In NIC’s upcoming Fall Conference, attendees will have the opportunity to learn how to use consumer insights from other industries as they formulate strategies to address some of the challenges facing the seniors housing sector today. The session titled “Activating Consumer Insights: Lessons from Other Industries” is taking place on Thursday, September 12th at 2:15 to 3:30 PM CT and promises to be thought provoking and insightful.

Consumer insights and feedback are routinely used to guide product development and marketing in industries such as hospitality and consumer goods. The seniors housing sector, however, has yet to widely adopt this approach to addressing its own product development and marketing challenges.  This session is designed to help industry participants think about marketing as a feedback loop in which consumers’ input and behavior inform product development and lead to greater innovation.   This is particularly relevant for today’s operators and capital providers since the seniors housing sector faces numerous challenges, including evolving demographics, changing consumer expectations and demands, and, for many potential residents, a lack of familiarity with the product.    

Moderated by Maria Nadelstumph, VP, Organization Development & Program Excellence at Brandywine Living, the discussion will be focused on solutions relevant and appropriate to the seniors housing and care sector. Nadelstumph will use her first-hand experiences to ensure that the discussion is useful to session participants. She has direct experience with the development of Brandywine’s high-end hospitality model, which features numerous innovations designed in response to shifting demographics and consumer demands.  

The discussion will hone in on how the tools and processes used routinely  in other industries can be employed to gather and make use of consumer feedback  in the development cycle for seniors housing and care. Techniques for borrowing successful innovations from other industries will also be shared.  

Jennifer Rasmussen Windbeck is a Managing Vice President in Capital One’s Retail and Direct Bank, leading the national Capital One Cafes and the Louisiana and Texas branches; as well as Customer Experience, Operations, and Physical Network Management for all branches and cafes. She leads the frontline cafe and branch teams and operations. In addition, Windbeck has responsibility for in-store customer experience and market engagement strategy, including innovating and executing upon customer guidance and transactional capabilities; associate experience and development; local community engagement; and scaling digital-first communications and operational processes.  Windbeck has leadership experience guiding experiential design, investigating customer behavior and change, and how to create something really unique in the market. While confined to the brick and mortar of their branches, Capital One has found a way to change the experience within those four walls to meet the myriad shifting tastes and demands of their customers, ranging from millennials to boomers. 

Heather Reavey, Head of Innovation Delivery at EPAM Continuum, will speak to product innovation. She thinks about where innovation is going and shapes EPAM Continuum’s people, practices, and processes to be there first. Reavey’s career has been dedicated to innovation since she began consulting in the role of Envisioner, focused on designing new-to-the-world ideas and strategies, and demystifying complexity through storytelling to catalyze organizations to take action. Over twenty years, Reavey has led teams and helped launch game-changing ideas and strategies for Procter & Gamble, Insulet, Tetra Pak, American Express, and UnitedHealthcare.  

Reavey will share ways to identify what is a good insight for innovation. She will discuss how to re-frame a challenge for innovation, and how to translate and activate novel ideas into new innovation across an organization and in a business environment.  

This exciting session promises to continue the NIC tradition of applying insights from other industries to bring fresh ideas for product development, and help leaders address the challenges facing today’s seniors housing and care businesses. It will take place in Ballroom VIII, Thursday, September 12, from 2:15 PM to 3:30 PM.  

The Labor Department reported that there were 164,000 jobs added in July, quite close to the consensus estimate.  The July increase in jobs marked the 106th consecutive month of job growth.  The latest six-month average increase is 140,000, the fewest in seven years and less than last year’s 223,000 monthly average.  Nevertheless, the pace of job gains is relatively strong and generally stronger than the levels that have usually prompted the Federal Reserve to cut interest rates in the past.  That said, pressures associated with trade tensions and potential further trade-related weakness in the economy suggest that the Fed may be cutting rates further in September after this month’s 25 basis point reduction.   

Revisions subtracted 41,000 to the prior two months.  The change in total nonfarm payroll employment for May was revised down by 10,000 from 72,000 to 62,000 and the change for June was revised down by 31,000 from 224,000 to 193,000.   Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.   

