Senior Living News Wire

Brookdale Senior Living (NYSE: BKD) has agreed to acquire seven senior living communities from Ontario, Canada-based Chartwell Retirement Residences for a total purchase price of $80.9 million, the company announced today. 

The communities comprise a total of 613 units including 80 independent living, 493 assisted living and 40 Alzheimer’s units. Brookdale has been managing six of the communities since the company acquired Horizon Bay in September 2011. The communities are located in Alabama, Arizona, Georgia, Louisiana and Oklahoma, with two communities in Arizona and Georgia.

“The communities are well located, purpose-built, enjoy good reputations in the market and fit well with Brookdale’s existing operations. Brookdale currently manages all but the Alabama community,” said company CEO Andy Smith. 

Brookdale expects to finance the transaction with $61 million of first mortgage financing (substantially through the assumption of existing debt), with the remaining balance to be paid from cash on hand.

“This acquisition is a natural step forward following the Horizon Bay acquisition to demonstrate Brookdale’s ability to execute its strategy of acquiring certain of the managed assets if and when they are sold,” Smith said.

Upon the announcement, Chartwell President and CEO Brent Binions noted the company’s focus in core U.S. states. 

“The sale of this Portfolio is in line with our strategy to focus our investments in the United States in our core states of Florida, Texas and Colorado,” he said.

The transaction completion is subject to certain closing conditions and is expected to close during the third quarter of 2013. 

Written by Elizabeth Ecker

Several of the largest senior living providers in the U.S. have announced they are partnering exclusively with Caring.com for buying of Internet leads. Brookdale Senior Living (NYSE: BKD), Emeritus Senior Living (NYSE: ESC), Benchmark Senior Living, and Senior Star have chosen the online senior living resources as their agency of record for national buying of Internet leads. Separately, the Assisted Living Federation of America (ALFA) has named Caring.com as its preferred partner for Internet marketing.

In addition to its ongoing search offerings, Caring.com last year added a new toll-free referral help line that allows prospective customers to connect with Caring.com’s senior living advisors. That line is currently referring 4,000 prospective residents per week, the company says. 

The group of providers now partnering with Caring.com says the referral model is working to drive business and has proven to improve conversions. 

“Caring.com has been great to work with as they’ve added the referral model to their business,” said Jayne Sallerson, executive vice president of sales and marketing at Emeritus Senior Living. “Emeritus wanted to consolidate our Internet lead buying with a company we could trust, and Caring.com has demonstrated their commitment to consumers, to us, and to the industry. Their new program is showing positive signs of increased tours and conversions.”

Brookdale, also partnering with the company, says the agreement has lowered its costs and improved the customer experience for Brookdale prospective residents. 

“Caring.com has proven themselves to be a strong partner for Brookdale,” said Jim Pusateri, senior vice president of sales at Brookdale Senior Living. “Working with fewer Internet lead sources has improved our operational efficiencies, lowered our marketing costs, and improved consumers’ experience with Brookdale Senior Living.”

The company provides caregiving content, online support groups, and a comprehensive Senior Care Directory with 35,000 consumer ratings and reviews.

Written by Elizabeth Ecker

Health Care REIT, Inc. (NYSE: HCN) today announced a net income of $71.8 million in the first quarter ended March 31, 2013, up 25% from $57.5 million reported one year previously. 

On a per-share basis, HCN earnings for the first quarter rose to $0.21 per diluted share, compared to $0.19 from the same period a year ago. 

HCN attributed much of its performance to expanding the company’s senior housing portfolio.

During the first quarter of 2013, HCN increased same-store cash NOI by 3.5%, including 5.6% growth in the senior housing operating portfolio. Additionally, the company increased its private pay mix to 82% during the quarter, up from 73% reported in the same quarter in 2012.

The company also saw revenues from resident fees and services more than double to $327.3 million in the quarter from one year ago. 

HCN also completed new investments of $2.6 billion during the quarter, including $2.4 billion related to the Sunrise Senior Living acquisition as well as two properties with Brookdale Senior Living for $53 million. 

HCN’s investment in Sunrise properties is currently $3.5 billion, and the company expects that investment to increase to $4.3 billion by July 2013 upon acquiring additional joint venture partner interests.

The $4.3 billion investment is expected to include 120 wholly owned properties and five joint venture properties, where HCN expects the acquisition to generate a 6.5% unlevered initial yield, or 6.1% after capital expenditures.

While HCN has affirmed its 2013 guidance to generate normalized FFO in a range of $3.70 to $3.80 per diluted share, the company has revised its outlook for net income attributable to common stockholders in a range of $0.70 to $0.80 per diluted share. 

“Our business model continues to generate strong same-store NOI growth and asset value appreciation,” commented George L. Chapman, chairman and CEO of Health Care REIT. “We remain confident our investment and capital allocation strategy will continue to generate attractive cash flow growth and total shareholder returns.”

Written by Jason Oliva

Thanks to the Great Recession’s impact on seniors’ net worth, some expect rental continuing care retirement communities (CCRCs) to gain market share in the next few years while others contend the diversity of the baby boomer generation will support the near-term viability of the entry fee model as well. 

“Both will continue to have their places in each individual market,” says Chris Bird, senior vice president of sales at Brookdale Senior Living (NYSE:BKD). While about 80% of the nation’s 1,900 CCRCs are operated by not-for-profit organizations, the remainder are on the for-profit side. Brookdale has around 20 communities that have a Life Care entrance fee model and upwards of 80 campuses that offer a full continuum of care on a rental basis.   

How future demand for entrance fee or rental CCRCs among consumers will be split is “always the big question” investors ask, he says. Currently around 60% of CCRCs charge entrance fees, according to the National Real Estate Investor, while the remaining 40% are rental. 

