Editor’s observe: You may hear extra from senior residing executives, together with Expertise Senior Dwelling President Phill Barklow, on the subject of ongoing improvement on the upcoming (RE)BUILD convention.
Expertise Senior Dwelling is pushing forward on its improvement pipeline of latest communities in key markets throughout the nation, with the group pivoting to satisfy the wants and preferences of an evolving senior residing buyer base.
To take action, the corporate has needed to get inventive in assembling capital stacks, which President Phill Barklow compares to fixing a Rubik’s Dice.
Expertise is also taking a brand new strategy to gross sales and advertising and marketing to drive lease-up of latest developments, beginning earlier to “create the neighborhood earlier than the constructing is even constructed,” Barklow stated on a current episode of the Senior Housing Information Rework podcast.
The present improvement push spans Expertise Senior Dwelling’s a number of manufacturers, from middle-market to luxurious choices.
Tasks underway for Expertise embrace developments in Colorado, Maryland, Washington D.C. and Florida, all of which took almost a decade to get off the bottom, Barklow stated.
Expertise Senior Dwelling’s father or mother firm, the NexCore Group, together with Expertise’s in-house design workforce, mix market analytics and search resident suggestions to drive future design.
“The fixed suggestions was clear: Residents need facilities, to really feel valued, and to have a way of goal. That’s aligned with our firm’s imaginative and prescient to create communities with goal,” Barklow stated.
With 44% of properties surveyed in NIC main and secondary markets being on common 25 years outdated, Barklow stated the business should transfer sooner to satisfy incoming demand with progressive design primarily based round these resident expectations.
Beneath are highlights of the podcast interview, edited for size and readability.
On the 2024 improvement local weather:
As , improvement takes time. These initiatives we’ve been engaged on, a few of them return eight, 9, ten years. Relationships had been constructed, and grasp builders have been engaged on these unimaginable websites to get them entitled. It’s been a whole lot of laborious work.
We’ve acquired an unimaginable workforce right here at Expertise Senior Dwelling and Expertise Senior Dwelling Improvement engaged on the design, advertising and marketing plans, how the buildings circulation, and all the nice suggestions from our present residents, prospects trying to transfer in, their households, and the main target teams we’ve had. It’s thrilling to consider what the way forward for senior residing appears to be like like from a improvement perspective.
The capital markets have been high of thoughts for everybody. Expectations have been up and down, and there have been occasions once we thought perhaps this isn’t the best time for improvement if the capital markets can’t help it. However we’ve discovered that, as we ease out of a number of the challenges with the Fed’s rate of interest changes, we’re positioned as one of many few within the house prepared to enter full development mode with new developments.
On Expertise Senior Dwelling’s improvement pipeline:
We’ve got a extra conventional senior residing strategy with assisted residing and reminiscence care, usually round 100 to 130 items. These are often suburban properties, constructed with stick-frame or masonry building, providing a basic senior residing expertise.
We even have an impartial residing, assisted residing, and reminiscence care model known as the Gallery Assortment, which focuses on urban-adjacent areas. These buildings are bigger, with 150 to 300 items, positioned close to city environments to facilitate entry for workers, households and residents.
Our most prestigious model is the Reserve Assortment, which options city, high-rise developments. We’re launching three of those within the subsequent 90 days and are enthusiastic about increasing this model. We’re about to open our first Reserve property in South Denver, in a city known as Lone Tree, which has been very effectively acquired.
Moreover, now we have an energetic grownup model known as Lively 55, targeted on age-restricted multifamily flats with restricted companies however in depth facilities.
Presently, our improvement focus is on the Gallery and Reserve Collections. You talked about the three initiatives within the D.C. metro space; we’ve introduced two of them. We count on the Falls Church neighborhood to interrupt floor inside the subsequent 30 days, and the Reserve at Strathmore Sq. in North Bethesda ought to break floor within the subsequent three to 4 months. We’re additionally breaking floor on a Gallery property in South Tampa subsequent week, one among our bigger Gallery communities, together with one other Reserve Assortment venture in Florida, which I can’t totally disclose but.
It’s a busy pipeline for the subsequent six months, however we’ve put in a whole lot of laborious work to make sure we will hit these groundbreaking targets and execute our plans.
On Expertise’s vertically built-in improvement firm, relationship with NexCore Group:
We’re vertically built-in throughout the board. As a part of NexCore Group, the biggest healthcare developer in the USA, we profit from a wealth of insights and a robust workforce on each the ESL and NexCore sides.
I’d prefer to say we decelerate to maneuver sooner, however being vertically built-in with our operations workforce permits us to get direct suggestions from our residents and potential residents. The truth is, the suggestions from prospects who don’t select to maneuver in with us gives useful insights into what’s lacking available in the market and why they aren’t able to make this determination, whether or not it’s with us, our opponents or staying at house.
These focus teams, together with enter from our workers, are invaluable. We collect suggestions not simply from salespeople and government administrators, but additionally from frontline workers about why they select to work with us, what motivates them, and why they arrive in day-after-day. Attracting and retaining high expertise is a precedence for us, which is why we’re targeted on improvement. Many older communities accessible for acquisition will not be superb when it comes to location or design to satisfy the wants of our new clientele, each residents and workers.
