Q&A with Promatura Group’s Wylde

by Jeff Shaw

Margaret Wylde, CEO of seniors housing consulting firm ProMatura Group, will be keynote speaker at the InterFace Seniors Housing Southeast conference in Atlanta on Aug. 27. Seniors Housing Business sat down with Wylde to ask some questions about the state of the senior living sector of commercial real estate.

Seniors Housing Business: In an interview with our reporter Jane Adler near the beginning of the year, you predicted a rise in the popularity of niche communities that allow residents to live somewhere with people of similar interests. Are you seeing this prediction coming true? Why or why not?

Margaret Wylde: As of now, the age-qualified, service-enriched sector is predominantly focused on Alzheimer’s care and memory care. Positioning as a niche community is likely to be affiliated more with an independent living community than assisted living or memory care. And, we are seeing more independent living communities unbundling the service package. So, saying that, we are seeing a number of different developers entering the market with alternative products.

First off, there are a number of 55+ apartment residences and 55+ active lifestyle communities under development or in planning. The average age of entry has been around 70 years of age for apartment living and late 50s to early 60s for active lifestyle.

If the apartment community is in a great location where there are many basic amenities and services nearby, the individual moving in may be capable of living for well more than a decade and will likely be able to delay or avoid moving to a community where they are required to purchase bundled services. Thus, their money lasts longer and they stay in control longer. We are aware of more than one portfolio of these products in planning.

We are seeing more communities being tied with university programs (on, close to, or several minutes’ drive from campus). Their niche, so to speak, is the university affiliation.

There are a few companies that have strong music-oriented programs or relationships with schools of music, one or two with art, a handful now that are LGBT, and — although not part of any database — there are cooperatives or variations thereof.

We have seen a few 55+ communities being planned with an assisted living and memory care residence as part of the campus. The healthcare oriented communities are designed to blend with the homes and/or multifamily residences in the community. The 55+ community typically creates the residential concept that fits with the location, culture and traditions of the area. Some are focusing on ranch life, some focusing on being walkable throughout the community, some focus on healthy living, some hiking and small town orientation, another blending to be close to a quaint community and a sense of the extension of that small quaint community and agrarian lifestyle.

We are seeing master-planned communities (for all ages that include schools, medical services, employment opportunities and residences in the plan) beginning to include neighborhoods of 55+ age-qualified housing, and full CCRCs and/or variations of service-enriched housing included within those communities.

Two of these communities that are well underway with all of these components are Rancho Mission Viejo in Orange County, Calif., and Daybreak just south of Salt Lake City. A third that has recently begun sales for the 55+ neighborhood is Verrado, west of Phoenix. And there are a few large communities being developed in Florida, two in Orlando and one in Jacksonville, that are focused on healthy living and immediate access to healthcare. The two in Orlando are built where there are large, first-class hospitals nearby.

SHB: You were the keynote speaker at the InterFace Seniors Housing West conference in February. During your address, you suggested amenities and the quality of the real estate are great, but that operators should focus more on service as a selling point. Do you think this continues to be a common misstep among operators?

Wylde: Let me clarify what I meant by that. We have spent decades conducting quality improvement (satisfaction surveys) and analyzing what has the greatest impact on satisfaction as well as what has the greatest impact on the success (high occupancies and high rates) of communities. We are convinced that those communities that truly excel are those that have great management at the community level, consistent quality customer service, educated employees and the customer as their central focus.

What is most important is the how an individual feels living in the community. They need to feel like they belong, that they are among good friends, that they are in control, and that they are leading their lifestyle. They need to have options for what they may want to do with their days — but it should be on their terms. They may need care, but it is how they live each day that determines their satisfaction.

When I am using the term “service” I am referring to “customer service.” Putting the customer first and helping the customer build their life in this new residence. People may need some help, but that is not the life they are seeking. They are not looking for service, they are looking for their normal lifestyle, their normal routine, and a few good friends to spend a little time with.

If they need service they want it when they need it, and then they want to get on with their day — the type of day that they like to have. For some, it will be participating in group-oriented programs and events. For others, it is tidying their residence, watching a favorite program on TV, reading a book, talking on the phone with family and just doing their thing.

SHB: What are some other common mistakes you see seniors housing operators make?

