that smaller operators couldn’t do alone. They can also share and collect data to help fine-tune operations on the ground, including insights gleaned from other operating partners they work with.

“I hope the industry continues to embrace transparency in information-sharing,” Dunne said.

While Puklicz also sees the advantages of closely collaborating with a large partner company, he is wary of “the de-regionalization of regional operators” at the hands of an ownership group.

“It reduces the role of an effective regional operator,” he said, adding that some agreements he has seen in the industry amount to “disguised operating leases” that don’t incentivize operators to exceed expectations.

“Some of these management agreements that some people are now entering into are dangerous, and put a lot of pressure on management companies,” he said. “There’s got to be more creative and inventive ways to support all the things that need to be done for the ultimate benefit of the community.”

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