Former Emeritus, Brookdale executive grows his own seniors housing owner-operator business in the Southeast.
By Jeff Shaw
After more than 15 years of working in various management and executive roles at seniors housing pioneer Emeritus Senior Living — and 18 months at Brookdale following the merger of the two behemoth companies — Chris Guay decided it was time for a change.
He founded Vitality Senior Living in 2016 in the Nashville suburb of Brentwood, Tennessee. The company launched with two acquisitions in Texas, both offering assisted living and memory care. In 2018, the company merged with Traditions Senior Living, boosting its total number of communities to seven. In the three years since, that total has grown to 30 communities totaling approximately 3,000 units.
The portfolio is focused on assisted living and memory care, including several standalone memory care communities, but new developments have pushed Vitality further into the independent living and active adult space.
Seniors Housing Business spoke with Guay about what inspired him to launch his own company, his family history with active seniors and his potential solutions to the current labor shortage.
Seniors Housing Business: Walk us through your career path leading up to founding Vitality Living.
Chris Guay: I didn’t find the industry, the industry found me.
I was looking for work in physical therapy, and I liked it but didn’t love it. About a year into my first physical therapy position, the government changed the reimbursement scales and my company almost went bankrupt overnight.
I happened to have a friend who was an executive director at Emeritus. He said he thought I’d do well in seniors housing. I was fortunate — it was the mid- to late 1990s, so there weren’t a lot of people in the industry yet.
I had the opportunity to run my first building in Hendersonville, North Carolina. It was a great property with independent living and assisted living. It really let me expand my people skills and instilled in me some fundamentals of this business that I’ve tried to hold onto.
I was able to find some good mentors and gain some multi-site experience. At the time we merged with Brookdale, I was senior vice president of operations and ancillary services. In that role, I was responsible for half the company’s assets. At that time, we had just purchased a home health company and were integrating that into some of our properties.
That was a great opportunity. I got a lot of exposure. We had great leadership and really good people. A lot of the leaders who were with me at that time are out there doing great things today. Chris Hyatt is president of New Perspective; Chris Belford is president at Sinceri Senior Living; Jayne Sallerson is COO at Charter Senior Living.
I stayed with Brookdale when we merged. I wanted to see that transition go as well as possible. I was Northeast president of operations. I was there for 18 months, but knew my calling was no longer big organizations. I wanted to get out of the publicly traded world.
I always had the plan and goal to start my own business. I met some folks in 2016 that wanted to start an East Coast-based operator, and we bought two buildings. I exited that group in 2018. I brought in new partners and merged with Traditions Senior Living.
It was very synergistic. Traditions had very strong finance, development and acquisitions groups, while we had a strong operating group. We had no communities that competed geographically. All the leaders stayed in place, and we were able to combine our expertise. That relaunch happened in 2018.
We had about seven properties at that time, and now we have approximately 30. It’s a mix of acquisitions and development. We do management contracts, but we generally are in the ownership stack. We try to be involved in ownership in some way, shape or form.
SHB: With big names like Emeritus and Brookdale in your history, what made you want to launch your own owner-operator?
Guay: The reason I was so successful in my career is that I always wanted to try new things. It was the entrepreneurial drive in me. I always had that desire to go out and do it on my own as a way to scratch that itch.
I also wanted to launch a company based on the qualities I felt were important for our customers. I wanted to build my own organization.
SHB: I know your grandparents have a lot to do with your approach to senior living. Tell me a bit more about them and how they inspired you to enter the industry.
Guay: I’m pretty fortunate. I knew not only all my maternal grandparents, but three out of four great-grandmothers were involved in my life. One was even alive when my child was born.
I was always around these great aging people, and they were active and lived a spirited life. I saw aging as being fun. My great-grandmother lived to 93 years of age, and she had a dune buggy when she was 60. My grandfather, who’s still alive, taught himself to ski at 55. He lives an active life to this day. Every day he goes for a swim.
It just influenced my thought process on aging. Aging people in my life have always aged really well. It has to do with their attitude and how they lived life. I don’t think aging is something where you have to slow down. You can still enjoy life to the fullest.
Care at multiple levels
SHB: How is Vitality’s portfolio split along the continuum of care?
Guay: It used to be heavier on the assisted living and memory care side, but some of our development has brought in more independent living. Currently, about two-thirds of our portfolio is assisted living and memory care, and the rest is a combination of independent living and active adult. We have two pretty good-sized active adult projects.
SHB: What brought you into the active adult space?
Guay: We founded the company on being opportunistic, trying to meet the market. We’ve expanded that thought process to the people we serve. There’s this population between the age of 70 and into their 80s that is still very active and is looking for a lifestyle change.
We think there’s this customer base, and we’ve been looking at the space for a couple of years. There’s a lot of interest because everyone sees if we can get people when they’re younger, that helps the whole process.
