DALLAS-FORT WORTH, Texas, Fall 2020 — They’re not related—they met at SMU on their first day of orientation in 2010. But Journey Capital’s Anand Patel and Narayan Patel are in sync about the future of senior living: It’s all about creating places where people can engage with purpose and live their best lives.
Their key to success? Synergy between senior living developer/owners and operators throughout development, acquisition, and hands-on operations—and partnerships like the one they forged with Shawn Corzine, CEO of SilverPoint Senior Living.
The Journey Capital co-founders, among the experts in our commercial real estate feature, “21 on 2021,” and SilverPoint Senior Living’s Shawn Corzine share their outlook on what’s next in a Q&A.
What opportunities and challenges do you see in the senior living market next year?
Anand Patel: The No. 1 challenge right now for senior living communities is that families cannot visit their loved ones due to state restrictions for the safety of our residents. The State of Texas recently rolled out a Phase 1 Visitation program, and our communities have submitted both our visitation booth construction elements as well as our policies and procedures for actual visitation. Once this is approved, we can begin safely scheduling visits for family members.
In May, we opened an assisted living and memory care community that was well over 35 percent preleased. However, due to the COVID-19 restrictions put in place, many family members have decided to hold off on moving in their loved ones, primarily due to the uncertainty of when they will be able to visit their family members.
With the senior population being the most vulnerable to COVID-19, many lenders have taken a “wait-and-see approach,” holding off on lending to this asset class as it is seen as a riskier asset class next to hotels. This will lead to planned developments taking much longer than expected to get off the ground, if they aren’t canceled altogether.
Narayan Patel: In light of COVID-19, we believe safety, security, and purpose have taken on new meanings in the world of senior living. Strong operators physically and programmatically design to create a supportive, safe environment that helps residents engage with purpose and age better longer, especially during these challenging times. Having the right operating partner today is more important than ever—and our recent partnership with SilverPoint Senior Living has proved it, as we’ve yet to have a single resident contract COVID-19 due to the strict policies and procedures put in place.
As to opportunities, we believe we’ll see an influx of acquisition opportunities of distressed assets—composed from overbuilt markets and large institution operators—giving local owner-operators an opportunity to repurpose the asset with new management. You’ll see new faces, new attitudes, and new owners.
Has the pandemic resulted in any changes in the way you design or equip senior living communities?
Anand: Coming out of COVID-19, we see a motivated element to the design aspects to promote resident health and wellness. We believe residents will only consider moving into a community if they see the opportunity to be their best selves, live their best life, and be capable and engaged as long as possible. The focus now can be driven into three primary dimensions of wellness that affect a resident’s quality of life: physical, social-emotional, and intellectual wellness.
Narayan: The link between operations and design is crucial right now. If a building’s design and operations are mismatched, it just never feels comfortable. Our new designs strive to promote patterns of movement, feelings of home, and access to natural light and outdoor spaces.
What current and upcoming projects are you excited about?
Narayan: We’re most excited about our new partnership with Shawn Corzine that we inked earlier in the year, which was also an investment in SilverPoint Senior Living—a new management and consulting company specializing in operations with a core focus on independent living, assisted living, and memory care communities. From a real estate investment and development perspective, having this arm is more important than ever. We believe the synergy between developer/owner and the operator is the key to success. As we continue to grow, Journey Capital will work with SilverPoint to grow its development and acquisition pipeline through hands-on operations.
Anand: We’re also excited about developing The Edition of Saginaw Senior Living. Early in the year, we were well underway in the planning stages to develop a senior living community in Saginaw—consisting of independent living cottages, assisted living, and memory care. Given the changes in the lending environment for new-construction projects, we had to get creative in proving to lenders why we had a great project with strong demand. While we’ve yet to purchase the land, we received the land seller’s permission to place a “coming soon” sign on the site and launched our marketing campaign with SilverPoint—including renderings, a website launch, social media channels, and working with the City of Saginaw to help gain exposure. After the city’s Facebook post about our community, we received an outpouring of responses, feedback, and calls about our plans for the community. That resulted in a 45 percent pre-lease of our independent living cottage community. Hence the decision to break down the project into two phases, with phase one beginning construction in November 2020 on the Independent Living Cottages.
How are you handling the change and uncertainty caused by the pandemic?
Shawn Corzine, CEO of SilverPoint Senior Living: We keep hearing over and over how the world has forever been changed and will now operate under a new sense of normal, which we all hope will arrive soon. I’m beginning to see one of these new “normals” lived out as we lead our communities.
A few months ago, we led our communities in the former “normal” way, with regular site visits to help the local community leadership and lead them toward success. However, due to the coronavirus restrictions we’ve put in place, these site visits have been restricted in order to help protect the health and safety of our residents and staff.
As a result, a new “normal” of virtual leadership has now emerged. Our executive team is now leading our communities from a distance, but I believe that it has become much more intentional.
We’ve always firmly believed that everything rises and falls with leadership. As a relatively new and growing company, we’re incredibly thankful that a small team of executive-level leaders who believe in our mission have joined us on this journey.
I’ve had a front-row seat to watch as Debi Akeroyd, our VP of people and operations, has diligently and intentionally led our communities through multiple weekly virtual meetings to keep them updated and supported to successfully handle this crisis. I’ve seen the results of Kelly Schwennesen, our VP of sales and marketing, coaching and instructing our community relations directors and executive directors on how to conduct an effective virtual tour, so families can see what a great and safe place a SilverPoint community can be for their loved one. I’ve also seen the tedious work Travis Wommack, our CFO, has put in trying to roll out a new operations software system that was in the works long before the virus hit, but still has to be rolled out, and train the teams on how to use it effectively.
I’ve learned through this experience that leading virtually takes an immense amount of trust, clarity, and empowerment. Our team has exhibited all of these traits with incredible grace, and we’ve ensured that our people feel supported, encouraged, and well equipped to face each day with confidence.