“As the housing market continues to rebound, entrance fee communities will continue to build occupancy,” Bird predicts. “We’ve noticed younger clientele in their mid-to-late-70s coming onto a couple campuses after recognizing they’d never bought long-term care insurance, and that moving into a [Life Care] entry-fee campus was a much better financial opportunity, based on price, rather than buying a policy at this point.” 

While Life Care contracts can function as an alternative to long-term care insurance, high entrance fees can make it difficult for people to adequately plan their future, says Aaron Conley, president of healthcare real estate development at Greer, S.C.-based Third Act Solutions.

Financial security is a factor, as early boomer households saw their wealth decline 2.8% between 2006 and 2010, according to the National Bureau of Economic Research. 

“The entrance fee model is increasingly harder to make work. Probably a large percentage of the population are going to want to have more control over their assets, and they’re not going to want to just hand over a large sum of cash they may never seen again in their lifetime,” Conley says. “The rental model is a more affordable model to swallow, and going forward I think you’re going to see a proliferation of those types of deals, and very few of the entrance fee model.” 

“In the 30-some years I’ve been in the business, the entrance fee model has been proclaimed ‘dead’ several times,” Ferguson says. “I liken it to that quote from Mark Twain, ‘The rumors of my demise have been greatly exaggerated.’” 

Despite a somewhat rocky road for a few entry fee CCRCs that opened around the time of the Great Recession, the model is here to stay, according to him. “To me, it’s kind of a Chevy versus Ford conversation. There’s always going to be a certain group drawn to a certain product.” 

Still, post-recession, many CCRCs have had to adjust their business models to keep up with market trends and ensure their own financial security. In 2010-2011, ABHOW introduced a variety of pricing alternatives and incentives in a sixth-month period that produced about 165 sales, while Erickson Living recently announced a change to its refundable entrance fee structure.

Erickson is switching to a 90% refund option for new residents, although existing residents with 100% refundable contracts will not be impacted. Despite a smaller refund, entrance fees are not expected to decrease. 

“We think the 90% plan, with the extra finances going to the community, will really help build the strength of the communities,” says Adam Kane, senior vice president of of corporate affairs at Erickson. 

Portfolio-wide, Erickson communities are averaging an approximately 95% occupancy rate—above the national average occupancy of 89.1%, according to data from the National Investment Center (NIC) for the Seniors Housing & Care Industry—and it’s a sign that the entry fee model is alive and well, according to Kane.

“Given the circumstances we live in, with volatility in the real estate market, CCRCs have performed relatively better than condos—particularly for people looking for stability,” Kane says. 

Similar to ABHOW, Erickson CCRCs have a fee-for-service entrance fee model. Still, CCRCs where residents essentially ‘buy in’ with an entrance fee typically experience longer lengths of stay and lower resident turnover rates, according to the American Seniors Housing Association’s State of Seniors Housing report.

Independent living residents in an entrance fee model CCRC stay a median 91.9 months—nearly double the median 52.3 month stay for rental CCRC independent living residents. Turnover rates are also better among entry fee CCRC assisted living beds, at 43.6%, compared to 56% for rental CCRC assisted living beds, according to the 2012 report. 

“Clearly, [entrance fee CCRCs] are getting a different customer who’s staying longer,” Kane says. “From a business perspective, I don’t have to fill as many units as frequently as a comparable business model does for rental.” 

However, rental CCRCs are an easier sell these days, according to Susannah Myerson, vice president of research and applied strategies at market research firm ProMatura Group, LLC. She’s also the former director of strategic initiatives at Watermark Retirement Communities, which manages a portfolio of more than 30 mostly rental CCRCs. 

“Rental may become more prevalent. You’re not asking people to give up a lump sum,” she says. “Entrance fees aren’t going away—I just don’t think there’s going to be a huge explosion [of new development or interest].”

A la carte models have an added benefit for the “have it my way” generation: choice. 

“Being able to pick and choose is attractive to people, probably especially to boomers,” says Myerson. “I know people entering independent living now, even in their early 80s, who are saying, ‘We don’t want all the services included. We don’t want 30 meals a a week, we don’t want to eat every single day in the dining room.’ They’re wanting to pick and choose what services they want to use, and that will extend to healthcare as well. In the entrance fee model, you’re locked in.” 

Having multiple options available to consumers is what’s important, providers agree. 

“We’ve never felt that seniors are a homogenous group,” says Mike Lanahan, founder and president of Greystone, which develops and manages entry fee model CCRCs in the not-for-profit sector. 

A strength of the CCRC business, Lanahan says, is that residents can find the option that best fits them and their needs.

“The CCRC is not trying to be the end-all, be-all for any senior out there; it responds to a certain senior demographic, the way rental communities respond to a certain demographic,” Lanahan says. “There’s going to be room for rental models and entry fee models. The important thing is to offer choices to the senior population.” 

Thanks to the Great Recession’s impact on seniors’ net worth, some expect rental continuing care retirement communities (CCRCs) to gain market share in the next few years while others contend the diversity of the baby boomer generation will support the near-term viability of the entry fee model as well. 

“Both will continue to have their places in each individual market,” says Chris Bird, senior vice president of sales at Brookdale Senior Living (NYSE:BKD). While about 80% of the nation’s 1,900 CCRCs are operated by not-for-profit organizations, the remainder are on the for-profit side. Brookdale has around 20 communities that have a Life Care entrance fee model and upwards of 80 campuses that offer a full continuum of care on a rental basis.   

How future demand for entrance fee or rental CCRCs among consumers will be split is “always the big question” investors ask, he says. Currently around 60% of CCRCs charge entrance fees, according to the National Real Estate Investor, while the remaining 40% are rental. 