In July, employment in health care rose by 30,000. In the past year, health care has added 405,000 jobs. Ambulatory health care services accounted for two-thirds of these jobs.

The unemployment rate was unchanged in July at 3.7%.  This is still close to the lowest rate in 50 years.  A broader measure of unemployment, which includes those who are working part time but would prefer full-time jobs and those that they have given up searching—the U-6 unemployment rate—fell to 7.0% from 7.2%.   

Average hourly earnings for all employees on private nonfarm payrolls rose in July by eight cents to $27.98. Over the past 12 months, average hourly earnings have increased by 3.2%, up a bit from June.   For 2018, the year over year pace was 3.0% and in 2017 it was 2.6%. 

  The labor force participation rate, which is a measure of the share of working age people who are employed or looking for work was unchanged at 63.0% in July, very low but up from its cyclical low of 62.3% in 2015.  The low rate at least partially reflecting the effects of an aging population.

Mixed–use developments are a well-known concept in commercial real estate. However, incorporating seniors housing into a mixed–use development is somewhat of a new concept that is just starting to gain traction. Senior Housing News defines a mixed-use senior living development as “a senior living community that includes offerings that are open to both residents and members of the surrounding community”1. Mixed–use developments can take the form of a single building, a collection of buildings, or an entire neighborhood and can generally be classified into vertical, horizontal, and master plan communities: 

• Vertical Mixed-Use Developments combine different uses within the same building with public uses such as retail, restaurants or commercial businesses on the lower floors and private uses such as residential units, hotel rooms, or office space on the upper floors.  
• Horizontal Mixed-Use Developments consist of single-use buildings that are in close proximity to one another or even connected.  
• Master Plan Developments cover a large geographic area and contain a host of buildings/public spaces that serve residents and the community in a variety of ways.  

There are many reasons why mixed–use senior housing developments are becoming more prevalent, but the main reason is that market forces are starting to encourage them. One of the main catalysts is the mass movement of people to cities and the general desire to live in a more urban environment. Seniors are no exception to this trend. They are eager to be closer to the action where they have more opportunities for engaging social and cultural experiences as well as better access to healthcare. According to the Maplewood Senior Living Chairman and CEO Greg Smith, “The number one reason seniors are gravitating to urban markets is access to healthcare.”2 Today’s seniors also prefer to be integrated into the community with people of all ages and not isolated in a suburban environment.  They want to live in a community that offers an active lifestyle with more choices and a connection to the outside community through intergenerational interactions. Those demands are increasingly being met by incorporating seniors housing into new mixed–use developments that offer all the amenities, services, and options that seniors want.  

The desire for additional amenities outside of those provided in the typical senior housing community has encouraged developers to target locations in urban areas or locations that have exposure to urban amenities. Unfortunately, the availability of developable land in urban locations is normally scarce and the price is often much higher than in suburban locations. Those issues can be mitigated or offset with a mixed–use development that combines multiple uses into a vertical mixed-use building. The economic feasibility of the project is much greater if the cost of the land and building can be split among several parties who will benefit from the location and synergy of uses. The entitlement process is also easier in a mixed–use development because the master developer is typically responsible for the master plan, zoning, and permit and approval processes.  

Another benefit of incorporating seniors housing into a mixed–use development is the communal benefits and synergies between tenants and their stakeholders. Senior living developers no longer have to build or offer every conceivable amenity in their facility to be competitive. Instead, they can focus on their core competencies of hospitality and care and rely on the mixed–use community to provide their residents with the amenities and services they desire2. There is also a real potential for partnerships between tenants especially healthcare providers who are a natural partner to co-locate with senior housing operators. The amenities in a mixed–use development also provide a competitive advantage in marketing to adult children and employees who also benefit from the restaurant, shops, and entertainment.  

