Growing demand is strengthening the case for Charter Senior Living’s development and acquisition growth strategy, but demographic tailwinds won’t automatically indicate future success or margin growth, according to CEO Keven Bennema.
Naperville, Illinois-based Charter is pairing its growth ambitions with finding operational efficiency through leadership development, business intelligence and data analysis to support operations. The company operates over 70 communities in 18 states after acquiring multiple communities in 2026 and announcing new development projects while maintaining relationships with institutional capital providers including Ventas (NYSE: VTR) and LTC Properties (NYSE: LTC).
During the latest episode of Transform, Bennema discusses the widening gap between growing senior housing demand and available new supply, along with how secondary market opportunities make sense amid difficult development conditions.
“Secondary markets to us have tremendous demographics and very strong household incomes,” Bennema said during the podcast. “There is limited new supply or supply that has been there for years. So many times, if not every time, we are the newest community that has been built in that market. In many of these markets, we are the newest anything, the newest real estate that has been built.”
Charter broke ground on a 162-unit community, Charter Senior Living of West Chester, earlier this year, marking the company’s 15th ground-up development since the company’s formation. Other recent development activity includes Charter communities in Sheboygan, Wisconsin, Winder, Georgia and Murray, Kentucky, all projects that were announced in 2024.
Looking ahead to 2027, Bennema sees future development activity thawing and more projects getting announced.
“I think lenders are opening up the floodgates a bit, and I’m very optimistic that by 2027, maybe the fourth quarter of 2027, we’re going to start seeing the development pipeline really shift,” Bennema added.
Listen to the full episode here.
Editor’s note: The following transcript has been edited for length and clarity.
On the 10th anniversary of Charter Senior Living:
We’re obviously very proud of what has occurred over the last 11 years. Sometimes we have to pinch ourselves a little bit to believe that we have 70-plus communities under our Charter umbrella. We are on our 15th ground-up development, and we’re looking at other opportunities for development and acquisition. We are very proud of the relationships that we have built over the years and our reputation in each of our markets. The most important relationship we can have is with our residents’ families and our associates in our local market. This is a very local business, so we’re proud of that, as well as our relationships with our state surveyors. We are also proud that we have grown relationships with institutional partners, which has been wonderful, and we’ve had opportunities to recap communities where we have come in either a majority or a minority ownership position.
We never want to lose sight of why we started in the first place. For Kim and I, and certainly Jane and other tenured senior team members, residents come first, and that is critical. Associates also need to feel valued; that is another critical point of why we exist. Because we are decentralized, we have a remote back-of-the-house. I think we were the pioneer in starting a remote back-of-the-house infrastructure. We do not have an address on Michigan Avenue or Wall Street; our senior team lives in their homes. We have almost 75 senior team employees who otherwise would be based out of a corporate office, and about 80% of those individuals are road warriors. They are very visible in our communities, primarily monthly and certainly weekly as necessary. We’re incredibly proud of that.
We want to ensure that resources are provided to the senior team and certainly our community-level associates, so they are armed with the tools to drive excellent resident care while really drilling into newer, sophisticated business intelligence tools and models. We use those to bring data to help our community leaders make decisions quicker and more thoughtfully, with a high regard for data analytics. That’s really important to us. Look, as a company, we’ve made mistakes and learned a lot over the years. We were certainly a bootstrap company when we started out with a loan, and that loan we wound up paying off in early 2018, which was a huge day for us. We’ve continued to learn and grow from that. But we also have a story of performance. Again, not perfect, but we have a story and case studies showing that we have really done some tremendous things. If you look back and subtract out the 15 new developments over the last almost 11 years — call it 55 to 60 of our other communities were, I’ll put it nicely, value-add communities — they required a tremendous amount of management turnover and capital allocation to really help reposition those communities to be leaders in each of their markets. So, again, I think our mission supports all of this.
On 2026 priorities for Charter:
2026 has been a wonderful year for Charter Senior Living. Certainly nothing is perfect, but this has been, I believe, a defining year for us. We are operating at a much larger scale than we have in the past. We have established some really strong relationships with new operational partners, such as Ventas and LTC [Properties], to name a couple. We have also been in a position where we’ve been able to recap out partnerships, coming in and bringing equity to basically stay in communities where the original investors were able to get the return expectations they were expecting. Here, we are coming in in an ownership position that has been absolutely wonderful, and it’s something that we want to continue to do.
