Demand and growth in the next 18 to 36 months could amount to “crazy” conditions for Blake Management Group – in a good way, according to COO Scott Hames.
Headquartered in Jackson, Mississippi, BMG has eight communities and potentially more on the way with partners Ventas (NYSE: VTR), CVI and LCP. The company’s footprint extends from its home state into Texas, Florida, Arkansas and the Carolinas.
Blake Management Group has since its 2007 founding subsisted on third-party management arrangements with owners of communities. That isn’t changing as the company enters its second decade in business next year.
Hames believes now is a “pivotal” time for the senior living industry, as the first baby boomers turned 80 this year. He sees the coming few years as a ripe opportunity for smaller boutique operators like BMG to act as good partners to larger ownership companies.
“We know where our strengths are, and we focus on those,” Hames said.
One of those strengths lies in BMG’s leaders’ acumen in fine-tune operations to generate a healthier margin. When the Covid-19 pandemic hit in 2020, the senior living operator took a number of steps to shore up staffing, including boosting pay for certain roles and creating more leadership opportunities for employees.
“We were punched in the gut during and after COVID with respect to labor. It absolutely decimated the communities from a morale and a frontline standpoint,” Hames said. “You were paying a nurse $2 to $4 more an hour for essentially providing the same work.”
Fast-forward to now and the company has achieved margins at or above 30% and 40% in certain communities thanks to efforts like substantially eliminating the use of overtime and agency staffing.
Now as it was six years ago, Hames believes the senior living industry’s biggest current challenges are related to the costs associated with staffing communities. BMG keeps the cost of caring for residents lower by eschewing agency staffing usage, not utilizing nurses to pass medications in certain states and building in a deeper more flexible staffing bench to help fill operational holes.
Like some other operators, BMG has moved away from using large third-party referral partners like Caring.com and A Place for Mom. Instead of playing the lead volume game, BMG focuses on the leads that its salespeople have the best chance of converting into move-ins.
In 2026, Hames and BMG’s other leaders are seeking to make senior living “sexier” in the eyes of younger prospective employees. He sees things like partnerships with colleges and high schools, internships or volunteer roles and making hiring inroads on social media platforms as serving that goal.
“Going forward, there’s going to be a large demand for quality leaders not only at the ground level, but mid-level and upper-level.”
The company’s leaders also are looking beyond total revenue and occupancy to determine the true levers of a community’s margin rate. For example, management doesn’t often discuss occupancy with sales leaders, instead focusing on lost revenue days and other factors that will impact a community’s bottom line.
Occupancy can sometimes amount to “smoke and mirrors” for senior living communities in that a high occupancy rate doesn’t always mean a healthy margin, Hames said.
“Show me their margins, and I’ll tell you whether it’s a healthy community,” he said.
BMG’s leaders “hang our hat” on how well they can manage community expenses, Hames added. The company gives executive directors the tools and autonomy to make better financial decisions along with more accountability for a community’s expenses.
“We teach them early on, day-one, of the role they play in helping us have strong margins,” Hames said.
Looking ahead, BMG is sticking by its partners and continuing to focus on the lease-up of two new-development properties it has in the works. The company hasn’t ruled out the possibility of more turnarounds or even acquiring a community or two in the future.
“Our goal has always been to be a boutique third-party management company, but not have a structure where I have a regional director overseeing 18 communities in seven different states,” Hames said. “We have no aspirations of planting a flag in California and then Oregon and Maine and New Mexico, it’s just not what we do.”
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