The nonprofit continues to leverage acquisitions, affiliations, technology and philanthropy to expand its seniors housing and aging services footprint across the country.
When it comes to business names, Transforming Age aptly and succinctly describes the purpose of the nonprofit organization based in Bellevue, Washington.
Sure, the nonprofit operates 75 market rate and affordable seniors housing properties as well as 13 active adult assets in a handful of Northwest, West and Midwest markets. But housing is merely one part of its broader mission to improve the lives of older adults through community services, technology, philanthropy and partnerships.
Those ideals are an outgrowth of the goals of the organization when it was founded in 1956 as Presbyterian Ministries, which later became Presbyterian Retirement Communities Northwest and finally was renamed Transforming Age in 2016. From its earliest days, the company was committed to housing seniors across the age, demographic and economic spectrum. Over its first 55 years of existence, the organization’s main focus was operating a few properties in the Northwest.
But during the last decade, Transforming Age has built a multifaceted, shared-services network in which 3,000 team members serve some 125,000 seniors in an expanding national footprint through acquisitions and affiliations with like-minded groups. Shared services include human resources, compliance, finance, marketing, technology, and real estate development, says Torsten Hirche, president and CEO of the organization.
Transforming Age’s revenues also have grown. In fiscal year (FY) 2020, which ended Sept. 30, 2021, the seniors housing firm reported revenues of nearly $87 million, according to its most recent Form 990 filing with the Internal Revenue Service. That figure was up 95 percent from $44.5 million in FY 2014. All told, Transforming Age and its affiliate network generate about $300 million in annual revenues, says Hirche.
“We’re very much focused on transforming the perception of age and helping people age more successfully so that someone doesn’t have to make that last-minute phone call asking, ‘What do I do with my mom?’” says Hirche. “Our goal is to touch millions of people throughout the aging journey. You don’t have to be in one of our communities or programs, per se.”
But does Transforming Age’s focus on providing multiple services to seniors hurt its ability to excel in any one area? Not according to Hirche. He compares the strategy to that of health systems, which are integrating hospitals, clinics, rehab, radiology, pharmacy and other service lines to be able to address the specific needs of each patient.
“We recognize that this is very different from a one-size-fits-all approach,” he says. “But we believe the future lies in a customer-centric ecosystem of aging services solutions to help people live their best lives.”
Growing Opportunity
Given that researcher Oxford Economics forecasts that people age 75 and older in the U.S. will account for 12.5 percent of the population in 2046, up from 7 percent at the end of 2021, Transforming Age will have plenty of opportunity to execute its strategy.
A sluggish pace of seniors housing development will require investors to plug a supply gap of 564,000 additional units by 2030, which equates to some $275 billion in new investment as absorption continues to
rebound from the pandemic, according to a report issued in June by NIC MAP Vision, the market analytics data arm of the National Investment Center for Seniors Housing & Care. That supply gap could balloon to $1 trillion by 2050 given the current construction trajectory, NIC projects.
While increased operational costs continue to plague the seniors housing industry, Hirche foresees more investment in the sector. Liquidity has increased following the retreat in interest rates, he points out. And beyond housing, he anticipates growing demand for more broad-based services such as in-home health care, hospice care, adult care, and fitness and meal programs, all of which Transforming Age’s network provides.
“The demand clearly is there on the housing side, but that doesn’t take into account the home and community-based services that 90-plus percent of aging seniors are going to need at some point in their lives,” states Hirche. “The demographic trends are obviously in our favor.”
Peer Partners
Affiliations with other nonprofits to share and expand services and offerings has propelled Transforming Age’s recent growth. Under the arrangements, companies typically become a sister organization or subsidiary of Transforming Age via a governance transition without any financial consideration up front, explains Hirche. Affiliations especially benefit
small management teams and boards that can instantly achieve economies of scale and greater capabilities, including attracting highly skilled talent, he adds.
“Consolidation in our industry is very real because cost pressures and regulatory pressures are getting worse,” he explains. “Just the technology that’s needed to operate in our industry today and tomorrow requires a lot of investment. So scale matters and ‘stronger together’ is our mantra.”
When Hirche joined Transforming Age in 2014, the company owned three properties, he notes. Its most recent development at the time, Cascade Tower, a high-rise in a continuing care retirement community (CCRC) known as Skyline in Seattle’s First Hill neighborhood, opened in 2009.
A year after Hirche arrived, Transforming Age officially launched its affiliation strategy by completing a deal with Fred Lind Manor, an 82-unit independent and assisted living community in Seattle’s Capitol Hill neighborhood. In operation since 1942, the property had survived several recessions, growing competition and demographic changes.
But the aging Fred Lind Manor board thought that it had done all it could and needed a strong management and real estate partner to guide its future, recalls Hirche. Among other upgrades, Transforming Age developed a master plan for the development, converted an unused basement into amenity space and remodeled the units.
Since that first affiliation, Transforming Age has completed a string of similar arrangements with other organizations, including:
Full Life Care, a Seattle-based provider of home care, adult day care and other services;
Vashon Island Community Care, a Puget Sound seniors housing facility;
Downtown Action to Save Housing (DASH), an affordable seniors and workforce housing operator renamed CIRC in Bellevue;
Sustainable Housing for Ageless Generations, a Seattle-based operator of 17 seniors communities in the Northwest; and
Eastmont, formerly known as Eastmont Towers, a CCRC in Lincoln, Nebraska.