However, there are also challenges and difficulties associated with incorporating senior housing communities into mixed–use developments. First, the intrinsic design of a mixed–use development means there will be multiple groups of stakeholders occupying the same building and public spaces which can make security difficult. To address this concern, master developers need to make sure the various uses of the building are functionally separate during the design phase such that each tenant has complete control of access to their space3. It also likely means the senior housing provider has to limit its points of access and use electronic locks/key fobs so that they can monitor traffic in and out the community. Another important consideration is the ease of access for third parties such as ambulances, healthcare providers, and food and beverage deliveries. These third party providers have to be able to access the property for the senior housing community to function and be successful. Developers also need to consider the impact that certain tenants may have on other tenants such as restaurants and bars. Residents do not want their apartment to smell like the restaurant below them nor do they want to hear the sounds of a sports bar or people loitering late at night3. Another challenge of incorporating a senior housing community into a mixed–used development is the higher cost of constructing and operating a senior living community (especially a higher acuity facility) 4. Senior housing developers have to compete with luxury multifamily developers for space in a mixed–use development and are often at an inherent disadvantage relative to luxury multifamily developers since senior living providers have to deal with the logistics of running a true operating business.  

In summary, there are both costs and benefits to consider when determining whether to incorporate senior housing into a mixed–use development. However, in today’s competitive environment, it would be wise to consider all options because the needs  of the future senior housing resident will be fundamentally different than the demands of previous generations.  

Andrew Lavinder, Vice President – Real Estate, MidCap Financial Services, LLC

NIC MAP® Data Service clients attended a webinar in mid-July on the key seniors housing data trends during the second quarter of 2019.  Key takeaways included the following: 

Takeaway #1:  Seniors Housing Occupancy Fell to its Lowest Rate Since 2011  

• Based on the quarterly patterns of inventory and absorption, the all occupancy rate for seniors housing, which includes properties still in lease up, fell 20 basis points to 87.8% in the second quarter, its lowest level since 2011 and 2.4 percentage points below its most recent high of 90.2% in the fourth quarter of 2014.   

• Stabilized occupancy for all seniors living properties (defined by NIC as properties that have been open for at least two years or, if open for less than two years, have already reached a 95% occupancy level) was more than two full percentage points higher than total occupancy and stood at 89.9% in the second quarter, down 10 basis points from the first quarter, and down 10 basis points from year-earlier levels.  The 210-basis point difference between the total and the stabilized occupancy rates reflect the large number of properties recently opened and still in lease up. 

Takeaway #2:  Assisted Living Occupancy Slipped to 85.1%,  Its Lowest Level Ever Recorded by NIC.   

• As of the second quarter, there was a five-percentage point difference in occupancy rates, with assisted living hitting a record low of 85.1%, while independent living remained above 90% at 90.2%, unchanged from one year ago, but down 30 basis points from the first quarter. 

Takeaway #3 Assisted Living Construction Starts Trending Lower 

• The four-quarter moving sum of starts for majority assisted living continued to slow in the second quarter of 2019—AL starts totaled roughly 1,700 units, the fewest starts since the first quarter of 2014.  On a four-quarter aggregate basis, starts totaled 10,175 units, also the fewest since 2014.  As a share of inventory, this amounted to 3.5%.  For perspective, in late 2015, it was 6.5%. 
• While this may look encouraging to those concerned about the construction cycle we are currently in, it is important to note that due to the nature of this data, it is often revised either up or down. 
• For independent living, there is also a downward trend.  Starts on a rolling four-quarter basis, totaled 8,939 units in the first quarter.  As a share of inventory, this equaled 2.7%. 

Key Takeaway #4:  Several Markets Experienced Higher Occupancy Rates 

• In the second quarter, 13 markets had occupancy rates lower than year-earlier rates, while 13 had occupancy rate higher and five were unchanged.  For perspective, in the first quarter, seventeen of the thirty-one markets had occupancy rates lower than year-earlier levels, while thirteen markets had higher occupancy rates than one year ago and one was unchanged. 
• The best improvement from year-earlier levels continued to occur in San Antonio where the occupancy rate was up nearly 4.4 percentage points from year-earlier levels to 82.9%.  While this still places San Antonio as having the third lowest occupancy rate, it is a sign in the right direction.  In fact, construction as a share of inventory had reached a very high level of 21.6% in Q1 2015, so the fact that there is very little development currently underway (3.1% of its inventory or 302 units) is a good sign that further occupancy improvement will be able to occur in the coming months. 
• Eighteen markets had occupancy rates higher than the Primary Market average. Starting on the left in the chart is the market with the highest first-quarter occupancy rate: San Jose, at 95.7%, a new high for that market and up 80 basis points from a year ago.  