I think in 2026 we’ve gotten much better operationally as a company, and I’d say our operational discipline may be more of what I’m referring to. We are hyper-focused on how we’re collecting, gathering, and using data. I mentioned earlier that we are getting much more sophisticated with business analytics, AI usage, and how to continue to improve resident care, continue to improve our occupancy, help manage labor, and manage our sales and marketing process, which is also essential.
We know that our customers essentially live with us for a finite amount of time, so we are always doing everything we can to ensure that they are more than just satisfied, that they’re delighted as customers, and that includes their families. We also focus on what we need to do to ensure we have appropriate pipelines to keep our communities 100% occupied, and we’ve gotten much better at that. I think we’ve also improved our internal accountability focus.
We’ve improved on our leadership processes, where we are focusing more on helping our management team be better leaders and navigate the uncertainty. Right when you think you’re going to have a great day, something’s always lurking around the corner, so we’re getting better at proactively strategizing for what’s coming around the corner. I think our mission has also carried us foundationally in 2026. We care deeply about people; we care deeply about our associates, residents, and families, and we’ve been able to elevate our standards. Not only do we feel that internally, but we’ve been able to prove that to existing partnerships and certainly new investment partnerships that we have, which, quite honestly, has been something we’ve been very proud of.
On secondary market strategy:
I think not only are these markets that people can’t find on the map, we’ve also found that people are having a hard time spelling some of them, like Sheboygan, Wisconsin. That’s just a joke, but look, it’s interesting, the secondary market strategy. It quite honestly has proven out that the underlying fundamentals of those markets just make tremendous sense. Many times, the economics and demand in those markets make more sense than, I’ll call them, the higher barrier to entry markets, because those markets are becoming tougher and tougher to find because of available land.
Secondary markets to us have tremendous demographics and very strong household incomes. There is limited new supply or supply that has been there for years. So many times, if not every time, we are the newest community that has been built in that market. In many of these markets, we are the newest anything, the newest real estate that has been built. These are really big opportunities for these secondary markets, and that’s why most of the local leadership, call it the zoning departments and the mayors, are very excited about how senior living is accepted and welcomed in these smaller markets that have not had a newer senior living community built. They know that pressures upon them are growing for really good quality senior living in these markets.
I think the other thing is that we’re able to build what I’ll call a healthcare community. We typically hire executive directors who maybe weren’t born and raised in these markets but have lived there for a long time and have very strong relationships with the medical community, churches, civic organizations, families, basically the market. We become part of the community even prior to when we build. I also want to note that being able to find land, and listen, I’m not saying land is cheap, but land is typically more affordable in a secondary market, although prices are coming up. When that land cost is more affordable, that really is one of the anchors to the economics of that project penciling out, so we can sell that to investors. The other thing I would tell you is that now, after building and opening, call it 11 that are primarily in secondary markets, we have case studies and performance that we can show to the industry, new investment partners, and our existing partners that we’ve done a pretty good job.
On new development and growth:
We’re on our 15th ground-up development. The most recent development we broke ground on is in West Chester, Pennsylvania, effective January of this year. That would be a development in what I call a higher barrier to entry market, West Chester, Pennsylvania, top-25 MSA. We are very excited about that, and now we’re able to add to our resume that we have experience across all brands of senior housing development. But certainly, we’re not just trying to get bigger to get bigger. We are looking at various acquisitions. Like I said, we have some new relationships with new investor partners on communities that are, call it, less than 10 years old or less than five years old. Then we have other opportunities with partners we have been managing for years on communities that are 25-plus years old in very strong markets, where we’ve been able to put new capital in, really make the communities beautiful, and that has also been a core strategy of ours. Ultimately, we go into new growth thinking about how we are going to create value.
Going back to our mission, what does the resident experience need to be? We need to ensure we have the right executive director in each of our communities, and ultimately, if that happens, you have a much stronger chance to have the right management team. Without the right ED and management team, growth is not possible, in my opinion. Ultimately, if the fundamentals are there, occupancy improves, operating performance improves, and that particular capital partner relationship becomes much stronger, which is one of our primary goals. Again, it’s a disciplined approach. We also have said no to some opportunities and some relationships. I think my team would tell you that they’re a lot happier that I’ve said no a little more often. When we started almost 11 years ago, it was kind of eat what you kill, but now it’s not like that at all. One of the other lessons that I’ve learned is that a bad deal doesn’t become a good deal because you operate it harder. If it’s a bad deal, it’s a bad deal, and it basically is overly stressful on all of the stakeholders. So you must do your homework on the front end. We have gotten much better at doing that, and I credit my senior team tremendously for that.