If you look at the nature of how assisted living came about, there were only nursing homes at that time. There were people that didn’t need that, but it was their only choice. If you look at independent living, it’s really assisted living light.
There’s a group of folks who are still lifestyle-based. If you look at real estate values, a lot of people have a lot of equity in their homes. But where do they go? They can cash out and pick something that’s less responsibility and maximize the value of their asset while the market is really good.
SHB: From a customer price point, is Vitality Living high-end or middle market? How are inflationary pressures impacting rents?
Guay: We are mid- to high-end and rates vary depending on the market. Like our peers, labor and inflation pressures are causing us to be more aggressive with raising rates. Across the portfolio we are increasing rates faster than we have in previous years.
SHB: I notice Vitality owns a few standalone memory care communities, which are a very divisive topic in the industry. What caused you to operate those types of properties?
Guay: If you’re not comfortable with the business, it’s very difficult. The acuity levels, the amount of time and energy to do it right — it’s a lot harder than independent living.
But I believe there’s still a place for it. The dementia stats are not slowing down. It’s still one of the critical diseases that our aging population faces.
We have a lot of experience in memory care. Kelly Lindstrom, my chief operation officer, created programs for Emeritus. Rachel Kohl, my vice president of engagement, ran memory care divisions for companies like Emeritus and JEA. My team is very comfortable in that space, but it’s a space you have to be prepared for. The fundamentals are very different than a continuum-of-care community.
SHB: Does Vitality have an ownership stake in its properties, or is it a pure-play operator?
Guay: The stake varies depending on the deal, but we believe first and foremost there’s value in the real estate and the business combined. If we as the operator unlock value in the business, we want to be part of that value.
Our partners are more confident when we have our own capital put into deals. We have skin in the game. That’s important in the partnership. For us, a management fee doesn’t align interests. When we come in and are part of the partnership, we’re all aligned. If we win, they win.
SHB: We hear frequently that owners prefer mid-sized, regional operators. What advantage does filling that role bring to your company?
Guay: It was by design. We wanted to be regional. I wanted to make sure that we stay high-touch.
For me to operate a single assisted living community in Idaho where I don’t have regional support, it’s hard to get there. It doesn’t make sense.
Someone from my team can get to any of our properties in a couple of hours. We also know our markets well because of that proximity.
I’ve done the national play. It can be done. But for the type of company we want to have from a culture standpoint, being regional lets us be nimble. That’s very important in this business.
SHB: I notice you operate under a variety of brands rather than just using Vitality Living for all your communities. Why is that?
Guay: Some of it was the way we launched the company. We acquired some communities that had great reputations. If a building is known in a market, and the brand is known to be good, why confuse the market just to slap our name on it?
As we’re growing and undertake more developments, we plan to put the Vitality name on those newly developed buildings.
Fighting labor headwinds
SHB: You also mention that you focus on cultivating talent within the industry. With labor being such a hot topic right now, what are some of the ways you’re keeping staffed up?
Guay: We’re trying to approach this in segments. The first is to make sure our wages are fair. Our competitive market is no longer just other seniors housing competitors. More than ever we now compete against casual dining, hospitality and retailers. So, offering a competitive wage is a necessity.
At Vitality, we have focused on having a wage scale in place that rewards the employees who have been with us, that have tenure, and then pays people fairly for how much experience they have. That means if I am a new grad with no experience as a caregiver, I shouldn’t make as much as someone who’s got several years of experience.
It’s a simple thing, but you’d be surprised how many communities don’t have proper wage scales in place, and/or don’t really understand how to effectively compensate your current people fairly while adjusting market rates accordingly. It should be no different than how we adjust rental rates with occupancy.
The second focus for Vitality is on benefits that matter to our team members.
I’m not convinced that the traditional paid time off, 401(k) plan and health insurance benefits are going to attract the people we need. We’ve got to expand and try to create benefits that are also more attractive to an expanded audience.
As examples, benefits like daily pay or “InstaPay” — which allows employees to access their pay immediately after a shift — and creating more flexibility in scheduling will help attract people. We are experimenting with those pieces. We use a company called FinFit, a financial wellness program that gives financial support and education to employees. This is going to be a work in progress as we start to retool what benefits really matter to our people.
Lastly, how do we message and brand the differentiators that we have in the senior living business? When our teams deliver great care and service, we have a positive impact on the lives of those we serve. That is powerful and meaningful. We all talk about it, but I think as an industry we need to do a better job letting those outside our industry see this value.
The younger generation wants to make a difference. We have got to get better at showing them that senior living can be a rewarding career.
We do not have the labor headwinds figured out, but if we focus on those three key points we will make progress in attracting talent to our industry.
SHB: What’s something people in the industry would be surprised to learn about you?
Guay: I have a passion for bourbon. As a hobby, I am a partner in a small, local distillery called Wheeler’s Raid in Nolensville, Tennessee (about 16 miles southeast of Nashville).