Company Profile: Thrive Senior Living Strives to Be Different

By Jeff Shaw

When Jeramy Ragsdale founded Thrive Senior Living in 2008, it was not his intent to challenge the industry to redefine itself.

At the time, he was a residential home developer and knew that seniors housing was a niche property type for which he could find financing. He built his first assisted living and memory care community in the company’s hometown of Atlanta. He immediately fell in love with the business and its ability to positively impact people.

By 2016, the company operated eight communities with another 12 under contract or under construction. Thrive grew during the early years through joint-venture investments. As the business matured, it expanded to work with institutional capital partners.  It was about this time in that Ragsdale began adding key team members with the goal of making Thrive an operator in addition to being a developer. 

™ Les Strech, president, had worked closely with Thrive in a consulting role since 2015. His previous experience included serving as COO for a Texas-based freestanding memory care operator. Strech was hired first, helping to choose the rest of the leadership team.

 Sebby Kannukkaden, chief financial officer, came into senior living finance and operations through a turnaround of Assisted Living Concepts and its rebranding to Enlivant under Jack Callison. He was previously with a private equity firm that was also an investor in Sunrise Senior Living developments through the late 1990s and early 2000s.  

 Nicole Moberg, chief sales officer, was a veteran of Disney’s marketing department, a 10-year university professor who helped establish the professional sales program at University of Central Florida, and most recently was chief sales officer with Seattle-based Millennium Health.

Development continued at a fast pace under the new leadership team. Thrive has now built 34 communities, totaling 3,770 units, and currently operates 15 of those properties. There are two more under construction. The company considers itself a luxury brand, serving a private-pay, high-end clientele. 

The company’s properties offer a mix of independent living, assisted living and memory care.

One common thread among the new leadership team was that all had, at some point, worked in another industry, but were drawn to seniors housing by genuine curiosity and fascination.

“The new leadership team sat around a table in early 2017 and started with a clean slate,” recalls Strech. “We wondered: What are the better questions we can be asking ourselves in this industry?”

The list of questions soon became long.

“Is it okay to lock people away just because they have memory issues? What does an 85-year-old want that a 35-year-old doesn’t? How can we fracture the mercenary culture in the industry? It seemed like a lot of team members would run down the street for a 25-cent hourly pay increase.“

More importantly, Strech says, is that the industry as a whole elevates the voice of the team members in the communities that do the day-to-day work. The best answers are always informed by the people closest to the work. 

“If you view it from a pure business standpoint, this industry is still in its infancy relative to others,” says Kannukkaden. “The iPhone was developed less than 15 years ago and changed the penetration rates for mobile devices. Is there something out there that can change this industry?”

Finding a unique voice

Thrive tries to stand out from the crowd both through its programming and by how the services are communicated to the residents.

A rallying cry at the company is that “words create worlds.” So respite visits are “staycations.” Executive directors are presidents. Employees are called team members, not staff. “Staff is a type of infection,” says Moberg.

“We believe we took the blueprint for senior living and threw it in the trash can. That started with the words we use,” says Moberg. “A lot of the language in seniors housing is still so clinical. Words matter.”

Terms like “adult day care” can even be insulting, notes Strech. “That’s the most pejorative term in the world — that’s for infants.”

Perhaps the company’s most controversial opinion on how it presents itself: Care should not be the primary concern. Instead, the primary focus should be on building meaningful relationships with residents. 

“The senior living industry birthed out of the hospital mentality and clinical safety has consistently trumped resident choice,” says Kannukkaden.

“We think the target of focusing on great care is a bar that has been too low for too long,” says Strech. “It’s a mindset that slides quickly into treating people as objects in need of care rather than people  who still have goals regardless of age or ability. Great care is always a byproduct of a meaningful relationship.”

The company calls the operational philosophy “Safety Third.”

“For each individual resident we prioritize their desires,” says Strech. “First, what does the resident want to do? Second, how can we make that happen? Third, how can we make it happen safely?  Safety Third is an anchor of this culture of inclusion. It allows the desires of the resident to trump the desires of their family and our team.”

Thrive has seen this focus take root by a carefully selecting multi-faceted leaders for each community.  

“We believe the industry is moving toward more multi-
generational living environments and the industry has to increase talent density in key leadership roles,” says Strech. “As we looked at our business with clean eyes in 2017, we decided to stop looking for managers to run assisted living communities and started carefully selecting people to lead multi-
million dollar businesses.

“We spent a lot of time with the founders of Chick-fil-A to ask, ‘How have you scaled without losing the things that made you who you were in the beginning?’”

Growing with principle

Thrive thinks of the customer experience the way Apple approaches its user experience. Internally, the user experience is made up of the hardware (the physical buildings) and the software (the people and the operating philosophy that run them).

