AUSTIN, Texas — It’s often been said that those who ignore history are frequently condemned to repeat it, cautions Bob Kramer, founder and former CEO of the National Investment for Seniors Housing & Care (NIC).
“By looking back at the past 30 years of growth in our industry, we’re presenting to you today six lessons learned from both the successes — they’ve been notable — and the mistakes and failures so that hopefully we can all be wiser in the next growth cycle,” emphasized Kramer during a lively panel session he led on Monday afternoon as part of the 2025 NIC Fall Conference.
More than 3,100 industry professionals gathered at the JW Marriott Austin for the three-day event that took place Sept. 8-10. Joining Kramer on stage for the lessons learned panel were Leigh Ann Barney, president and CEO, Trilogy Health Services LLC; Stephanie Harris, CEO and principal, Arrow Senior Living; Kurt Read, partner, RSF Partners; John Rijos, co-founder and operating partner of Chicago Pacific Founders and founder and chairman of CPF Living Communities; and Steven Vick, CEO, Signature Senior Living LLC.
Kramer began the session — titled “Understanding the Past of Seniors Housing and Long-Term Care to Prepare for our Future” — by recapping where the industry stood nearly three decades ago. The period of 1996 to 1997 was known as the year of the assisted living IPO (initial public offering), he said.
“There were 28 publicly traded skilled nursing companies, with Andy Turner growing Sun Healthcare and Bob Elkins building IHS (Integrated Health Services), among others. Those were the days of the cost-plus reimbursement model (a system in which providers were paid based on their actual reported costs of providing care, plus an additional percentage for profit). There were nearly as many assisted living publicly traded companies, many with no history of positive earnings,” explained Kramer, who now serves as a strategic advisor to NIC.
One industry veteran earlier in the week told Kramer that the assisted living sector was the pet rock of the stock market in the 1990s, much like AI is for investors today.
“But a lot of things did not go as planned after the euphoria and rapid growth of the mid-1990s. As we enter 2026, there are a lot of loud echoes of the same sentiments from 30 years ago,” said Kramer, pointing out that plenty of capital is jockeying to enter the sector along with a sea of entrepreneurs.
“Many of you here are excited, ready to launch the next dominant senior living platform. Are we on the verge of the next 30-year super cycle? Demographics are compelling. Supply growth is at record low levels. In addition, we now have reliable data available to both investors and operators,” noted Kramer.
In a press briefing earlier on Monday, NIC MAP CEO Arick Morton announced that the data analytics firm plans to expand its coverage from 140 markets to 210 markets in the first half of 2026 and then eventually to more than 300 markets.
Against that backdrop, the panelists weighed in with their thoughts on lessons learned.
No. 1: Develop your business model starting with the customer you plan to serve and how you plan to serve them.
That strategy sounds simple to execute until one realizes there are three critical ingredients to building a business model for success, said Read of RSF Partners, a Dallas-based real estate private equity firm.
“One is a maniacal focus — a passionate focus — on a particular customer who the entrepreneur and business can really understand and know,” emphasized Read. “That’s not enough because once you identify that customer, then you have to build a culture and an operating model to serve that customer. And even that is not enough. Then you have to create an environment within which you can serve that customer and operate with a margin of safety at a cost structure that allows you to do it again. In other words, raise money,” said Read.
The best example Read could think of was Holiday Retirement Corp (originally known as Holiday Management Co.), which was established by William Colson in 1971 in Salem, Oregon. Holiday offered an affordable independent living product for the middle market. The company focused on providing value through an all-inclusive model with amenities such as meals, housekeeping and maintenance-free living.
Integral to Holiday Retirement’s success was the “co-managing couple” embedded at each property, according to Read. In short, the two couples lived in the buildings they managed. “They would be able to make that building their home that you are living in.” The number of units per community across the portfolio averaged about 150.
“Within that business model, he was very disciplined on the cost side so that he could deliver a 15 percent unlevered return on cost. He built over 300 of those [communities] in the U.S.,” noted Read.
In 2006, Fortress Investment Group acquired Holiday for just over $6.6 billion.
No. 2: Engineer your business with the end in mind. What is your north star, your organizing principle?