On need for more development and growth:
In support of the things you mentioned, starting January 1st of 2026, 10,000 people a day started turning 80 years old, and that is the silver tsunami. That is the baby boomers, the 1946ers to the 1964s, so the tailwinds of demand are here. Over the course of the next three to five years, as occupancies continue to climb, the reality is that if we don’t start developing now, we’re easily five, six, maybe even 700,000 units shy of where we need to be under construction right now, depending on what you read. So in the next two to three years, there is that demand. Obviously, there is still a tremendous amount of deal flow out there on the acquisition side, and I think that is going to continue. We’re benefiting from that, but we also believe we have a compelling story as to why we can convince an investor to participate in development. Maybe you’re not going to see the cash flows as quickly, but with the right patient fundamentals in a partnership, this is, in our opinion, the best time to do it. Again, looking at occupancies, the most recent statistics through the third quarter of 2026 show senior housing occupancies are anywhere from the high 80s to low 90s now, which is wonderful. So, there is a real disconnect occurring between growing demand and supply.
The other issue that is a concern on development is that it does take years to entitle, depending on the market you’re looking into. That’s also an argument for why we are bullish about secondary markets, because you don’t have to get through as much red tape as you would in higher barrier to entry markets. I think lenders are opening up the floodgates a bit, and I’m very optimistic that by 2027, maybe the fourth quarter of 2027, we’re going to start seeing the development pipeline really shift, where developments are going to become not just needed, but people are going to start believing in development again. Costs are not going down anywhere; these are just the realities of what we do, but the fact that we need to build more senior living communities is going to outweigh a lot of these other fundamental issues, just given the fact that this industry has never seen the demand that’s coming. The other thing about development that we really like is that we have the opportunity to create something truly visionary, addressing not only the need of today, but what is going to be the need of tomorrow, 10 to 15 years from now. We know the customer is changing, so we want to rethink a lot of that, and we’re doing that as we speak. It has become tremendously exciting for us to reevaluate building design, HVAC systems, how food is delivered, and the true impacts of lighting on the progression of various dementias. It’s just an exciting time overall to be very innovative and creative while really solving a demand that is not only here, but is going to continue for years to come.
On advice for senior living providers seeking growth today:
My advice is just to pat yourself on the back for getting to this point. This is not an easy industry. Senior housing is hospitality, it’s care, and it’s real estate. It’s somebody’s home, and you’re eating in the same restaurant three times a day. Your customers don’t leave, right? It’s not a hotel. It is such a hard job, and we are so appreciative of the hard work that our community-level associates go through day in and day out, and I certainly know other operators feel that. We know the demand is coming, but certainly demand does not guarantee success. Every day at Charter, we talk about how we get better, and we have ultimately improved a lot of our business intelligence systems. With AI, I actually am a believer that we’re going to figure out more positive uses for it than the scary stuff that you hear. The companies that continue to focus on that, and technology in combination with improving day-to-day care, are going to make this very exciting. Overall, the winners are going to be the organizations that, like Charter, focus on excellent care, build great cultures, and recruit and retain great people. We spend a lot of time on both of those, and that’s huge. Again, I think it boils down to making sure people feel like they’re a part of a culture that’s more of a career than a job. We need to continue to understand our customer and maintain financial discipline. Our investor partners are also getting much smarter, which goes back to the fact that you’d better be able to collect your data, understand it, use it, and share that with your investor partners. That’s very key.
We’re now finishing budgeting season for next year, and we’ve been very deliberate. We all know what’s going on in the world today, and we all know what’s going on with diesel prices. We need to be very careful about how we continue to pass along increases to our residents, while knowing that we still want to make sure we’re paying our associates a top wage. The community needs to look beautiful, but we also realize that many of our customers do struggle financially after living in our communities for several years. Even though there are more entrants, we have to be mindful of pricing in every market. So we just need to continue to do our homework and keep innovating. You could unpack all of that in probably another two or three hours, Austin. But I’ve never been more motivated and excited to be in this industry. My advice to people is to be grateful that you have an opportunity to be in an industry where you get rewarded to help people while you get paid. This industry is going to be here for years and years to come, and I’m just so proud and optimistic to be a part of it.
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