There are two vaccines for COVID-19 awaiting approval by the U.S. Food and Drug Administration, signaling that there is an end to the pandemic on the distant horizon. However, the impact of the outbreak on the seniors housing industry may be long-lasting.
A group of the industry’s top brass recently suggested that many of the changes made to adapt to the virus may in fact be permanent, and operators should prepare for this.
The comments came during a panel titled “The Power Panel: CEOs Discuss the State of the Industry” at France Media’s InterFace Seniors Housing Southeast conference, which was held virtually.
Panelists included moderator Allen McMurtry, senior vice president of the seniors housing and investment sales group, Grandbridge Real Estate Capital; Robb Chapin, CEO of Bridge Investment Group; Jeff Sands, managing principal and general counsel, HJ Sims; Eric Mendelsohn, president and CEO, National Health Investors; Chris Hollister, co-founder and vice chair, Pegasus Senior Living; and Chris Guay, founder and CEO, Vitality Living.
“With this pandemic, we really don’t have a playbook. Information has become that important,” said McMurtry, addressing the panelists. “With the experience on this panel, we hope to give information on how to navigate this stuff. We’ve seen a lot of changes because of the pandemic. Which do you think are permanent?”
Hollister suggested that continued use of virtual tours and telemedicine will be “obvious.” Beyond that, the pandemic has changed the entire way the industry views itself, he added.
“We’re not just taking care of people physically, we’re taking care of them spiritually and emotionally, handling their mental health. We’re doing some things with telemedicine online counseling that are really neat. We learned that we provide a valuable service. Our residents might not be able to do activities, but it’s even lonelier at home.”
Hollister noted that communication and collaboration between companies, even competitors, has improved as “we banded together and tried to learn from each other.” Guay agreed.
“It’s been really helpful to have 12 or so partners across the country all discussing what’s going on. When we all did our 2020 budgets at the end of last year none of us budgeted for this. So it’s been a lot of adjusting on the fly.”
Guay expects that heightened screening of employees and visitors will stay in place, hopefully reducing the impact of other infections such as the flu. He also believes operators have now seen the light when it comes to a strong social media and digital marketing presence. Vitality Living saw its digital impressions skyrocket from approximately 5,000 per month to more than 500,000 in the eight months of the pandemic to date, according to Guay.
“We can learn how we use that medium more effectively and let people see the true experience of what’s going on in our communities.”
Unfortunately, something else may also stick around post-pandemic: Heightened expenses for employee pay, personal protective equipment (PPE) and isolating sick residents.
“PPE is going to be a line item on budgets going forward, as well as storage of those items,” said Mendelsohn. “It’s a design flaw in many of our buildings — we don’t have a lot of storage. That’s why you may now see little barns in the back from Home Depot. All of that has to be stored somewhere, accounted for and ready for anytime we go in lockdown. That’s going to have implications in future budgets.”
This has made underwriting loans in the seniors housing more difficult as well, noted Sands.
“From a financier’s point of view, the big question for me is: Are those expenses built into the base? That is to say, will operators be able to charge, to increase their rents, to continue to keep the same profit margins at the projects? That will be market to market and operator to operator, but something we’ll be looking at — the permanent impact on the expense sheet.”
All panel sessions from InterFace Seniors Southeast are available to watch through Dec. 31. Registration is $275. Click here to register or view the portal if you have already registered.
— Jeff Shaw