“As the housing market continues to rebound, entrance fee communities will continue to build occupancy,” Bird predicts. “We’ve noticed younger clientele in their mid-to-late-70s coming onto a couple campuses after recognizing they’d never bought long-term care insurance, and that moving into a [Life Care] entry-fee campus was a much better financial opportunity, based on price, rather than buying a policy at this point.” 

While Life Care contracts can function as an alternative to long-term care insurance, high entrance fees can make it difficult for people to adequately plan their future, says Aaron Conley, president of healthcare real estate development at Greer, S.C.-based Third Act Solutions.

Financial security is a factor, as early boomer households saw their wealth decline 2.8% between 2006 and 2010, according to the National Bureau of Economic Research. 

“The entrance fee model is increasingly harder to make work. Probably a large percentage of the population are going to want to have more control over their assets, and they’re not going to want to just hand over a large sum of cash they may never seen again in their lifetime,” Conley says. “The rental model is a more affordable model to swallow, and going forward I think you’re going to see a proliferation of those types of deals, and very few of the entrance fee model.” 

“In the 30-some years I’ve been in the business, the entrance fee model has been proclaimed ‘dead’ several times,” Ferguson says. “I liken it to that quote from Mark Twain, ‘The rumors of my demise have been greatly exaggerated.’” 

Despite a somewhat rocky road for a few entry fee CCRCs that opened around the time of the Great Recession, the model is here to stay, according to him. “To me, it’s kind of a Chevy versus Ford conversation. There’s always going to be a certain group drawn to a certain product.” 

Still, post-recession, many CCRCs have had to adjust their business models to keep up with market trends and ensure their own financial security. In 2010-2011, ABHOW introduced a variety of pricing alternatives and incentives in a sixth-month period that produced about 165 sales, while Erickson Living recently announced a change to its refundable entrance fee structure.

Erickson is switching to a 90% refund option for new residents, although existing residents with 100% refundable contracts will not be impacted. Despite a smaller refund, entrance fees are not expected to decrease. 

“We think the 90% plan, with the extra finances going to the community, will really help build the strength of the communities,” says Adam Kane, senior vice president of of corporate affairs at Erickson. 

Portfolio-wide, Erickson communities are averaging an approximately 95% occupancy rate—above the national average occupancy of 89.1%, according to data from the National Investment Center (NIC) for the Seniors Housing & Care Industry—and it’s a sign that the entry fee model is alive and well, according to Kane.

“Given the circumstances we live in, with volatility in the real estate market, CCRCs have performed relatively better than condos—particularly for people looking for stability,” Kane says. 

Similar to ABHOW, Erickson CCRCs have a fee-for-service entrance fee model. Still, CCRCs where residents essentially ‘buy in’ with an entrance fee typically experience longer lengths of stay and lower resident turnover rates, according to the American Seniors Housing Association’s State of Seniors Housing report.

Independent living residents in an entrance fee model CCRC stay a median 91.9 months—nearly double the median 52.3 month stay for rental CCRC independent living residents. Turnover rates are also better among entry fee CCRC assisted living beds, at 43.6%, compared to 56% for rental CCRC assisted living beds, according to the 2012 report. 

“Clearly, [entrance fee CCRCs] are getting a different customer who’s staying longer,” Kane says. “From a business perspective, I don’t have to fill as many units as frequently as a comparable business model does for rental.” 

However, rental CCRCs are an easier sell these days, according to Susannah Myerson, vice president of research and applied strategies at market research firm ProMatura Group, LLC. She’s also the former director of strategic initiatives at Watermark Retirement Communities, which manages a portfolio of more than 30 mostly rental CCRCs. 

“Rental may become more prevalent. You’re not asking people to give up a lump sum,” she says. “Entrance fees aren’t going away—I just don’t think there’s going to be a huge explosion [of new development or interest].”

A la carte models have an added benefit for the “have it my way” generation: choice. 

“Being able to pick and choose is attractive to people, probably especially to boomers,” says Myerson. “I know people entering independent living now, even in their early 80s, who are saying, ‘We don’t want all the services included. We don’t want 30 meals a a week, we don’t want to eat every single day in the dining room.’ They’re wanting to pick and choose what services they want to use, and that will extend to healthcare as well. In the entrance fee model, you’re locked in.” 

Having multiple options available to consumers is what’s important, providers agree. 

“We’ve never felt that seniors are a homogenous group,” says Mike Lanahan, founder and president of Greystone, which develops and manages entry fee model CCRCs in the not-for-profit sector. 

A strength of the CCRC business, Lanahan says, is that residents can find the option that best fits them and their needs.

“The CCRC is not trying to be the end-all, be-all for any senior out there; it responds to a certain senior demographic, the way rental communities respond to a certain demographic,” Lanahan says. “There’s going to be room for rental models and entry fee models. The important thing is to offer choices to the senior population.” 

Brookdale Senior Living (NYSE:BKD) announced the launch of a new branding initiative it believes will be a real “game changer” for the company.

The campaign will go through stations such as CNN, Home and Garden TV, the Food Network, and the Hallmark Channel. The company is also utilizing print ads in the coming weeks in publications such as Better Homes & Gardens, Real Simple, More, and the Ladies Home Journal.

“We think it’s going to be a real game changer,” said T. Andrew Smith, chief executive officer of Brookdale during the company’s earnings call. “We expect the branding initiative to increase awareness and preference for our services and to generate more leads and to improve our lead conversion and move in ratios.”

While Brookdale didn’t divulge how much it will be spending on the campaign, the funds will be derived by shifting resources from existing sales and marketing budgets. The company says it should see an impact relatively quickly.

“We absolutely believe it will help us improve our occupancy and will assist us in building our occupancy through the balance of the year,” said H. Todd Kaestner, Executive Vice President, Development for Brookdale.