• At the other end of the spectrum are Houston, with an occupancy of 81.1% followed by Las Vegas (82.3%).   

Takeaway #5:  Properties 10 to 17 Years Old Have Highest Occupancy 

• Occupancy rates vary by age.  The group of properties that are between 10 and 17 years old have the highest occupancy rates.  Over the entire time frame, the average occupancy was 91.2%. 
• Since mid-2017, properties aged 2 to 10 years have had the lowest occupancy rates.  Between 2012 and 2017, they placed second after those aged 10 –17 years of age.   
• Since 2017, properties 25 years and older have done better in terms of higher occupancy rates than those aged 2 to 10 years.  In the second quarter they averaged 90.2%, better than the younger aged properties.    

Key Takeaway #6:  Seniors Housing and Nursing Care Transaction Dollar Volume Up 41% from Year-Earlier Levels  

• Preliminary data shows that seniors housing and care transactions volume registered $3.4 billion in the second quarter of 2019.  This includes $2.2 billion in seniors housing and $1.2 billion in nursing care transactions.  The total volume was the same as the previous quarter and up 41% from year-earlier levels. 

• The rolling four-quarter total seniors housing and care volume was up 6.7% from the prior quarter to $15.6 billion. 
• There was a total of 121 deals closed in the second quarter. 
• Portfolio deals decreased 16% from 32 closing in the first quarter of 2019 to 27 in the second quarter. 

Attendees at the upcoming 2019 NIC Fall Conference will benefit from some of the best networking opportunities of the year, punctuated and enhanced by a full program of informative and insightful presentations. As with all NIC events, attendees are offered a wide range of subject matter and formats, carefully designed to be relevant, useful, interesting, and thought-provoking. Attendees interested in benefitting from the innovations, investments, and lessons learned from businesses operating in real-world conditions will fill the room on Wednesday at 4PM for a unique session titled “Innovations That Work.”

Seniors housing and skilled nursing markets are constantly evolving, often driving owners and operators to look to innovation to add value and improve margins. But, while often promising, and sometimes fruitful, not every innovation yields positive business results. Those that are yielding demonstratable results that create value for residents and owners alike offer extremely valuable lessons – and inspiration – to decision-makers considering their options. Investors and owners alike will find “innovations that work” to be well worth an hour of their time, as they aim to solve the most pressing challenges and take advantage of the greatest opportunities their businesses are facing today.  

This dynamic hour-long session will focus on five separate case studies. NIC staff fielded dozens of applications from potential presenters, culling them down to the best examples of practical innovations that are working and yielding demonstrable, positive results in the marketplace today. Each presentation will cover the details of a day-to-day implementation and will include an analysis of operational and financial impact. Here is a brief overview of each of our “Innovations That Work” for 2019: 

“Boosting staff engagement to improve retention and turnover” 

Submitted by Denise Boudreu-Scott, President, Drive 

A shortage of quality staff impacts everyone. Employees can’t keep up with extra tasks when there aren’t enough hands, sometimes becoming “burned out”. Managers spend their days filling open slots instead of working strategically. Leaders struggle with increased overtime and agency costs.  

Drive is a consultancy that has helped over fifty aging services organizations improve the resident and staff experience, and the bottom-line, through more engaged leaders and employees. They look at the common threads between high performing team members and the reasons why they joined the organization in the first place. Presented by a leader from one of the properties they’ve helped, this presentation will reveal how a host of staffing metrics were improved dramatically at multiple organizations by using Drive’s approach.  

Aided by data and analysis provided with the help of an Associate Professor at Cornell, and his students, case studies provide measurable results, along with details on how staffing issues were improved at different properties. In one case, the organization discovered that 95% of its high performing staff had been referred by a friend, and then was able to use that information to attract more people and reduce 90-day turnover. Data that has been collected since this solution came to market four years ago will be shared and analyzed, reflecting real-world improvements in staff retention and turnover rates.   