Similar to Fred Lind Manor’s experience, Eastmont’s affiliation with Transforming Age enabled the CCRC to enhance its operations, financials and future master plan as well as undertake a $50 million campus expansion.
On the other end of the scale, despite receiving financial support of some $4 million from Transforming Age since 2018 to offset operating losses, Vashon Community Care ceased its memory care and assisted living services at the end of 2023, the organizations said in a statement. They based the decision on weak demand, staffing shortages and budget shortfalls, all of which were exacerbated by the pandemic.
Transforming Age closed its latest affiliation in early 2024, adding Elder Care Alliance in California to its network. In addition to operating five seniors housing properties in the San Francisco Bay Area and Ventura County, Elder Care distributes groceries to seniors in Alameda County through its Mercy Brown Bag program, among other services. The organizations plan to expand programs, care options and housing solutions for older adults. The deal also bolstered Transforming Age’s presence in California, says Hirche.
“We’ve executed many affiliations where we’ve matched up well with the mission and culture of other nonprofits, and we’ve provided great capabilities to help them,” emphasizes Hirche. “It has been one of our secrets to success.”
The Purchase Approach
Transforming Age also has grown through acquisitions, development and third-party management. In 2015, it purchased GSI, which provides master planning, real estate development and repositioning, sales and marketing, management, and consulting to Transforming Age’s network and third parties. Two years later, Transforming Age acquired eight seniors housing communities in Minnesota’s Twin Cities from a Harrison Street joint venture for $138 million.
In 2021, Transforming Age expanded its Skyline property with the opening of its newly developed Olympic Tower, a 21-story asset featuring 77 independent living, assisted living, memory care, skilled nursing and rehabilitation units. The project includes a 240-seat performing arts center in addition to a lounge on the upper floor that offers views of the Puget Sound and Olympic Mountains.
More recently, the company expanded into the active adult space by working out a deal in which Transforming Age recruited four senior living executives from Omaha-based Essex Corp. and began managing 10 Essex communities in Illinois, Colorado, Nebraska, Kansas, Iowa and South Dakota. In the spring, Transforming Age opened the $45 million, 133-unit Parkwood active adult community in Sioux Falls, which was developed by GSI after Essex broke ground on the project in 2021.
To fuel further expansion across the Midwest and make inroads into the South and East, Transforming Age established a second headquarters in Omaha. It has several active adult communities in the development pipeline and expects to break ground on one or two in the next 12 months, says Hirche.
The company also wants to increase its third-party management in the active space. Because someone’s decision to move into an active adult property is based on lifestyle versus needs, the sector provides an affordable way for seniors to experience the wellness and engagement amenities that can be found in the seniors housing market, he points out.
“As we’ve grown, we’ve really wanted to double down on serving more older adults in a wider spectrum of opportunities, and active adult is one that has huge potential,” says Hirche. “We felt there was a good mission match with the former Essex team, which has essentially become the platform to drive active adult development going forward.”
Transforming Age’s plan is to use active adult developments to leverage a hub-and-spoke model, in which the company will wrap its other services and housing options around the properties. But Hirche isn’t so wedded to the blueprint that he’ll follow it if it means hamstringing other Transforming Age business verticals from growing. Community services may lead in one market, he says, and a different type of housing type may lead in another.
“One of the reasons affiliations have been so successful is they have given us an immediate presence in various markets,” declares Hirche. “They open the door for partner conversations with other parties, whether that be for acquisitions, real estate development or our community services like home care.”
Supplemental Strategies
Just as it has sought out new housing opportunities like active adult assets, Transforming Age continues to pursue cutting-edge technological tools and philanthropic endeavors to advance the seniors housing industry. The company is “knee deep” in a digital transformation of its back-end operating and customer support systems, but it is investing in new and upcoming innovations, too.
Robotic servers in dining halls deliver orders and clear tables, for example. As a partner in Seismic, a maker of robotic-infused clothing to augment human strength that is nearing commercialization, Transforming Age is testing the apparel to gauge worker safety and senior wellness benefits. Additionally, Transforming Age is developing a platform that will allow anyone to map out their aging journey, he says.
Despite those initiatives and others, new technologies to serve the seniors space remain in their infancy, suggests Hirche. “There are a lot of VCs (venture capitalists) that have declared they want to play in this space,” he says. “But it’s a non-trivial problem to solve when it comes to actually providing products that can get on people’s radar early so that they can plan and live better lives.”
Hirche believes that philanthropic efforts in general can also do more to help people age. The Transforming Age Foundation raises roughly $3 million annually through various campaigns, planned giving programs and grants. The capital supports initiatives that range from providing hardship funds for seniors or team members to underwriting employee scholarships in an effort to retain talent.
“Our goal is essentially to find as many points of service as possible,” maintains Hirche. “But I think that there is a huge opportunity to do more in that [aging] space — only a fraction of the $500 billion or so that’s raised [philanthropically] in the U.S. annually goes to senior and aging-related causes.”
— Joe Gose