By Ted MacBeth, VP/Director of Project Development at LCS Development
With improving market conditions, lower interest rates and better access to capital, many senior living communities are finding the time is right to move forward with their redevelopment projects. While the economic downturn in 2008 caused many communities to delay repositioning for a few years, we’re now seeing stabilized operations and dynamic market activity as contributing to a resurgence of redevelopment projects in the senior living pipeline.
Here are some common questions senior living leaders and boards are asking us:
- When should a community consider repositioning?
- How often do we need to invest in upgrades?
- What if new competition comes to town?
- How do we stay relevant?
If you’re in a similar situation, consider these steps to keep your senior living community successfully positioned and operationally sound.
Timing for Repositioning
If your community hasn’t completed any type of redevelopment in the last 5 to 7 years, you’re at risk of falling behind in your marketplace. Repositioning can be anything from large-scale renovation or expansion projects to smaller, more cosmetic upgrades. Proactive community leaders and boards of directors see the greatest success at maintaining and growing market share by planning ahead to meet and exceed consumer expectations.
Tip: Don’t wait until your community experiences an operations challenge with declining occupancy or census. Your community should have a master plan in place with comprehensive steps plotting out your community’s future.
Ask yourself: If a new competitor comes to town, are we prepared and positioned to compete? If the answer is no, focus on steps to address that in the next year.
Steps for Redevelopment
Master Plan. Repositioning starts with revisiting or, in some cases, developing a master plan. It includes a full assessment of industry trends, marketplace insights, competitive analysis, and consumer expectations. It also compares your community to others in the market including analyzing the layout of the physical community. It’s planning for the long-term future for your entire campus and finding the right plan to help keep the community relevant over the next 5 to 10+ years. Each community has a unique solution – the job of a development partner is to collaborate with local leadership, board members and residents to find the right solution for your community.
Tip: You might have a nice open space on your campus and think, “That’s a great place to construct a new building.” Look at the bigger picture; think through what the next 3 to 4 projects might be. Ensure you are making the right first step and prioritize expansion and redevelopment projects.
Ask yourself: Does the independent living apartment sizes, mix and amenities at our community align with expectations of today’s seniors?
Feasibility Study. It’s crucial to know what the redevelopment project looks like on paper before spending significant resources. Do the costs add up? How viable is the plan? You and your stakeholders need to fully understand the financial impact on the community and its cash flow potential. A feasibility study factors in the market, design concept and layout, financial plan, project economics and ongoing operational impacts.
Tip: Your redevelopment partner should have experience in developing a feasibility study and creating a comprehensive master plan for Life Plan Communities.
Ask yourself: Does your team have the right development resources?
Partnering with an experienced senior living development company can offer significant cost savings. See our redevelopment project at Friendship Village Sunset Hills, a Life Plan Community in the St. Louis area, and learn how expertise lead to greater fiscal responsibility and return on investment.
Delivery and Execution. Upon delivering strategic recommendations and the master plan to your board and other stakeholders and gaining approval, it’s on to construction planning. Unlike new construction, there are key differences with redevelopments at existing communities. At LCS Development, we understand we’re working in residents’ homes. As noted in my colleague Bruce Cannon’s blog, communication is key.
You need buy-in from residents. You want this disruption to be a decision they’re in support of by educating them on the role it plays in operations and the future of the community. It’s important to think operationally. For our team, we support local operations, providing strategic consultation and efficient design solutions throughout the redevelopment process.
Tip: If a redevelopment project will disrupt a resident space like a beauty salon or dining venue, for example, relocate the amenity first. Don’t just shut down a space without having a solution for maintaining it on an interim basis.
Ask yourself: What communication or accommodations would I expect as a resident at a community under redevelopment?
Take a look at another one of our repositioning success stories and the dramatic changes at Whitestone, a not-for-profit Life Plan Community in Greensboro, NC, and how our partnership led to an increase in resident satisfaction and total revenue.
Experience and depth of resources are pivotal when redeveloping communities. At LCS Development, we can confidently say we have a 100% success rate on our projects. Let’s work together on your redevelopment project.
About Ted MacBeth:
Ted Macbeth is VP/director of project development for LCS Development. Ted provides direction and oversight to the Life Plan Community portfolio, including managing the development planning process, projects, and repositioning efforts. He supervises the project development managers and associated project activities. Ted has worked in the senior living industry since 1996. Previously, Ted worked for a not-for-profit senior living provider in Chicago, Illinois where he served as vice president of development. He joined LCS Development in 2008. Ted holds a Bachelor of Business degree from The University of Iowa in Iowa City, Iowa, and a Master of Business Administration degree from DePaul University in Chicago, Illinois.