The company much prefers to develop its own properties with joint-venture financial partners, and Kannukkaden predicts “we will be developing more.” Financial partners are a mix of private equity funds and high-net-worth individuals. Examples include Harrison Street, AIG and Drake Real Estate Partners. There are currently Thrive communities operating in nine states.

“We carefully select markets that are under-penetrated, but also have unique demand characteristics. We identify areas where we can cluster two or three communities,” says Kannukkaden. “There are several major markets we’re looking at as a company, where we forecast significant tailwinds over the next five to 10 years.”

Current target markets are throughout the West Coast and in the Washington, D.C. metro area, where Thrive just opened its fifth community.

But it’s not all about ground-up development. Thrive has a separate brand launched last year called “The Social.” These are older properties where Thrive takes over operations and applies its “software” to the community. 

“There’s going to be a large market in the future for repositioning older communities to help them stay relevant. It’s going to be harder and harder as more innovative models of senior living come to market,” says Kannukkaden. “It’s a huge challenge, but it’s something we specifically looked at and said, ‘We can help here.’”

For these projects, the company seeks properties that include between 100 and 200 units, an owner that is open to renovations and rebranding, and non-
segregated physical environments (no freestanding memory care). 

Thrive also insists that the redesign be resident-led. The company brings in architects, interior design teams and owners to meet with resident focus groups at the outset of all renovations. In several cases, Strech notes that these meetings prevented major poor choices. 

Residents at one Social property noted that, although they wanted outdoor living space added, a planned front patio area would be scorched in sunlight all day and unusable. The architects were able to move the patio to a better-shaded area in the back.

“You’d be amazed at the ideas we get from the residents,” says Strech. “We’re meeting with them as if they’re the owners.”

Thrive has already opened two properties under The Social brand — The Social at Vinings in Atlanta and The Social at Cotswold in Charlotte, North Carolina — and another is currently in the renovation planning stages in southwest Georgia. Although generally rents are still above market rates, Thrive believes The Social is a great way to give residents the company’s high-end programming at a more affordable price.

Thrive’s principals believe that, in addition to redevelopment of older properties, the future of seniors housing lies in making it part of larger mixed-use projects.

“Everything on our development board today is some form of mixed-use development with a senior living component,” says Strech. “There is a stigma around traditional senior living that has led many to just stay home.  Our future developments will create multigenerational options to alleviate  that stigma.”

Find the right fit

Strech theorizes that there are currently three types of seniors housing operators: the mom-and-pop management firms that lack strong management systems; “chaos” operators that grow quickly but don’t adapt to their new size; and rigid operators where strict systems prevent advancement and free thinking. 

“Thrive’s focus is to grow while veering away from the pitfalls of those existing models,” says Strech. The company has defined it as an “intrepreneurial” system (a play on the word “entrepreneur”) where team members are selected based on cultural fit, then empowered to do what they believe is best.

The executive team’s deep
experience in other industries has seen that cultural fit and long-term leadership success is best prioritized over a specific professional industry background. Moberg notes that “alignment with our beliefs and our entrepreneurial culture” is more important than seniors housing experience.

“We look for strong leadership results over extended periods of time regardless of the industry,” says Kannukkaden. “We have presidents now who have successfully operated franchises or large gyms who deeply aligned with our operating model. They came in and have taken properties to full occupancy while creating places where people love to work. We want people who are mission-oriented and great business leaders.”

Thrive puts particular emphasis on its sales team, seeking what Moberg calls “hunters with a heart.” 

“Over the years there’s been a build-it-and-they-will-come mentality. That’s not going to work,” says Moberg. “You need a team member who can connect with people. The potential resident shouldn’t have to go somewhere else to find out about VA (Veterans Administration) benefits, or to go find a real estate agent. We can do all that for them.”

Thrive is building its future workforce pipeline with it’s Intermentorship Program. “Internship fell really flat for our desired outcome,” says Moberg. “With this bi-annual event, we build successful intrepreneurial leaders.”

The three-day free event is held in Atlanta. Jobseekers go through several hours of classroom study with topics such as “how to make a $50 million dollar investment” and “Leadership: addressing thinking before addressing action.” The “intermentors” then shadow people in a variety of roles in the community and learn the basics of seniors housing. 

The program drew several junior and senior college students, who “never would have considered senior living for a career,” says Moberg.

“We saw incredible talent that filled the room from that. We’re going to keep it going,” adds Moberg. “It helped the participants determine if senior living was a career path they wanted to follow. This event was for sales leadership and operations, but it’s something we can duplicate for other roles.”

At the end of the day, everything Thrive tries to do — from its architecture to its programs to its hiring — boils down to one concept:  “People are worth knowing as an individual,” says Strech. “People, including residents, guests and team members, want to be cared about as an individual, not just be cared for.”