Crazy things are happening at Merrill Gardens: new leadership, sale of more than half their properties . . . what does it mean for them, the industry, their residents and their staff?
Last week Merrill announced a new leadership team consisting of Tana Gall and Jason Childers. I wrote about this yesterday (here). Then this afternoon I return from a road trip, open my email to find a new press release announcing the sale of 38 Merrill Garden communities to Emeritus. (You can read the entire press release at the end of this article.)The math looks like this:
|Merrill before the deal:||The New Merrill|
|Operating Buildings||56||Operating Buildings||18|
|Buildings in Development||8||Buildings in Development||8|
Sixty-eight percent of the operating portfolio is gone. This may not be quite as big as it sounds, because 80% of the equity in those buildings was already owned by Health Care REIT, Inc. So Merrill’s part in those buildings was a 20% equity stake plus management fees. After the transaction is complete, Health Care REIT, Inc. will own 100% of the buildings which will be leased to Emeritus. So, I get why Emeritus wants this. They are clearly in an empire building mode. It represents more revenue and presumably more profits. It also gives them a better mix of independent living to assisted living (and skilled nursing). What I didn’t quite get was what Merrill gets out of shrinking except maybe a little cash to do new development. To the phone I went. I spent about 20 minutes talking to Tana. My first question was WHY? Here is what I learned:
- This will allow the New Merrill to develop better; technology based operating systems, which will includ employee systems and medical records.
- They will continue to more or less maintain the same mix of independent living and assisted living.
- Tana’s goal is to create better products for seniors that will continue to attach the emerging generation of seniors. To create an environment that will make it attractive for more seniors to move from their single family homes, condo’s or traditional apartments into a senior community.
- She feels that with the right product there is a significant unmet need for independent living that will appeal to younger (perhaps even still working) seniors.
Finally: I am not a shill for Merrill Gardens and promise no more Merrill Gardens articles this month! So I have to ask . . . . What do you think: Is this positive for Merrill or just spin? Does this mean anything to the industry or just business as usual? Any Merrill team members want to offer their thoughts? Steve Moran
Merrill Gardens and Emeritus Release 6 27 13
It would appear that Tanya is focusing on Best Practices and Quality Outcomes. It will be a great move for her company…and resident focused services.
Blessings, Dr. B
Maybe Tana and Jason are working on centralizing their focus on new services and products and felt they needed the capital to do so. The deal with HealthCare REIT for their 20% equity stake would seem to give them greater flexibility..
It will be interesting to watch, that’s for sure.
I sure hope it’s not spin. If it is, I definitely bought into it. As one of the newest Merrill Gardens team members, I am very excited about the news and the future of the company. Quite honestly, this is what ultimately enticed me to make the move to Merrill Gardens. Essentially, we get the opportunity to hit the reset button on what is already an outstanding development and operating company.
This transaction provides the resources necessary to invest in technology solutions that will help streamline processes, improve communication, and create efficiencies that will allow us to be nimble and flexible moving forward. Additionally, it will fuel the growth of our development activities. We have some very exciting communities under development right now with more to come very soon.
What does it mean to the industry? Well, it’s our recommitment to an industry that we love. Great operators are always good for the industry and Merrill Gardens will continue to operate high-quality communities with a focus on new, innovative programs and services. In doing so, we hope to breakdown the stereotypes that still keep so many people from considering our industry. Providing new product types and a variety of engaging programs will help attract new residents to the industry and our communities.
Overall, I am thrilled for the opportunity we have to create change. This is a very exciting time for Merrill Gardens and will continue to be for a very long time.
I have a bit of P.T. Barnum in me, which I suppose every blog publisher needs to have, which is why I asked that question. But in fairness from the time I read the press release yesterday I assumed that you and Tana knew this was in the works before you made the move and that you must see it as a very positive thing or you would not have made the move. Having strong belief that Senior Housing is only just scratching the surface when it comes to using technology, I am excited about watching what you do.
