Oakmont Senior Living finds success — and a 97 percent occupancy rate — with a forward-thinking approach.
By Jeff Shaw
Oakmont Senior Living frequently fields a question from industry experts that centers on the company’s portfolio-wide occupancy rate of 97 percent: “How do you do it?”
Not only does that near-perfect occupancy rate stretch across 31 luxury communities and 2,824 units, but Matt Stevenson, the company’s senior vice president of operations, says it’s often reached within six months of opening a new community.
“We manage occupancy risk very well,” says Stevenson. “When it comes to occupancy, we can’t afford to be reactive. We’re a very forward-looking company. I don’t know that we even have a rear-view mirror.”
By looking ahead, the company is constantly anticipating and solving problems before they become larger issues, rather than reacting to problems as they spring up.
“We’re always looking at occupancy risk by measuring our acuity risk,” Stevenson further explains. “We follow the financial markets for market risk. We’re looking at resident satisfaction scores regularly. We’re involved on the legislative landscape to manage legislative risk. We’re managing the risk of supply and demand on potential absorption.”
Based in Windsor (north of San Francisco and west of Sacramento), Oakmont’s portfolio almost exclusively resides within California. The only two locations outside the state are in Las Vegas. The portfolio is approximately 71 percent assisted living and 29 percent memory care, and is growing rapidly. Oakmont currently has 19 communities in various stages of development.
One way that Oakmont keeps such control of its communities is to intentionally build them small — an average of 85 units per community.
“That allows us to be operationally efficient and really responsive to residents and family members,” says Stevenson. “Our teams aren’t carrying a load so heavy that they lose that individual and personal touch. We think we found the perfect size at that mark.”
Built on family values
The Gallaher Family, a longtime real estate developer that began building seniors housing in the 1990s, develops all Oakmont communities. In fact, the two Oakmont communities in Las Vegas are Gallaher-developed properties, with Oakmont replacing the previous operator in recent years.
REIT giants Welltower and HCP own some of the properties operated by Oakmont on a contract basis, and Oakmont plans to expand the relationship with HCP, says Crystal Robinson, Oakmont’s chief marketing officer.
Oakmont Management Group was founded in 2012 to be the sole operator of the luxury communities. Most of the communities were also built by yet another affiliate, Oakmont Senior Living Construction.
Both Robinson and Courtney Siegel, the company’s CEO, were there for the founding of Oakmont Management Group. Stevenson, a Belmont Village Senior Living alumnus, was added in 2018.
“Oakmont Senior Living Construction and Oakmont Management Group are two separate entities, and we have an exclusive relationship with one another,” explains Siegel. “Our partnership begins at the time a market analysis is completed for a potential new site, then extends through our lease-up and the day-to-day operations.
“Oakmont Senior Living Construction does not build for any other operator in the space, and Oakmont Management Group does not operate any communities that were not originally built by OSL Construction. Oakmont Management Group also has an ongoing partnership with two healthcare REITs.”
With such a sturdy structure for development, ownership and operations, Oakmont’s family of companies has never felt the need to grow through acquisition. Oakmont grew the portfolio from the ground up.
“Acquisitions are not even on our radar,” says Stevenson. “With the velocity we’ll be building the next two years of 19 new communities, we can’t be distracted by anything besides operating our stabilized portfolio, and opening and operating our developments.”
Additionally, all future plans for Oakmont developments have the company staying in California.
“We love that we know the markets so well. We know what to expect,” says Robinson. “We work with all the planning departments, the permits on the construction side, even the marketing world. We just understand California.”
California is also a fit because of the high demand for high-end product, which is Oakmont’s focus, adds Siegel. Portfolio-wide, the average rent is around $6,500 per month.
An additional benefit is that the regional team rarely has a long commute, which helps with retention and job satisfaction. Regional teams are tasked with providing strategic guidance, coaching, training and support to hit occupancy goals.
“Keeping our portfolio in a concentrated geographic region means that the support team is a maximum of an hour away from being able to get to, and support, any of our communities,” says Siegel. “This also allows for the best possible quality of life for our regional team members, who travel 70 to 100 percent of the time supporting our communities.”
