By Steve Moran
A few days ago I was talking to Joe Jasmon the CEO/Managing Partner of American Healthcare Management Group about his new middle-market assisted living model that is just weeks from breaking ground. They are planning to break ground on as many as 10 of these communities over the next twelve months.
Take that pandemic, I actually want to insert a Batman GIF that says “Take That!”
They have branded the concept Elevate. Their goal is to deliver returns to owners/investors that are as good as what has been available in the more expensive traditional senior living model. With the goal of rental rates that are $1,000 a month lower than the prevailing market.
Here is how they are doing it:
- The model envisions 96 assisted living beds.
- They have two standard templates that are around 50,000 to 53,000 square feet, compared to today’s typical footprint of 85,000 square feet. This means a construction cost savings of around five million dollars per community.
- They are making greater use of common areas, rather than having a dining room sit empty for hours each day.
- They will have neighborhoods of 16 rooms making protecting residents much easier while at the same time vastly improving the opportunity for social interaction.
- The units will be much smaller than the typical unit of today, believing that residents’ lives should be lived with others.
- They have also radically changed the staffing model which means leaders will be actively involved in providing care to residents. And their offices will be embedded in the pods. This may mean many of the current pool of property level leaders will not want the job. But ultimately it will likely be a much more satisfying way of working.
- While there are a few things they will standardize, like their accounting system and CRM, mostly the local management will be allowed to run their communities like a small community-based business.
- The key to the concept is understanding this is seriously high-quality living. The idea is that it is affordable, but it is not low-income senior living.
Other Things That Make This all Hmm
There are so many things that flow from this concept. It is clear that marketing costs will be much much lower. It is likely that with more of a universal worker concept, it will create a culture of “we are all in this together”. That will make attracting quality staff better. Finally, it is a near certainty they will operate at a higher occupancy level.
This is, of course, powerfully important because it could create vast amounts of capital appreciation.