Compassionate and innovative developer, owner and manager opens its 50th community in the Northeast.
By Susan Fishman
When Benchmark at Split Rock opened in Shelton, Conn., in May, the event was a significant achievement on many levels for Benchmark Senior Living LLC, the largest senior living provider in New England.
For starters, the state-of-the-art, LEED-certified community was among the first of its kind to adopt the latest technology for both safety management and recreational activities for residents, visitors and staff. The opening also was the culmination of more than 17 years in the company’s pursuit of innovation in seniors housing. The cherry on top was that Benchmark at Split Rock marked the company’s 50th seniors housing community.
Wellesley, Mass.-based Benchmark develops, owns and manages senior living communities in the Northeast, including independent living, assisted living, memory care and continuing care retirement properties. The portfolio of the privately owned firm includes 15 ground-up developments and 35 acquired properties. Assisted living residences comprise the majority of its 4,471 units.
CEO Thomas Grape developed office buildings at Spaulding & Slye Investments (now Jones Lang LaSalle) for two years before trying his hand at seniors housing. He made the switch in 1986 when Peter Small, president of Spaulding & Slye, proposed a new venture that would bring Grape to Boston. Grape was stationed in Washington, D.C. prior to that time.
“My marketing background led Peter to believe I would be a good fit for a senior living company,” says Grape. “I had never been in a senior living facility before that time, so it certainly took me out of my comfort zone as the industry was still maturing.” Small was the first Benchmark investor in 1997 and has served on the company’s board of directors ever since.
When the company first opened its doors, assisted living was a new concept exploding onto the national scene. “There was a frenzy to build, and 16 companies went public,” recalls Grape, adding that about three of those 16 public companies remain in business today.
Since the beginning, Benchmark’s seniors housing business pattern has been to buy, hold and recapitalize with a new partnership. Another early financial backer was AEW Capital Management, which partnered with Benchmark in 1997 to develop eight properties, known as The Crossings, and acquire three others.
In 2001, Benchmark started a venture with Charlesbank Capital Partners (the group split off several years ago to form BayNorth Capital), which acquired the eight Crossings properties for approximately $57.2 million, and a ninth asset in 2003. It eventually sold those nine properties to a Boston-based real estate investor in partnership with Benchmark, which retained management of the facilities.
In 2004, Benchmark Senior Living entered into a joint venture with Kuwait Finance House (KFH), a sophisticated international player with billions of dollars in U.S. real estate holdings at the time. KFH invested $148 million in 11 properties through one of Benchmark’s many funds.
KFH eventually unwound that investment and then started a second venture with Benchmark in 2011, the year that the New England company entered into an $890 million partnership with Health Care REIT under the REIT Investment Diversification and Empowerment Act.
The partnership with Health Care REIT included 34 Benchmark seniors housing communities in six New England states totaling 3,009 units. As a result of the partnership, Benchmark also has become one of the largest operators in Health Care REIT’s portfolio.
“Health Care REIT has been a terrific partner,” notes Grape. “We have since done smaller, individual projects with them and intend to continue to grow the relationship.”
In March 2005, Benchmark acquired five New England assisted living properties from Athena Health Care Systems, and five freestanding Alzheimer’s communities from Amicus Healthcare (the latter named the Atrium properties). With the acquisition of these Massachusetts and Connecticut communities, Benchmark continued its growth throughout New England and expanded its services in Alzheimer’s assisted living.
Last year, the company purchased three Massachusetts communities that included The Commons in Lincoln, as well as a two-property portfolio of The Inn at Robbins Brook in Acton, and Forge Hill Senior Living in Franklin. HFF marketed the portfolio on behalf of AEW Capital Management of Boston, the seller, which bought the two properties in 2010 for $19.2 million.
Technological initiatives
With a history of strong partnerships, Benchmark has been making a name for itself as an innovator in the seniors housing industry by working to close the gap between America’s seniors and new technology.
According to the Pew Research Center, 77 percent of seniors ages 65 and older indicate they need assistance with the Internet and digital devices. With 72 percent of its traditional assisted living residents using the Internet, Benchmark is one of the first companies of its kind to provide residents with access to both equipment and personnel dedicated to assisting users in its computer labs.
As a result, residents are equipped to stay connected with friends and family. The communities’ computer labs also feature touch screens for residents with arthritis, and larger keyboards for individuals with faded vision.
“Today there are many choices for our clients, and their needs are changing,” says Grape. “We strive to stay one step ahead, seeking the ideal living experience for our residents by offering the very best in technology and advances, coupled with a passionate and committed staff.”