Occupancy rates have been slipping across the seniors housing industry in recent years due to oversupply — falling from a national average of 90.2 percent in 2014 to 88.1 percent in first-quarter 2019, according to NIC. However, Siegel believes Oakmont’s processes help insulate the company from that problem.
“We have not experienced occupancy challenges. One area of focus is the market study process. We are deliberate about the markets we choose to enter. Oakmont Senior Living Construction will not develop a project that Oakmont Management Group hasn’t signed off on, and together we turn down just as many sites as we sign off on.”
Being a high-end product — Stevenson notes that the company actually seeks to charge some of the highest rents in each market — means that Oakmont really has to bring its “A Game” when it comes to its luxury offerings.
Everything flows from the family of companies and how they work together, particularly when it relates to the physical plant of each community, according to Stevenson.
“It’s all in-house construction, so we have our own general contractors, our own in-house design team, an in-house landscaping team. Having that much control in the process really allows us to build incredible buildings with such attention to detail. No area is neglected.”
Stevenson also believes Oakmont has a leg up on the labor front. He contends that the industry has been approaching the labor shortage issue through the wrong lens.
“There’s a real misconception that the primary problem in the industry is applicant flow. The problem isn’t applicant flow, it’s better managing the hiring process, the onboarding experience and the employee relations once the employee is a member of the Oakmont family.”
The company recently invested in an applicant tracking system that features “a focus on urgency, a refined interview process, a quicker hire and a better experience for that candidate,” notes Stevenson.
Siegel adds that Oakmont requires three to four weeks of staff training before a new community opens.
“We look at recruiting the same way we look at sales; it’s the same philosophy,” notes Robinson. “How we treat our future residents, we do the same for our future team members. We’re all about having a great experience and great first impression and taking care of our people.”
On the service front, Oakmont once again tries to be at the top of the luxury list. Typical amenities include bar/lounge areas, movie theaters, outdoor casitas and a heavy focus on dining.
In 2013, Oakmont hired Rina Younan as vice president of culinary services. The chef has earned a strong reputation by having appeared on three separate competitive shows on Food Network — Chef Wanted with Anne Burrell, Cutthroat Kitchen and Beat Bobby Flay — winning all three. In fact, she was the first female chef to successfully defeat Bobby Flay on his show.
“We want to be the best in each market we go into,” says Robinson. “We provide a luxury community, and the food is a big piece of what we do. About 90 percent of what we make is made from scratch. We change our menus seasonally.”
Younan adds an upscale restaurant and celebrity chef flair to the dining program. For example, the spring menus featured “Chef Rina’s Sesame Crusted Falafel Wrap” with fresh vegetables and tahini aioli on lavash flatbread.
Although superior amenities and quality construction are clearly important factors to attract and retain residents, Stevenson credits Oakmont’s creative
problem-solving approach for Oakmont’s stellar 97 percent occupancy rate. Resident and family satisfaction rates are monitored like a hawk, as well as acuity levels, to properly fix and/or adjust for future resident turnover.
“Many operators manage occupancy in a very reactive way,” says Stevenson. “They decide to invest resources, manpower, extra dollars into a building when occupancy becomes a problem. While they’re making the decision on what resources to invest in the problem, occupancy continues to decline and then it takes a while to crawl out of the hole that’s been created. We maintain high occupancy because we refuse to be reactive.”
Because of the company’s strict site selection requirements, strong research capabilities, solid reputation and emphasis on planning, most Oakmont communities are more than 75 percent preleased before opening, notes Siegel.
This is why the company continues to develop at a feverish pace, according to Robinson.
“Our development pipeline and our growth are something that we’re really excited about. During the period 2018 to 2020, we have 19 new communities opening. We’ve been anticipating and preparing for this growth. Over the last 18 months we’ve built the infrastructure to support it.”
“I call it Oakmont 2.0 because I got to open the first 20 locations, and now we get to work on this second wave,” says Robinson, reflecting on the past and the future.
“There’s a lot of growth in response to the demand, and we are excited to continue meeting the needs of seniors.”