Wylde: First, I accept the fact that I am the nag of the industry. Second, I believe our professional, products and services continue to improve and are quite impressive most of the time. I also believe, that with a bit more attention to what we do, what we say and how we help people feel at home in the communities that we can ensure our communities look like, feel like and really are better alternatives than the customer’s home because we offer a better future and a better place to live well.

So, going back to the nag of the industry part and common mistakes we are making: The first mistake is always using what’s being done elsewhere as the template for what you should build. By doing this we continue to commoditize the industry and continue to compete on features and price.

The same type of community does not appeal to everyone. One-upping another community with another amenity does not mean that this amenity is going to attract any more customers. Being new might, but having more amenities may just drive up the price.

There are only a few companies that invest in and take the time (eight to 10 weeks) to do the right research to learn who their prospective customers are, what they want and how much they are willing to pay for what they want. When you do that you accomplish many things.

First, you gain buy-in from the prospects because they believe they were a part of creating the community. More importantly, though, you find out what the customer wants enough to spend their money on and will buy and what they won’t buy because it drives up the cost too much.

Not too long ago, on a project we were working on in Canada, all of the research participants thought they could not afford to live in a community that had a pub. But, through the research process we learned what they wanted enough to pay for, and what they didn’t want.

In the end the package of amenities really fit what they wanted. Certainly they didn’t have the full six-pack of amenities like other communities, but they had their pub and a few other areas that made them happy. The residents had the sense that the price was fair and that they were getting value for their money. Designing, sizing, programming and building the community to the market rather than trying to find the market for the community has a greater probability of success.

Another mistake is that we are not employing individuals who are good at sales. I’m not talking about hustlers, but people who really understand that you have to know the person before you can find the benefits for her or him and that you have to be ready to build a lifelong friendship with someone in order to achieve a sale.

Through the hundreds of sales assessments we have completed, it is rare for us to find a person who really knows and understands this fundamental. Assessment after assessment we see the sales counselor take the prospect on a tour within a few moments of meeting her/him and launching into a non-stop harangue about the community. Few pause to take a breath, and if they do happen to ask a question, they do not listen to the response or use the information to change what they say or do. One tour fits all.

Not that I’m finished with my list, but the last area I’ll mention where we have opportunity for improvement is in helping new customers become part of the community.

Our once-a-month newcomer’s lunches just don’t make it. Several years ago we worked with one company, Americare, to develop a customer service program that focused on the customer. They carefully ingrained the program into their culture, and to this day they are true to the practices that define their customer service program. One of the new practices is when a new resident moves in, a small group of employees visit him/her in the apartment and deliver a welcoming present, a lap quilt. This gesture sets the tone and says “welcome to the family.”

SHB: Your company, ProMatura Group, did a study for ASHA (American Seniors Housing Association) that showed feeling at home was the most important factor for a resident choosing a seniors housing community. What do you hope is the long-term impact of that discovery?

Wylde: My hope is that our communities and the great variety of our products will be looked at as new homes for your advanced years where you have opportunities for living the life you want to live. I want people to look at our communities as a new beginning, where you have a better, brighter future than you would if you continued to stay in your home.

SHB: ProMatura has worked with clients all over the world, including China, Japan, Mexico, Canada, Central America and Europe. What are some interesting differences you see between the U.S. and other countries when it comes to seniors housing?

Wylde: Many of the countries we have worked in have product that is different than the U.S., particularly in relationship to the architectural style. Many seem much more institutional, and individual residences are smaller.

Most residences in Canada and other countries only have kitchenettes or small kitchens on a single wall of the living area — even in communities where they do not have meal services. In the U.K. and Spain, the layouts of many of the apartments are divided into smaller rooms, many with a singular long hallway with rooms branching off of them. Again, kitchens are not like those in the U.S.

In Mexico, they really do not have a professional assisted living product yet. Belmont has a new product in Mexico City and 180 has done a few. The Catholic Church has sponsored some in larger cities. These properties are typically full and are comfortable, although many that I have seen do not have ensuite bathrooms.

Having visited many of the converted homes that are serving as assisted living residences, most are passable, some sort of nice, and the remainder are horrible. The consumers we have completed research with have the same basic desires as those in the U.S.

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