Our vertical integration eliminates the standard communication gaps you see when you’ve separate homeowners, builders and operators. With out the “phone sport” impact, the place suggestions will get distorted by totally different pursuits, we’re all aligned as one workforce. We intention to get it proper, transfer the needle ahead within the business, and guarantee our workers are engaged and motivated to develop with us.
On utilizing resident suggestions to offer future design insights:
From an amenity and placement standpoint, we acquired a whole lot of suggestions in regards to the need for intergenerational, numerous cultures, extra city environments, and walkable, impartial settings. The fixed suggestions was clear: residents need facilities, to really feel valued, and to have a way of goal. That’s aligned with our firm’s imaginative and prescient to create communities with goal.
After we hear from residents and their households, they emphasize that they’re not searching for a standard retirement neighborhood the place they simply sit idle. They need to stay energetic existence, keep engaged, and stay a part of society—one thing they’ve at all times completed. We hear the identical needs from potential residents as effectively.
Apparently, once we began discussing improvement within the D.C. market, potential residents had been reaching out to us. They heard about it and did their very own analysis. That’s what you get with the boomer technology. They known as to make sure we had the facilities and design options they had been searching for, even whereas we had been nonetheless within the design part.
Having been in senior housing for 31 years, I’ve seen the clientele change considerably, and I’m enthusiastic about this shift. It’s now extra of a partnership—you’re not simply constructing and hoping individuals will come. As an alternative, you’re co-designing it collectively, constructing a neighborhood and a way of goal collaboratively. It’s been a rewarding course of.
On adjustments to design in current senior residing improvement:
I don’t imply to offend anybody, however our asset sort has progressed very slowly in comparison with different actual property sectors. Places of work have modified dramatically, multifamily has advanced considerably, and you may see this pattern throughout varied asset varieties. Nevertheless, senior residing has been sluggish to evolve, transitioning step by step from serving the Silent Technology and the Biggest Technology to now addressing the wants of boomers. I do assume that boomers, together with some forward-thinking builders (myself included), have pushed design improvements. Nevertheless it’s actually the customers—residents, their households and workforce members—who’re driving these adjustments. Their expectations are totally different, as is their willingness to pay for higher-quality experiences, which is nice.
From a design perspective, city environments have turn into more and more necessary, particularly these close to nice retail and cultural occasions. That’s why I’m so excited in regards to the Strathmore neighborhood. It’s proper subsequent to the Music Heart at Strathmore Corridor, the second busiest live performance venue within the Mid-Atlantic. It’s a unbelievable location for our residents.
Relating to condo sizes, our monitor document exhibits that bigger items promote out first. The truth is, lots of the deposits we’ve acquired for initiatives that haven’t even damaged floor are for these bigger flats. After I began 30 years in the past, I bear in mind working in a neighborhood the place 10 residents shared one restroom. We’ve come a great distance since then, however some are nonetheless constructing small studios with two unrelated individuals sharing an area. Pre-Covid, that was a tricky promote; post-Covid, it’s almost inconceivable.
Suggestions is essential for us. We give attention to understanding what potential residents must make the choice to maneuver, and extra importantly, once they’ll make that transfer.
We intention to encourage individuals to maneuver earlier than it’s a necessity on account of well being points or strain from household. With 5,000 to six,000 individuals turning 80 day-after-day on this nation subsequent 12 months, and 10,000 turning 65, our objective is to have interaction the youthful cohort—these of their 60s and 70s—who’re making proactive selections about their residing preparations. That’s actually our finish objective.
On main variations between final 12 months’s improvement local weather because it compares to this 12 months and 2025:
We closed our final deal in December of final 12 months, which was in all probability probably the most difficult time in my profession to get something completed. However we made it occur with inventive capital companions, a whole lot of laborious work, belief and communication. Nevertheless, we haven’t closed something but this 12 months. That’s been the distinction. I haven’t seen many groundbreakings within the business in any respect in 2024, and whereas there have been a number of in 2023, it’s nonetheless not as a lot as we’d like or what we’ve seen in earlier years.
As I discussed, now we have a pipeline, and we count on to execute on 4 initiatives earlier than the tip of the 12 months and two within the first quarter of subsequent 12 months. The inventive capital options we’ve pursued, going past conventional business capital companions, have been the place we’ve discovered success. There are numerous individuals intrigued by this business, and it entails an academic course of.
Usually, when working with those that’ve been on this discipline their complete careers, they know what they like and don’t like, which operators and places work for them. However if you usher in companions from outdoors the business, you’re primarily ranging from scratch. We’ve discovered some extremely good actual property capital companions who’re excited to be on this enterprise with us.
The primary distinction now could be getting each debt and fairness companions off the sidelines and into the sport, responding to the demographic developments which are inconceivable to disregard. The demand is actual, and now we have to react to it.