The company posted better than expected first quarter earnings last week, with revenue of $712.3 million, an increase of 4.3% from the first quarter of 2012. As a result, the stock jumped roughly 9% as of Friday’s close

Written by John Yedinak

Brookdale Senior Living (NYSE:BKD) announced the launch of a new branding initiative it believes will be a real “game changer” for the company.

The campaign will go through stations such as CNN, Home and Garden TV, the Food Network, and the Hallmark Channel. The company is also utilizing print ads in the coming weeks in publications such as Better Homes & Gardens, Real Simple, More, and the Ladies Home Journal.

“We think it’s going to be a real game changer,” said T. Andrew Smith, chief executive officer of Brookdale during the company’s earnings call. “We expect the branding initiative to increase awareness and preference for our services and to generate more leads and to improve our lead conversion and move in ratios.”

While Brookdale didn’t divulge how much it will be spending on the campaign, the funds will be derived by shifting resources from existing sales and marketing budgets. The company says it should see an impact relatively quickly.

“We absolutely believe it will help us improve our occupancy and will assist us in building our occupancy through the balance of the year,” said H. Todd Kaestner, Executive Vice President, Development for Brookdale.

The company posted better than expected first quarter earnings last week, with revenue of $712.3 million, an increase of 4.3% from the first quarter of 2012. As a result, the stock jumped roughly 9% as of Friday’s close

Written by John Yedinak

Brookdale Senior Living Inc. (NYSE:BKD) saw first quarter revenue of $712.3 million, an increase of 4.3% from the first quarter of 2012.

Net income was $3.6 million for the first quarter of 2013 compared to a net loss of $10.5 million in the first quarter of 2012.

“We are encouraged by the trends we continue to see driving organic growth,” said Andy Smith, chief executive officer of Brookdale. “Pricing growth remained steady as revenue per unit for our senior housing business increased 2.8% versus the prior year period. We also made significant progress in controlling our cost growth, demonstrating our business model’s inherent leverage when occupancy and rate grow.”

Cash From Facility Operations (CFFO) was $69.9 million, or $0.57 per share, a 19.6% increase compared to CFFO of $58.5 million, or $0.48 per share, for the first quarter of 2012, excluding $2.1 million and $3.9 million of integration, transaction-related and electronic medical records (“EMR”) roll-out costs for the three months ended March 31, 2013 and 2012, respectively.

Adjusted EBITDA was $112.4 million, up 11.8% as compared to $100.5 million in the first quarter of 2012, excluding integration, transaction-related and EMR roll-out costs in both periods.

Average occupancy was 88.5%, up 70 basis points from a year ago, but down 20 basis points from the fourth quarter of 2012. As a result of the improved occupancy numbers, revenue from its consolidated senior housing portfolio was $564.2 million, up 4% from the first quarter of 2012.

“The company’s good first quarter results come from solid execution, a less volatile economy and, importantly, the investments we are making in our own assets,” said Mark Ohlendorf, co-president and CFO of Brookdale. “Upgrading, expanding and repositioning select communities in our portfolio remains our highest capital deployment priority and produces enhanced returns and CFFO. “

Written by John Yedinak

A common theme is shared by many of the senior living providers recognized by the Assisted Living Federation of America 2013 Best of the Best Awards: a focus on purposeful or meaningful service offerings for residents and their families.

Each year, ALFA awards its “best of the best” distinction to companies for 11 different categories of programs that change year to year. Categories this year include innovative programs for dining, environmental friendliness, and technology implementation, and the winning providers are profiled in the May/June issue of ALFA’s Senior Living Executive magazine. 

“Companies operating in the senior living space have a long tradition of sharing best practices to advance business excellence and champion quality of life for residents living in communities for seniors,” said Richard P. Grimes, president and CEO of ALFA. “This year, a trend across many nominations is a focus on offering greater meaning and purpose to programs impacting the lives of residents, their families, staff, professional resources and even society in general.”

ALFA received more than 70 submissions for various providers’ programs relating to the categories, with “Meaningful Resident Programs Creating Purposeful Days” receiving 30 entries, making it the most competitive category. 

It would be hard to forget the hundreds of negative headlines that erupted across the nation about Brookdale and Emeritus this spring, yet their respective stock prices never took a correlating hit.

Not all are so lucky to have the resources or scale to deal with a public relations nightmare, however. Much depends on the incident itself and the size of the senior living provider involved—as well as how they handle it.

“If there’s not a systemic issue at a company [related to] the quality of care that residents receive, I don’t think it’s a big concern to investors,” says Daniel Bernstein, an analyst with Stifel Nicolaus.

Brookdale, the largest senior living provider, made national media headlines after an incident that took place at Glenwood Gardens, a Bakersfield, Calif. continuum of care community the company operates.

On February 26, a Glenwood Gardens independent living resident collapsed in one of the community’s dining areas. A Brookdale staffer initiated a 911 call, per company protocol, then handed the phone to a nurse.

Throughout the approximately seven minute phone call, the 911 dispatcher repeatedly asked the nurse to either perform CPR on the woman, or find someone else who would, but the nurse refused, saying it was against company policy. The resident ultimately passed away.

When the Bakersfield police department made a recording of the 911 call public on March 2, a media firestorm ensued.

The incident made headlines across the nation, covered by major news outlets such as ABC, CBS, even morning talk shows Good Morning America and The Today Show. Many were disturbed by what they perceived as a retirement community’s failure to help an elderly resident, with most not understanding the different between the levels of care offered at the community. 

A policy expert from industry trade group the Assisted Living Federation of America began making the rounds with national news outlets to provide education about senior care and foster discussion about other companies’ moves to examine some of their own policies.

More than a week after the incident took place and about five days after it began receiving media attention, Brookdale released a statement saying it would conduct a full internal investigation along with a company-wide review of policies involving emergency medical care across all communities.