Split Rock, the company’s newest seniors housing community, incorporates industry-leading technology for safety management as well as for recreation. One example is Real-Time Location, which enables residents to call for assistance from anywhere within the community via portable pendants that transmit exact locations.
A wander management feature alerts caregivers if doors have been opened. This gives residents their independence, but also shows caregivers if a resident is, in fact, wandering. In addition, fixed call stations enable residents, visitors or staff to call for assistance for themselves or others.
Benchmark strives to keep all of its communities on the leading edge of senior care. For example, the company has introduced the Dining with Dignity program for the memory-impaired residents at some communities. The program includes carefully selected tableware, a menu designed to reduce distractions and provide visual choices for the residences, and a calm setting with instrumental music. Staff members receive special training to help these residents enjoy a more fulfilling mealtime experience.
Additionally, in an effort to meet new low-salt standards for seniors, Benchmark set out to find a flavorful salt substitute. When commercial alternatives proved too peppery and coarse, Benchmark collaborated with a spice blend company to create its own.
“We wanted to provide our seniors with a substitute that would provide some flavor instead of being just salt-free,” says Guy Hemond, vice president of culinary and dining experience for
the company.
Benchmark tried nine different iterations before settling on a formula using citrus, spices and herbs to mimic salinity. It launched the seasoning with a companywide recipe contest, with residents
and local celebrities as judges. The product has proven to be a big hit, especially among residents who have missed salt in their diet, and is now a staple on every dining table.
Caring for its own
In addition to improving the residential experience at its communities, Benchmark is raising the bar in its treatment of employees. The company has put considerable time, money and effort into training its associates to exceed expectations in customer service.
“We take pride in our exemplary employees and their commitment to going above and beyond for our residents and their families on a daily basis,” says Stephanie Handelson, president and chief operating officer at Benchmark. “Our employees give 100 percent to our residents, their families and each other, and they work each and every day with pride, passion and purpose.”
Handelson says it’s important to recognize those employees through a variety of initiatives including an annual awards gala and Compassionate Caregiver luncheons, which recognize exemplary services by direct-care staff. The company also has monthly community level recognition
programs, naming a Monthly Service Champion and sending Gratitude Grams to outstanding individuals.
In April 2014, the Boston Business Journal named Benchmark Senior Living to its list of the Best Places to Work in Greater Boston, which is based on confidential employee surveys.
Other recent honors include rankings on Hartford Business Journal’s Best Places to Work in Connecticut, and Boston Business Journal’s Healthiest Employers, both in 2014, and Boston Globe’s Top 100 Places to Work in 2013.
“It’s comforting to know our associates acknowledge our organization and its approach to caring for the individuals in our communities,” says Grape.
One way Benchmark has rewarded its employees is with its “One Company Fund.” Launched in early 2008, after the company’s 10-year anniversary, the fund is a resource that cares for company associates during times of extreme need. Community activities and contests, companywide-sponsored events, and individual donations keep the fund alive. So far, the program has raised more than $1 million and awarded dozens of grants to Benchmark associates and their families.
“We wanted a way to recognize and thank associates for the work they do every day, and so the One Company Fund came to life,” explains Grape. “The fund is a means to support our employees should a crisis arise.”
Seeing the big picture
Grape has witnessed a lot of changes in the seniors housing industry since the late 1990s. “The industry has matured since then, and it has become an established property class.”
There is also greater availability of market data, according to Grape. For example, NIC MAP (Market Area Profile) provides information for all the major markets in the nation, which is a giant step forward in attracting institutional capital.
The seniors housing industry has caught the attention of institutional investors to be sure. According to a report presented by AEW Capital Management at the 2013 fall conference of the National Council of Real Estate Investment Fiduciaries, seniors housing total returns surpassed apartment, retail, industrial and office returns on a one-, five- and eight-year basis. Three of the 10 largest REITs are now healthcare REITs.
Despite its positive performance, the industry needs to do a better job of providing more accreditation and certification so that there is consistency in the delivery system across the profession, says Grape. The industry also needs to be more attuned to changing customer preferences, he believes. There is also a danger of overbuilding, and affordability remains an issue, the veteran executive points out.
“In many cases, senior living properties are yesterday’s model,” says Grape, “but the outlook is positive. The current demographic growth is modest, and then it will pick up as Baby Boomers get older.”
Grape sees the industry as “a guaranteed growth market” for the rest of his career — a career in which Benchmark will undoubtedly keep pushing the boundaries.
“We can try new things and innovations to improve the quality of living for our residents,” says Grape. “We can be entrepreneurial, constantly reinventing ourselves. And most importantly, at night I can put my head on the pillow knowing what I do touches people’s lives in a very personal way.”