Rijos of Chicago Pacific Founders said that too many times over the past 20 years he’s watched companies enter the seniors housing space without a plan. “They didn’t know exactly what kind of communities they wanted to own. They didn’t know what size, they didn’t know what product mix, they didn’t know what geographies. They just wanted to be in seniors housing.”
With $2.7 billion in assets under management, Chicago Pacific Founders is a healthcare private equity firm with investments across both healthcare services companies and healthcare real estate. The company was founded in 2014.
“We had a 10-year plan. We’ve exceeded that 10-year plan by pretty sporty numbers. We’re pleased about it,” said Rijos, though he didn’t provide any figures.
Rijos urged investors to build their talent and skill sets around the types of businesses they want to own. Too many companies don’t do that, he said.
“You have to plan your organization that way, and you have to measure it regularly. You have a 10-year plan. OK, every two years take inventory. Where are you? How have you done against your plan? It’s not linear, but you need to constantly be looking at it.”
Vick launched his career at Sterling House and Assisted Living Concepts before co-founding Signature Senior Living in 2005. In 1997, Sterling House Corp. merged with Alterra Healthcare Corp.
At the time, the consolidated companies represented one of the largest assisted living players in the country, operating approximately 450 residences in over 25 states.
Vick served as the COO for Alterra from 1997 to 2001, at which time he became its president until his departure in 2002.
Alterra faced financial difficulties and operational challenges in the early 2000s. In 2004, Alterra was acquired by a larger healthcare company, Kindred Healthcare.
“My lesson learned from the Alterra go-go days was that we thought if we built it, they would come. We were part of that [period in the late 1990s] where we were opening a building every 32 hours,” said Vick. “Don’t do that.”
When he and his business partner launched Dallas-based Signature Senior Living, Vick had a strategic comprehensive business plan with the end game in mind from the get-go. His partner wanted to retire in five years. Their target customers were frail seniors in need of assisted living or skilled nursing care at a price point that was below the cost of a private room in a nursing home.
The business partners designed a plan to build 10 seniors housing communities in northeast Texas that were three hours away from Dallas. The buildings were essentially a mid-market product (affordable for middle-income seniors).
“We understood the competition, we felt that we could compete in those markets, and we picked the markets specifically for that product that we designed. We built out 10 buildings in one year because I needed that management fee to fund the team that we had. So, we did all 10 at once,” recalled Vick.
Signature Senior Living eventually ended up building out 12 buildings. “We opened them, we filled them, we sold them, and we did it in less than four years.”
No 3: Make sure your capital partner understands and supports your business model. Customer strategy must inform capital, not vice versa.
One reason that Louisville, Kentucky-based Trilogy Health Services, founded in 1997, has such amazing staying power is the company historically has formulated its business strategy first, and then gone out and found investors that are willing to back that strategy, observed Read.
“I can’t tell you [the extent of] the wreckage out there. There are so many companies that do it backwards. That is not the right way to increase your probability of success. We’re here on stage with people who focus first on where they are going and why, and then engineer backwards for success,” said Read.
Arrow Senior Living Management’s strategy was born out of a crisis. Harris is recognized for transforming low-performing, low-occupancy communities into solid performers within a matter of months. In 2005, she established Turnaround Solutions, a seniors housing consulting company, while a student at St. Louis University School of Law.
In 2009, Harris transitioned the company from a consultant model to an operating model and rebranded the company as Arrow Senior Living Management.
She is also the author of “Turning Leads into Move-Ins,” a digital training guide for seniors housing sales.
As of June 1, 2025, Arrow Senior Living Management ranked as the 42nd largest operator of U.S. seniors housing with 5,168 units across 39 properties, according to the American Seniors Housing Association. The company is based in St. Charles, Missouri.
“I actually entered senior living in 1999 as part of a crew cleaning up some of these messes we’re talking about,” said Harris. “And I wouldn’t trade it for anything because it required me to be creative. The typical [solution] didn’t work, and we were able to select where we wanted to go. It wasn’t about being regionally specific at a time because typically we were trying to clean up a mess that even a regional operator couldn’t clean up.”