“We will implement our findings in order to maintain our commitment to providing residents with the highest level of care and services,” the statement concluded.

Despite media-fueled public outcry, the incident seems to have had little immediate impact on Brookdale’s financial health, if its stock price is any indication.

“For Brookdale, [most investors] just viewed it as an isolated incident—not that an isolated incident can’t cause monetary damage, if someone decides to take legal action and sue the company,” says Bernstein. “But there aren’t [multiple] incidents happening at Brookdale communities.”

Despite massive amounts of bad press and a Yelp page for Glenwood Gardens filled with one-star ratings based on the nurse’s refusal to give CPR, Brookdale’s publicly-traded stock didn’t seem adversely impacted, although the incident’s impact on occupancy levels is unknown.

During the week following the incident and resulting media scrutiny, Brookdale’s stock rose from the $27 range to over $29 by the time the market closed on Friday, March 9.

“A lot of times [the financial impact] depends on the individual company and how they react, and the extent of the seriousness of the incident,” Bernstein says.

A lot can depend on the involved parties, as well.

The family of the Brookdale resident who died understood the level of care and service offered in the community’s independent living setting, and said they wouldn’t be pressing charges.

Had the deceased resident’s family not been supportive of the community, Brookdale could have been facing a situation similar to Emeritus’ legal battle with the family of a memory care resident they alleged developed multiple pressure sores at an Emeritus community in 2008 before moving to a nursing home and ultimately passing away.

The family alleged the death was connected to the pressure sores and quality of care the elderly woman had received at the Emeritus community, and a jury sided with them, finding the company guilty of elder abuse and wrongful death and slamming them with a $23 million verdict.

Similar to Brookdale, however, Emeritus stock did not register a substantial change in value while the situation played out in the media.

Throughout February, when the case was being heard in court, Emeritus’ stock price had a steady upward trajectory before dipping slightly on March 6, the day after the company was found guilty of elder abuse and wrongful death. In the next five days, during which the $23 million verdict was announced, stock prices climbed more than a dollar.

The reaction of each resident’s family marks a key difference between the two cases: family support for care providers, which is not guaranteed.

In the wake of the Brookdale incident, many senior living providers have clarified certain company policies with employees, residents, and residents’ families to avoid similar issues. As for Brookdale’s own policies, a spokeswoman told SHN she could provide “no additional information beyond the issued statement, since the internal review is still underway.”

Shaping the Narrative

The Brookdale incident and the way the company handled it arguably did not have a substantial impact on its bottom line, but others have seen much different outcomes for their own crises.

The manner in which companies respond to crisis situations can play a large role in how they’re covered by the media, and how the public—and by extension, investors—perceive them, says Todd Harff, president of marketing and public relations firm Creating Results.

One community had a mold issue that displaced several residents, and was advised by its attorneys to not give the press any comment.

“They came across as being entirely unconcerned, and became guilty in the court of public opinion, whereas they could have come across with much more empathy for the people who had been displaced from the mold,” says Harff, who didn’t disclose the name of the community.

As a result, the community went for about a year without any sales, and it took about two years before it starting getting referrals again.

How situations are handled at the offset can determine the trajectory and tone of media coverage, says Jim Janicki, vice president of marketing and communications at Hillcrest Health Services and an accredited public relations professional.

“The most important thing is to acknowledge your commitment to your residents,” he says.

Janicki previously worked for an ElderWood Senior Care community in Western New York where a resident diagnosed with Alzheimer’s walked out the door. ElderWood looked for the resident for four days, with more than 100 volunteers participating in the search, and was able to shape how the media covered the story.

“We didn’t want to fight the battle as to how he got away from the facility,” Janicki says. “The message was, ‘Let’s find him.’”

Unfortunately, by the time the resident was found, he had passed away, prompting another round of media exposure.

However, in this particular case, the family of the resident was supportive of ElderWood and its efforts to find him, he says. With no perceived scandal to pursue, media coverage soon turned to the next newsworthy occurrence, and the community never experienced a drop in census.

“It comes down to how you handle the crisis,” says Janicki. “We could have botched it up, and before you know it, people could have moved their loved ones out. It’s not necessarily the crisis that leads to a drop in census—it’s how you manage the crisis.”

Crisis management can go a long way in mitigating a financial impact, according to Harff, and the opposite is true as well.

“The cost of handling crisis situations poorly is far more than most people realize,” he says.

While the way crises are handled can play a large role in what kind of impact an incident makes, the frequency of incidents and the scale of a company are also factors, Bernstein says. 

“If you’re a small operator who operates two or three properties regionally, and you end up with a bad reputation, you may not be able to handle that as well as a national company with 200-300 properties, where one is having problems but the rest are doing well,” he says.

However, if Brookdale and Emeritus were always in the news for poor care stemming from repetitive systemic problems, says Bernstein, ‘that would be a problem.’

“A lot of times it depends on the individual company and how they react, and the extent of the seriousness of the incident,” he says.

Written by Alyssa Gerace

It would be hard to forget the hundreds of negative headlines that erupted across the nation about Brookdale and Emeritus this spring, yet their respective stock prices never took a correlating hit.

Not all are so lucky to have the resources or scale to deal with a public relations nightmare, however. Much depends on the incident itself and the size of the senior living provider involved—as well as how they handle it.

“If there’s not a systemic issue at a company [related to] the quality of care that residents receive, I don’t think it’s a big concern to investors,” says Daniel Bernstein, an analyst with Stifel Nicolaus.

Brookdale, the largest senior living provider, made national media headlines after an incident that took place at Glenwood Gardens, a Bakersfield, Calif. continuum of care community the company operates.