From LinkedIn Groups:
Steve, wow that is happenstance lol I was just introducing myself to group and then read your post swear no conspiracy here. I was just going to ask the reverse have you and our other colleagues noticed other large SNF companies buying Home Health Care agencies and I understand the reason but ids this new model? Don Nichols
By Donald Don Nichols
From LinkedIn groups
If it’s true it’s a step in the right direction. The smaller senior living organizations are in a better position to change the course of senior living, especially compared to the national providers. It’s like trying to parallel park a Prius versus an 18 wheeler.
By Andréa Catizone
From LinkedIn Groups
Where are the other 8 communities beside the ones in California and Washington? We have two here in the Metro Atlanta area.
By Lane Tharp, SRES, CSA, CAPS
It does make sense, and I think Jason has eloquently stated the case. Technology solutions that will help streamline processes, improve communication, and create efficiencies and implementation of innovative, engaging programs and services to breakdown the stereotypes will be needed to convince the 69-79-year-old residents to move into senior living. Many will still be working, playing golf, traveling, etc., and all stay in their homes longer because they can. Companies with less communities in their portfolios (and enough capital) will be able to make some of the adjustments quicker. This is not the first time Merrill Gardens has taken this approach. A few years ago, several of its Southeastern and Texas communities were leased to another company. In the next five to ten years we will see many changes in our industry if we want to capture those 10,000 baby-boomers turning 65 everyday.
I would not bet against this team. Tana Gall and Jason Childers are two of the best in our industry and they know what they are doing.
After eighteen years in the business, I have witnessed many facilities being bought and sold. I have rarely witnessed quality improving with new owners. Instead of rewarding dedicated employees, improving food quality and sinking money into the property, new owners try to squeeze more profits, make across the board budget cuts and moral goes down. Charles Demming I am sure is turning over in his grave about this. TQM has become an anachronism.
As far as Merrill gardens goes, there was one facility here in Tamarac, FL but was sold years ago to Brookdale. Emeritus has a tremendous turnover of EDs here and are mismanaged facilities. They bought out the Chancellor Park facilities down here. I feel sorry for the Merrill Gardens residents and staff who are in for a rough ride.
The top quality providers here in South Florida are Five Star, Lifecare, Vi, Forest Trace.
My parents moved into an older but decent MG facility in Feb 2013. They, for the most part, have enjoyed it. Then Emeritus took over. I hear nothing but complaints since then. A few are: favorite staff members were let go, the food is not the same; the main meal is cooked in the morning and kept under warming lights all day, portions are smaller and not complete, they must ask for vegetables if they want them. Now my parents feel the need to move to a newer private facility nearby; paying a lot more money to do so.
Is there a blog out there that I might find similar stories and any recourse we might have to get our “move in fee” refunded. This is not what they signed up for.
Thanks for any help you might offer.
I would not be too hasty with your parents moving. Staff changes at all facilities, and the same Sysco trucks(food providers) go from facility to facility. They may move somewhere else and find the same story repeat itself. I have seen some people move away only to move back again. Not an easy decision, but sometimes it is good to move so you do not feel stuck. Good luck.
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Hi I was doing some research on a Merrill Gardens ALF in Gilroy, Ca and came across this blog. Does anyone know how I can fins out which 8 facilities have been sold? In the past few months I have seen most of the office staff changed and now I may have to move my dad due to policy changes. We admitted my dad in feb 2013 only months before this sale. You would think they would give the residents a heads up that things would be changing. I was very happy with this facility and the care he was receiving but in the last few months, it has all gone to crap. Also, how can I obtain a copy of Merrill Garden/Emeritus policies and guidelines. Thanks
I don’t know how helpful this will be, but I am pretty sure that if it is still listed as and the signs say Merrill Gardens it is a Merrill building.
If it is an Emeritus building, in a few months it will become a Brookdale Building.
Can you tell me the name of the building?