Have you been to senior living seminars in the past featuring $50 million projects and walked away thinking—“That’s terrific, but we are never going to have that kind of money available. I wish they would show me something real that I can accomplish!”
We believe there is an alternative, a strategy that is the antithesis of these new Greenfield “Big Gulp” projects. There are an enormous number of existing communities that remain the heart and soul of the industry and probably the majority of those need some degree of updating or “fine-tuning” to remain a leader in the marketplace. Many people in the industry are concluding that these products will be improved, but the approach to this revitalization process is going to be accomplished one, $5-10 million expenditure at a time. The good news is that there is a lot you can do with that kind of money.
While specific physical shortcomings on campus may need attention, Kevin Meehan of Sawgrass Partners references other factors that are driving repositioning projects, such as shifting consumer expectations, new and better operating models and service delivery methods, increased competition and choice as well as changes in the regulatory and reimbursement environments. “The impact of these and other market forces, and the pace of change, will only increase over time,” says Meehan.
Sawgrass finds that some communities approach repositioning from a reactionary position in a manner Sawgrass refers to as an “Event” Cause & Effect. According to Meehan, typical repositioning triggers include:
- Occupancy declines and worsening financial performance
- Aging facilities
- New competition
Based on these triggers, communities typically respond by:
- Adding levels of care, such as independent living, assisted living and memory support
- Modernizing existing facilities with larger, more residential living areas
- Enhancing common spaces, such as dining and wellness centers
- Implementing new programming and care delivery methods, such as resident-centered, household models for assisted living and long term care components
- Replacing facilities altogether and/or adding new campuses
For development consultants such as Life Care Services (LCS) and Sawgrass, repositioning is a strategic commitment. According to Michael Eaton, regional marketing and sales director of LCS, “The days of ‘if you build it, they will come’ are over. Every community needs an updated strategic plan and vision for the future in this ever-evolving industry.”
“To be successful over the long-term, organizations need to view repositioning as a ‘STATE OF MIND’, not just an ‘EVENT’,” says Meehan.
From a philosophical perspective, Sawgrass believes repositioning should take a holistic approach that focuses on your entire organization and its future where the results reaffirm or restate your organization’s strategic direction and goals. According to Meehan, by focusing on the whole organization, true repositioning should encompass the review and evaluation of:
- Mission, vision and values
- Board of directors
- Management team
- Existing and prospective residents
- Local community leaders
- Strategic planning
- Market opportunities/risks
- Market positioning/branding
- Financial opportunities/risks
- Programs, services and delivery methods
- Facility requirements
“New construction or renovations to existing buildings alone is NOT repositioning,” says Meehan.
Sawgrass offers the following Key Planning Questions for those approaching a repositioning project:
- Is your “Project” the result of logical, disciplined planning or a knee-jerk reaction to your situation?
- Is it a strategically based plan that dovetails your organization’s mission, vision and values with its strengths and market opportunities?
- Is it responsive to current and expected future consumer demand and is it affordable to the market you serve?
- Is it financially viable on the basis of prudent assumptions?
- Are programming and service delivery driving design or is it the other way around?
- Does your plan reflect the input of the right experts?
- Does your plan provide balance and flexibility, and leave you options for the future?
As the team works together to strategically approach the repositioning effort, a master plan is developed. LCS emphasizes the importance of a master plan over a site plan. “A master plan addresses business components and architectural plans specific to a senior living community,” says Eaton. “It considers your community’s operations, organizational philosophy, services and programs and design. Through financial modeling, the plan helps a board or owner decide the appropriate sequence for making capital improvements.”
Based on this strategic approach, teams are then able to move forward with projects in the right sequence and this is where we are seeing communities have the ability to tackle $5-10 million projects, one at a time, to maintain financial stability while achieving capital improvements.
Working with Sawgrass Partners, AG has been part of a series of repositioning projects since 2003 at Three Crowns Park in Evanston, Illinois. The community was committed to making a change. For Executive Director Susan Morse, “Either you change and grow, or you become a dinosaur.” We had the pleasure of presenting with Sawgrass and Three Crowns Park at the 2014 LeadingAge Illinois Annual Meeting. Contact Us for access to this presentation so you learn more about micro-strategies for repositioning, the efforts at Three Crowns Park as well as other budget conscious projects. You can also read more about Three Crowns Park in Our Work.
Three Crowns Park
AG has been working in conjunction with LCS on the revitalization of WhiteStone in Greensboro, North Carolina. LCS shares their approach to repositioning in the following webinar – Repositioning: Creating a WOW that Powers Marketing and Drives Occupancy. While they reference WhiteStone throughout the presentation, you can also read more about the project in Our Work.
At AG, we think of these $5-10 million repositionings as Real Projects for Real People. These micro-strategies focusing on easily attainable improvements are the path that many existing communities will follow in order to remain relevant in the marketplace. Smaller projects are allowing industry leaders to continue to move forward implementing new amenities and services, updating facilities and adding new components that demonstrate a commitment to improving the lives of our ever-growing senior population.