On February 26, a Glenwood Gardens independent living resident collapsed in one of the community’s dining areas. A Brookdale staffer initiated a 911 call, per company protocol, then handed the phone to a nurse.

Throughout the approximately seven minute phone call, the 911 dispatcher repeatedly asked the nurse to either perform CPR on the woman, or find someone else who would, but the nurse refused, saying it was against company policy. The resident ultimately passed away.

When the Bakersfield police department made a recording of the 911 call public on March 2, a media firestorm ensued.

The incident made headlines across the nation, covered by major news outlets such as ABC, CBS, even morning talk shows Good Morning America and The Today Show. Many were disturbed by what they perceived as a retirement community’s failure to help an elderly resident, with most not understanding the different between the levels of care offered at the community. 

A policy expert from industry trade group the Assisted Living Federation of America began making the rounds with national news outlets to provide education about senior care and foster discussion about other companies’ moves to examine some of their own policies.

More than a week after the incident took place and about five days after it began receiving media attention, Brookdale released a statement saying it would conduct a full internal investigation along with a company-wide review of policies involving emergency medical care across all communities.

“We will implement our findings in order to maintain our commitment to providing residents with the highest level of care and services,” the statement concluded.

Despite media-fueled public outcry, the incident seems to have had little immediate impact on Brookdale’s financial health, if its stock price is any indication.

“For Brookdale, [most investors] just viewed it as an isolated incident—not that an isolated incident can’t cause monetary damage, if someone decides to take legal action and sue the company,” says Bernstein. “But there aren’t [multiple] incidents happening at Brookdale communities.”

Despite massive amounts of bad press and a Yelp page for Glenwood Gardens filled with one-star ratings based on the nurse’s refusal to give CPR, Brookdale’s publicly-traded stock didn’t seem adversely impacted, although the incident’s impact on occupancy levels is unknown.

During the week following the incident and resulting media scrutiny, Brookdale’s stock rose from the $27 range to over $29 by the time the market closed on Friday, March 9.

“A lot of times [the financial impact] depends on the individual company and how they react, and the extent of the seriousness of the incident,” Bernstein says.

A lot can depend on the involved parties, as well.

The family of the Brookdale resident who died understood the level of care and service offered in the community’s independent living setting, and said they wouldn’t be pressing charges.

Had the deceased resident’s family not been supportive of the community, Brookdale could have been facing a situation similar to Emeritus’ legal battle with the family of a memory care resident they alleged developed multiple pressure sores at an Emeritus community in 2008 before moving to a nursing home and ultimately passing away.

The family alleged the death was connected to the pressure sores and quality of care the elderly woman had received at the Emeritus community, and a jury sided with them, finding the company guilty of elder abuse and wrongful death and slamming them with a $23 million verdict.

Similar to Brookdale, however, Emeritus stock did not register a substantial change in value while the situation played out in the media.

Throughout February, when the case was being heard in court, Emeritus’ stock price had a steady upward trajectory before dipping slightly on March 6, the day after the company was found guilty of elder abuse and wrongful death. In the next five days, during which the $23 million verdict was announced, stock prices climbed more than a dollar.

The reaction of each resident’s family marks a key difference between the two cases: family support for care providers, which is not guaranteed.

In the wake of the Brookdale incident, many senior living providers have clarified certain company policies with employees, residents, and residents’ families to avoid similar issues. As for Brookdale’s own policies, a spokeswoman told SHN she could provide “no additional information beyond the issued statement, since the internal review is still underway.”

Shaping the Narrative

The Brookdale incident and the way the company handled it arguably did not have a substantial impact on its bottom line, but others have seen much different outcomes for their own crises.

The manner in which companies respond to crisis situations can play a large role in how they’re covered by the media, and how the public—and by extension, investors—perceive them, says Todd Harff, president of marketing and public relations firm Creating Results.

One community had a mold issue that displaced several residents, and was advised by its attorneys to not give the press any comment.

“They came across as being entirely unconcerned, and became guilty in the court of public opinion, whereas they could have come across with much more empathy for the people who had been displaced from the mold,” says Harff, who didn’t disclose the name of the community.

As a result, the community went for about a year without any sales, and it took about two years before it starting getting referrals again.

How situations are handled at the offset can determine the trajectory and tone of media coverage, says Jim Janicki, vice president of marketing and communications at Hillcrest Health Services and an accredited public relations professional.

“The most important thing is to acknowledge your commitment to your residents,” he says.

Janicki previously worked for an ElderWood Senior Care community in Western New York where a resident diagnosed with Alzheimer’s walked out the door. ElderWood looked for the resident for four days, with more than 100 volunteers participating in the search, and was able to shape how the media covered the story.

“We didn’t want to fight the battle as to how he got away from the facility,” Janicki says. “The message was, ‘Let’s find him.’”

Unfortunately, by the time the resident was found, he had passed away, prompting another round of media exposure.

However, in this particular case, the family of the resident was supportive of ElderWood and its efforts to find him, he says. With no perceived scandal to pursue, media coverage soon turned to the next newsworthy occurrence, and the community never experienced a drop in census.

“It comes down to how you handle the crisis,” says Janicki. “We could have botched it up, and before you know it, people could have moved their loved ones out. It’s not necessarily the crisis that leads to a drop in census—it’s how you manage the crisis.”

Crisis management can go a long way in mitigating a financial impact, according to Harff, and the opposite is true as well.

“The cost of handling crisis situations poorly is far more than most people realize,” he says.

While the way crises are handled can play a large role in what kind of impact an incident makes, the frequency of incidents and the scale of a company are also factors, Bernstein says. 

“If you’re a small operator who operates two or three properties regionally, and you end up with a bad reputation, you may not be able to handle that as well as a national company with 200-300 properties, where one is having problems but the rest are doing well,” he says.

