The company achieves that by building efficiencies into its operations such as sharing home-office employees among its 26 open communities, using technology and setting community stabilization upward to 98% or even 100% occupancy.
Looking ahead to 2022, Harris is focused on growing Arrow’s portfolio.
And I was surprised at how many of our communities were able to work through what were overwhelming the hospital systems. Where we had cases, it was really based upon resident exposure to family visits.
The endemic elements of what this pandemic has evolved into, I think, unfortunately, will be a part of the future, just like we have flu season.
We are averaging, at some communities, a 2% recovery in occupancy a week.
We had a lot of new developments open right before Covid, or during Covid.
We have a lot of pre-sales or new-development communities that are going to open in the next six to 10 months that are leasing new reservations at a rate that’s probably even in some cases better than pre-Covid rates.
We’re noticing that the communities that are lagging in the overall performance were ones that were turnaround projects we had taken on before the pandemic.
Instead of looking at stabilization as 92%, if the communities can drive upwards of 98% to 100% occupancy, that’s really critical in managing the balance of paying our employees well and maintaining this modest, middle-market rent structure.
We also heavily share employees at a home-office level, providing services to the communities, and services that we would otherwise have to have one FTE.
On a blended rate, we’re doing better than the traditional 30% to 40% margins because of independent living.
Louis County is an example of an area that has some pockets of wealth, where there’s been a tremendous amount of new development — great product — but the occupancies have really lagged, as the industry is targeting these higher-income markets.
I think what we’re going to find is that, as the industry researches more middle-market, our penetration rates grow.
We’re actually charging or getting better rates overall in our blended approach, pure middle-market, versus the concessions in the battle that has gone on on the other side of the river for communities that were underwritten at rates far higher than what we’re achieving in this suburban market just next door.
If anything, you’re convincing people that they’re worth investing that money into, not that they have the option to choose something else.
Some of the tools that were developed to create follow-up strategies, direct mail and other individualized marketing efforts to drive resident prospects to our communities — today, if anything, we’re going back to that model more purely than we have in last couple years as web and SEO approaches and geofencing have dominated a lot of the narrative.
I think we’re going to see a bigger focus on, now that we’ve generated enough leads, how to close these leads.
The more we can figure out how to motivate those people who have the choice to say yes to the community, versus those who are desperately forced to make a decision, that is where we’re going to see improved length of stay.
And back to the core message of what drives efficiency, what drives better outcomes, what helps us meet the affordability challenge — we have to have residents move in even sooner, even if it is six months sooner, than waiting until that crisis gets a little bit more unmanageable.
If the sales process is more about what-ifs — we call it the emotional roller coaster, the ups and downs — we’re more likely to capture them before all the bruises set in and before all of the “yellowing” and the browning that can occur.
And as the teams had to quickly fill as many as we possibly could, we have additional leads we have to cultivate that might not move for the next six to nine to 12 months, and our sales process could stand to be a whole lot more focused on that group.
A few years ago, the shift for us was, how do we manage the 10 to 11 systems that we have on average in each community and have some way for communication and analysis across each of these various channels.
These are all systems we all are most likely using, but I think a lot of companies haven’t taken that step forward to building the platform to create the conversion, and to create the better outcomes.
We convert through Power BI, and I think that in the next two years, our greatest innovations are going to come from how all of this information can be utilized in creating better outcomes for our residents and making interventions when needed, versus the way today where we plan by checklist or we plan by physical proximity.
If we can create artificial intelligence and machine learning, because we’ve been collecting data — being able to interpret that data, I think, is what’s going to dictate the next two to three years, at least within our organization.
But I think we have an opportunity to, through trial and error, land on a better way of doing things.
I was on a national, high-profile campaign, going from exploratory committee to national to official committee, but it was the end of my road.
Six months later, I was still at that project, not only wrapping up the goals of a sales SWAT team, but I had taken a community from 50% to nearly 100% occupancy in less than six months.
I remember at night, after putting in a hard day — and this is up in Minnesota in the middle of winter — I probably could have gone to a bar.
We were creating fake websites and working on modeling out some templates to use for some consulting clients we were working with.
I remember touring with somebody in one of my early projects who said, ‘Well, last time I went to that community, nothing was going on, it was boring, it was dead.’ So the day I got them to agree to come in for a new tour — because we were in the process of acquiring the community — and I set up a live band to play during a happy hour event that I planned and timed out just for this couple’s visit.
If our employees think that what we’re doing is cool, it transfers into how they are meeting and providing care for our residents.
But she turned it into a rock star party, and they actually set up a fake tattoo parlor.
I think we are in a period of time where, more than ever, we have to be employee-minded, and that is how we will drive any of the outcomes we want to see in making senior living cool and more attractive to seniors and adult children.
If we can create more efficiency with that group, and open our ears or eyes to the feedback that they have to provide, I think that we’re going to learn a lot.
Our employees who may have been slow to adopt technology are more willing because they know that it might just be them on the shift, or it might just be them and somebody else, and they need to leverage something to get through the day.
I think that’s going to be an opportunity because we have a track record — and, we have especially had some very positive outcomes in our current pre-sales projects.
The staffing challenge was there pre-Covid, but boy, it sure got very bad very quickly.
And additionally, that we are finding that better path forward, because struggling through the need to adapt and the need to change — with all of the different things that we’re facing in the industry — is going to surely help each company find their true differentiation somebody staying at home or in another community.
But I hope that across the entire industry, we are far more outcome-minded and that we are able to figure out a way to tout the success rates like other industries can, in a tangible way that is objective and easy for the consumer to navigate and compare one product to another to know they’re getting what they’re paying for.