“Increasing lead volumes with decision–science” 

Submitted by Nate O’Keefe, CEO, Roobrik 

Two intertwined problems are addressed by Roobrik’s multi-channel digital marketing platform: older adults and their families tend to wait for a crisis before making care decisions, and senior living providers struggle to engage with families earlier in the decision process.  

Roobrik uses decision–science based assessments to help families get “unstuck” and connected to senior living providers. Their “Is it time to get help?” and “Is it the right time for senior living?” assessments use decision–science to reach families who are still in research mode and encourage them to move forward.   

Over 350 communities have added Roobrik’s platform to their websites since it became available three years ago. Presented by an operator who has implemented Roobrik, data shows that the solution drives an immediate 20%-40% increase in online lead volumes, with each lead sharing 23 additional data points about their situation, concerns, needs, and readiness.  

“Driving down depression – and costs – with voice assistant management” 

Submitted by Erum Azeez, co-founder and CEO, Soundmind 

Residents are dealing with the challenges of aging, such as social isolation, boredom, and illness while 90% of facilities are understaffed.  

Less than two years ago, Soundmind launched a secure, HIPAA-compliant voice assistant management platform designed specifically for seniors housing. By centrally managing and customizing voice assistants in resident rooms, common areas, and staff offices, Soundmind-enhanced voice assistants are saving time, streamlining workflows, and positively impacting residents. They connect residents to their families through voice-based text messaging and photo sharing. They also provide secure access to music, news, podcasts, TV and other content. 

An operator now using Soundmind will share their experience implementing the technology – and will present data supporting the company’s claims that their clients see a 95% adoption rate, five times more usage than average consumers, and a 44% reduction in depression scores, while driving down costs and helping top- and bottom-line growth. 

“Slashing unnecessary readmissions with tech-enabled telehealth” 

Submitted by Ray George, VP, Growth and Strategy, Third Eye 

Residents sometimes need immediate medical care and attention at night and on weekends. Rushing them to the hospital is costly, inefficient, and does not always produce the best outcomes.  

Third Eye Health is the nation’s largest post-acute telehealth provider with over 200 customers utilizing their solution across 26 states — helping nursing homes to reduce hospital readmissions and provide higher acuity care.  Their tech-enabled physician telehealth service provides 24/7 and night and weekend medical care. With the company’s mobile-based solution (typically delivered via an iPad), when a patient or resident is in need of immediate medical care, with the touch of a button, the nurse can contact one of their specially trained physicians through secure video and text messaging. 

One of Third Eye’s clients will share their experience, and explain how, on average, Third Eye is seeing a 25% reduction in unnecessary hospital readmissions across its customer base- leading to improved patient care and enhanced profitability for the nursing home.

“Optimizing resident engagement” 

Submitted by Linked Senior 

In senior care today, optimizing resident engagement is not considered to be correlated with a positive return on investment. Yet, research shows that highly engaged seniors are less prone to depression and behavioral issues. Tracking residents’ changing needs and preferences, as well as assessing real-time changes involves tedious paper tasks and is often an inefficient use of staff resources.  

Established in 2007, Linked Senior provides a fully digital solution to programming and planning for over 50 properties, allowing staff more time for individualized and creative solutions.  In 2017, Linked Senior partnered with the Responsive Group in Toronto and Western Oregon University to research resident engagement with funding from the Baycrest-led Centre for Aging + Brain Health Innovation. Over one year, data was collected from 3 Responsive memory care and long-term care communities. Findings suggest that being highly engaged in recreational activity (including the use of Linked Senior) is associated with a 3% increase in cognitive functioning, a 20% increase in social engagement, an 18% decrease in aggression, and a 20% decrease in antipsychotic medication use.  There was also a $29,000 financial saving in staff efficiency. 

A representative from Juniper Village at Brookline in State College, PA, will present how their team became more efficient and productive using digital technology, including Linked Senior, to track residents’ changing needs and preferences, increase program attendance, and see some real results. In just two years, they’ve seen increases in resident engagement from 12 minutes per day, per resident, to 21 minutes, and increased resident participation rates to 93%.