However, if Brookdale and Emeritus were always in the news for poor care stemming from repetitive systemic problems, says Bernstein, ‘that would be a problem.’

“A lot of times it depends on the individual company and how they react, and the extent of the seriousness of the incident,” he says.

Written by Alyssa Gerace

Capital One Closes $19.5 Million Loan for Revera Health Systems

Capital One Bank announced on Monday it had provided a three-year, $19.5 million secured term loan to Revera Health Systems, Inc., a long-term care and rehabilitation provider with multiple skilled nursing centers across the U.S.

Proceeds of the loan were used to refinance existing senior debt on eight of the health system’s skilled nursing facilities in Maryland, New Hampshire, New Jersey, and Vermont. Revera Health Systems also expanded its relationship with Capital One Bank to include despots and treasury management services. 

MBK Senior Living Sells Two Properties to Brookdale for $56.1 MIllion  

Brookdale Senior Living recently purchased two Spokane, Washington properties from MBK Senior Living for $56.1 million. 

The properties, built between 1999 and 2003, include a combination of assisted living and memory care units, with an additional 20 independent units in one of the communities. Combined occupancy of the properties is roughly 92%. 

CBRE represented MBK in the transaction. Terms of the deal have not been disclosed. 

JV Buys Calif. Senior Housing Complex for $10.5 Million 

Preservation Partners and Clifford Beers Housing recently purchased a 90-unit affordable senior housing complex in Wilmington, Calif. for $10.5 million, represented in the transaction by Tim Steuernol with NAI Capital’s West L.A. office.

The seller is VPP Banning Villas Apartments VP, represented by Kanna and Ramu Sunkara of Sunkara investments.

The property was built in 1976 and has 90 one-bedroom units with wood frame and stucco construction. Property amenities include a large courtyard, a clubhouse, and carports for each unit. 

There are also plans in the works to completely renovate the complex with a new roof, kitchens, bathrooms, and appliances throughout. 

“We are pleased to have been able to preserve this asset as senior housing for the next 55 years with the help of Clifford Beers and Enterprise,” Jon LaLanne, partner with Preservation Partners, said in a statement. “The commitment we received from HUD will allow us to do approximately $50,000 per unit in capital improvements.”

Senior Solutions Management Group Adds 2 ALFs to Portfolio 

Senior Solutions Management Group announced on April 4 a partnership with Elder Hope Investments in which it will take over operations for two of Elder Hope’s licensed assisted living communities in the Atlanta, Ga. market.

The Hope Memory Care Centers in Dacula and Fayetteville, GA. represent SSMG’s first communities in the greater Atlanta area.

“Senior Solutions Management Group is proud to partner with Elder Hope Investments to manage their Memory Care Centers located in Dacula and Fayettville, Georgia,” said Todd Barker, Chief Operations Officer for Senior Solutions Management Group, in a statement. “With their expertise in development and our unique management approach, we are confident we will deliver a new model of memory care services that others will follow.”

Each community has 64 units which will be divided into four smaller “villages,” says SSMG, with each village representing the various stages of Alzheimer’s disease and the unique care that each stage of the dementia requires. 

SSMG will use electronic medical records and electronic care plans in the Hope Memory Care Communities, as it does in the other communities it manages.

The Dacula community just recently received its Assisted Living license, making it the seventh senior living community in Georgia to obtain the new, more comprehensive licensure. The Fayetteville location is currently under construction and will have the new licensure when it opens its doors to the public in mid- to late summer. 

SSMG now has 12 communities, some in operation and others in various phases of development, in the state of Georgia. 

SMA & ValStone Partners Acquire Fla. Community for $2 Million

Senior Management Advisors, Inc. (SMA) and ValStone Partners, LLC recently acquired the Palazzo Di Oro, a former assisted living facility that closed in 2011, for $2 million. The joint venture partnership plans to renovate the property and reopen it as Grand Villa of St. Petersburg, a memory care and assisted living community.

“This is a wonderful property that should receive an extremely positive reception from local residents after renovation is completed in late 2014,” said Steven Piazza, president, Senior Management Advisors, in a statement. “We will be investing a significant amount into renovation and improvements of the interior and exterior and look forward to serving local residents in keeping with our commitment to top quality services offered in a homelike atmosphere.”

This marks the eleventh property in the SMA and ValStone venture in which the two organizations have collaborated on the purchase, renovation, rebranding, and management of senior living communities. 

Along with the $2 million price tag, SMA and ValStone are anticipating multi-million dollar renovations, expected to take 18 month, after which Grand Villa of St. Petersburg will reopen with approximately 150 units. Of those, 30 units will be dedicated for memory care. 

Renovations will include remodeling of the first floor to include an Internet cafe, library, billiards parlor, beauty salon, barber shop, and private dining room, with common areas including lounges and activity rooms. Resident rooms will also be remodeled to include kitchenettes with built-in refrigerators and microwaves, spacious closets, and large private baths. Emergency alert call systems will also be provided in all bedrooms and bathrooms.

Exterior renovations will include landscaping, and updating the entrance and parking lot. 

Bradley Clousing of Senior Living Investment Brokerage facilitated the transaction. Jordan Behar of Behar + Peteranecz: Architecture is the project architect. 

The former Palazzo Di Oro was built as a hotel in 1971 and underwent a renovation in the 1990s, when it was converted to an assisted living community. additional improvements were made in 2005, but in 2011 the property was foreclosed on by the syndicate of lenders.

SMA and ValStone have previously collaborated on other hotel-to-senior living redesigns, most recently the Tides Hotel in Melbourne, Fla., which reopened in 2011 as Grand Villa of Melbourne. 