Turnaround Solutions was considered to be “counterculture,” within the seniors housing industry when it emerged on the scene, recalled Harris. “I remember the ideas of what we were trying to accomplish being scoffed at, but we could color outside of the lines, and it would work. I wouldn’t trade the opportunity to be able to do that because it informed what I wanted to do, what ultimately became Arrow Senior Living Management. We rolled our consulting business into Arrow over time to stay focused, and then we found the right capital partner. We’re very fortunate.”
No. 4: Be conservative in your capital structure. Being overleveraged is your Achilles heel.
Eleven years ago, Chicago Pacific Founders’ first fund raised about $250 million. Rijos said the undertaking “took a while” and wasn’t easy. One wealthy, famous person who he said will remain anonymous offered to invest $100 million in the fund.
“But after about five or six meetings, I realized I can’t stand this guy, and there’s no way I’m going to be with him for the next 10 years. So, I literally told him, ‘Keep your 100 million dollars.’ He thought I was nuts, and he was probably right.”
Don’t be afraid to say “no,” advised Rijos. “The capital structure is really important.”
During the COVID-19 pandemic, Rijos observed some seniors housing developers construct communities with 15 percent equity in their projects and 85 percent debt.
“That’s a disaster because things will go wrong. There will be downturns. And if you can’t put 35 to 40 percent of equity into your community, you shouldn’t [do the deal].
One solution to inject more equity into the deal is to pursue joint venture partners, said Rijos. “Don’t price to perfection. Have sufficient equity so that you can make decisions that will better the community and better your services and better your performance over that 10-year time frame — that doesn’t bootstrap you because you had a bad six months.”
No. 5: Maintain your focus. Understand the relationship between operational complexity and growth.
Trilogy Health Services operates over 130 senior living communities across five states: Indiana, Kentucky, Michigan, Ohio and Wisconsin. Over 60 of those communities are in Indiana.
The business plan that company founder Randy Bufford created included some basic core operating principles that Trilogy still operates by today, according to Barney. First and foremost was the customer experience — creating a hospitality-type experience in a healthcare setting.
The second principle was to offer a continuum of care, including short-term rehab, skilled nursing, assisted living, memory care, and now independent living, all on the same campus.
“It was a really unique concept at the time because there was the skilled nursing on one hand, and then you had the assisted living,” explained Barney. “His idea was to bring [the two] together because people were going to age in place and need services. The thinking was, ‘How can we meet them across that continuum?’”
The third principle was to stay Midwest-focused. “One of our first vision statements was to be the best healthcare company in the Midwest, and we still keep that out in front of everybody.” Why? Trilogy’s familiarity with the markets in the region, including the labor market, provide a sense of comfort.
“Our business is very complex because of all the service lines we offer,” said Barney. What’s more, the regulatory environment surrounding skilled nursing facilities is different in every state and so is the level of Medicaid reimbursement, she pointed out. “The more complex your business is, obviously the less rope you have.”
That’s why Trilogy has remained singularly focused on the Midwest for nearly 30 years, according to Barney. The company knows the ins and outs of each state it operates in across the region, so it can more easily roll with the punches. “It lessens the complexity a little bit.”
No. 6: Invest in building an organizational culture and demonstrating trust in your team.
Reinvestment in employees can significantly bolster the company culture, Barney believes. Trilogy employs over 10,000 people, according to the company’s LinkedIn page.
“It has to be tangible investment, not just wages, not just benefits,” emphasized Barney.
Trilogy offers an apprenticeship program for every hourly position within the organization. “You can come to us in high school, or right out of high school, and we pay for you to grow along the way. We have several young ladies and gentlemen within the organization who started with no education in healthcare and now run skilled continuum of care buildings for us because they’ve gone through all that career pathing with us,” said Barney proudly.
Rijos said Chicago Pacific Founders wants employees who are trustworthy above all else, and he is a big believer in a flat organizational structure versus one that is full of layers of management. He wants and expects employees to be willing to come up with new ideas and implement them without fear of penalty.
“There’s only a penalty if you don’t try anything because we don’t want coin-operated communities [or] coin-operated executive directors. I want people to think creatively and act creatively and who are fearless about trying new things because they know they’re not going to get in trouble.”
— Matt Valley