New Mexico Senior Care Community Sells for $3.5 Million

Senior Living Investment Brokerage, Inc. facilitated the sale of an assisted living and memory care community in Hobbs, New Mexico for $3.53 million to a regional owner/operator based in the East Coast.

The 69-unit senior care community was originally constructed in 1964 as a hotel, then was converted in 1990 into senior housing. It underwent renovations in 2002 and 2010.

The one- and three-story building is approximately 63,500 square feet and is located on 2.4 acres. The property has a “strong operating history” according to Senior Living Investment Brokerage, with occupancy near 87% at time of sale. 

The seller is a national owner/operator based in Oregon who divested the asset to utilize the capital for other corporate purposes. 

Jeff Binder, Matthew Alley, and Toby Siefert of Senior Living Investment Brokerage handled the transaction. 

NorthStar Healthcare Makes Initial $2 Million Senior Living Investment

NorthStar Healthcare Income, Inc. announced recently it had made its initial investment by purchasing a $2 million pari passu participation interest in an $11.25 million senior loan from an affiliate of the sponsor, NorthStar Realty Finance Corp. (NYSE:NRF).

The loan and participating both bear interest at 7.0% throughout the one-month LIBOR index with a minimum interest rate of 8.0% per year.

The sponsor recently originated the loan and sold the participation to NorthStar Healthcare at its cost basis. NorthStar Healthcare will purchase additional amounts of the loan from time to time as additional capital is raised, thereby increasing the size of its participating until it owns the whole loan.

A 112-unit independent living, assisted living, and memory care community secures the loan. The community is managed by an “experienced” operator and located in Madera, Calif.

“We are very pleased to announce our initial investment in an asset that is consistent with our targeted investment portfolio and our sponsor continues to generate an attractive pipeline of additional investments that will allow us to quickly invest the company’s capital as it is raised,” said Daniel Gilbert, CEO of NorthStar Healthcare, in a statement. 

Emeritus Sells Assisted Living Community to Montana Investors

Emeritus Corporation (NYSE:ESC) recently sold an assisted living community in Butte, Montana to a group of local investors, reports The Montana Standard.

Big Sky Senior Living, which opened in 1998, will return to its former name, the Waterford, and be operated by Health Management Services. 

The 161-unit community has 149 apartments and 12 independent living cottages, and has about 100 residents. The new management company’s first goal is to increase occupancy, the Standard reports. 

Other plans include general upgrades for flooring, windows, lighting, and more, along with the addition of a memory care unit by converting an existing wing into an approximately 20-unit secured ward.

Kandu Capital, LLC and its operating company Bloom Senior Living announced on Monday the acquisition of two senior living communities in Bluffton and Hilton Head, S.C. for $7.2 million from Brookdale Senior Living. 

“These acquisitions follow our strategic approach of selectively acquiring and managing well-located, value-add communities that fit within our existing portfolio,” said Bradley Dubin, Bloom’s director of acquisitions. 

Carolina House of Bluffton was built in 2000 and has a total of 59 units comprised of 43 assisted living units and 16 memory care units. It is situated on 10 acres and is located across from the Riverside at Belfair/Belfair Gardens campus.

Carolina House of Hilton Head was built in 1999 and has a total of 58 units, comprised of 43 assisted living units and 15 units of memory care. It is situated on 3 acres, about 10 miles from the Bluffton communities. 

The communities’ names have been changed to Bloom at Bluffton and Boom at Hilton Head.

“While the communities were previously owned by a national provider and have been premier providers of assisted living and memory care services, we have a well-defined plan to ensure the communities are consistent with our unique ‘family owned and operated’ operating style and the Bloom brand,” said Scott Kantor, Bloom’s director of operations. 

Bloom Senior Living plans to incorporate its customer service platform, dining program, and life enrichment program into the newly-acquired communities, along with provide personalized services.

The company paid $62,000 per unit for the acquisitions, according to director of finance Tony Kantor, and plans to upgrade the properties. Kandu Capital used $6.2 million in cash and a $1 million mortgage to purchase the assets. 

Written by Alyssa Gerace

Brentwood, Tenn.-based Brookdale Senior Living (NYSE:BKD) is the nation’s largest senior living provider for the second year running, according to the Assisted Living Federation of America’s (ALFA) annual list.

The publicly-traded senior living company has a total resident capacity of 64,354 beds among 647 properties split mostly between independent and assisted living, along with around 7,500 memory care beds.

Rounding out the top five 2013 Largest Senior Living Providers are Emeritus Corp. (NYSE:ESC), Holiday Retirement, Sunrise Senior Living, and Life Care Services LLC.

This year’s top 80 providers account for a total operational resident capacity of more than 514,000, according to ALFA, about 2% higher than last year.

Top Ten Largest Senior Living Providers of 2013

1. Brookdale Senior Living – 64,254 beds in 647 properties
2. Emeritus Corp. – 47,443 beds in 482 properties
3. Holiday Retirement – 42,811 beds in 316 properties
4. Sunrise Senior Living – 32,464 beds in 262 properties
5. Life Care Services LLC – 25,520 beds in 103 properties
6. Five Star Quality Care – 24,433 beds in 214 properties
7. Erickson Living – 21,110 beds in 16 properties
8. Atria Senior Living Group – 16,068 beds in 130 properties
9. Capital Senior Living Corp. – 12,900 beds in 101 properties
10. Senior Lifestyle Corp. – 11,519 beds in 99 properties

About 14% of the top senior living providers’ capacity consists of memory care beds.

As of January 1, 2013, the nation’s top five memory care providers are  Seattle-based Merrill Gardens LLC; Seattle-based Emeritus; McLean, Va.-based Sunrise Senior Living; Brentwood, Tenn.-based Brookdale Senior Living; and Toledo, Ohio-based HCR ManorCare.

View the full list.

Written by Alyssa Gerace