On developments versus acquisitions:
I need to be intentional about this. I feel everybody sees the chance in entrance of us with the present supply-demand imbalance. We’ve mentioned this earlier than—the overwhelming majority of properties in most markets are at the least 10 years outdated, constructed and designed for a distinct clientele. So, for these coming off the sidelines from a capital perspective, whether or not on the debt or fairness facet, they’ve two choices: pursue new developments or purchase an present neighborhood that’s both stabilized or underperforming.
The suggestions we’ve acquired signifies that most individuals are leaning towards acquisitions. Whether or not it’s as a result of they see extra creativity or alternative in that route is an efficient query. Nevertheless, with fewer gamers having a robust improvement pipeline like ours—since we’ve remained dedicated to growing new initiatives—I imagine that’s why many are specializing in acquisitions.
There’s danger in all the things you do on this enterprise, however we belief what customers are telling us about the way forward for senior housing. That’s extra interesting to us than attempting to show round a struggling venture.
On components it’ll take to pencil out improvement in senior residing subsequent 12 months and past:
I hope it will get a bit simpler, however perhaps it’s not a lot about creativity as it’s about belief. A few of our initiatives contain two, three and even 4 banks on the debt facet, which requires a whole lot of coordination to get everybody to agree on phrases and mortgage paperwork. It takes creativity to make that many stakeholders work collectively, particularly once we even have a number of companions on the fairness facet.
It’s been difficult, however our monitor document has helped us elevate outdoors capital, which not each group has completed efficiently. Those that have raised exterior capital have a tendency to have a look at developments in a different way, as their return expectations and belief ranges are sometimes distinct.
I do hope it turns into simpler for everybody as a result of, in the end, all of us must push this business ahead. There’s a major want for development to maintain up with demand, particularly as buyer wants and preferences evolve. It’s undoubtedly demanding, but it surely’s additionally rewarding to be inventive in structuring a capital stack as of late. It’s like fixing a Rubik’s Dice, but it surely’s one thing we genuinely take pleasure in tackling.
On market choice for brand new improvement in 2025:
It’s a little bit of our secret sauce, so I’ll provide you with a high-level overview. We’ve got an in-house knowledge analytics workforce, and that’s their sole focus. They’re all a lot smarter than me, fortunately, they usually crunch the numbers on what’s working. We’ve got a spreadsheet with round 45 totally different metrics for each market we’re evaluating. To place it in perspective, they’ve analyzed over 1,100 offers, however we’ve solely damaged floor on 16. So, they’re extra inclined to go on alternatives than to maneuver ahead. All of it begins with that knowledge analytics workforce.
We even have an in-house Vice President of Market Intelligence who spends a whole lot of time in these markets, not simply occupancy charges and pricing, but additionally understanding the native market dynamics, what opponents are doing, and what’s working or not. This analysis influences lots of our selections, from unit combine to suit and end.
For us, being in tune with our customers and prospects is essential. We conduct surveys and collect suggestions from our residents and their households, however most significantly, we’re current. I’m on the highway almost each week visiting our communities, talking instantly with residents to grasp what they like, what’s working, what’s not, and whether or not they discover worth in what they’re paying for. In the event that they don’t, we need to know why. In the event that they do, we need to perceive that as effectively.
We’ve constructed a whole lot of belief with our residents, their households, and workforce members over time, and we’re intentional about looking for and utilizing their suggestions. There’s no ego concerned—we genuinely need to enhance. Our objective is to proceed evolving this business, enhancing each the present communities our residents stay in and the brand new ones we’re growing for the longer term.
On balancing danger in new senior residing improvement:
It’s extra faucet dancing than strolling, however there’s a high quality line between danger and reward. For us, we imagine within the knowledge and demographics, and now we have an unimaginable funding committee and founders who’re dedicated to rising and altering this enterprise. We don’t ignore the capital markets, and whereas expectations have modified, we stay convicted in doing the best factor and creating higher outcomes for our residents, households, and workforce members.
NextCore Group, our father or mother firm, is likely one of the largest healthcare builders in the USA. We’re seeing the necessity for brand new healthcare choices in higher places throughout all fronts, not simply in senior housing but additionally in our medical outpatient and life science companies. That is what drives us: a dedication to enhancing outcomes for our residents and companions in healthcare.
Whereas we could also be forward of some opponents on this strategy, I imagine there may be nonetheless loads of room available in the market for everybody. If we’re the group pushing issues ahead, some may take a look at us and ask, “Will this work?” Possibly it gained’t, however I’m dedicated as a result of we perceive the suggestions from residents and what the market wants. Our success over the previous couple of years backs this up. Most of the buildings we’ve opened have been totally occupied and cash-flowing inside 12 months or much less. The truth is, our fastest-growing constructing, which opened final 12 months, reached 100% occupancy inside six months and began cash-flowing even sooner.
As for the pipeline, once we speak in regards to the wants of our residents, there’s at all times a social want that’s simply as necessary because the bodily one. Folks don’t usually get up on a Tuesday morning and determine, “I need to analysis senior residing and transfer in as we speak.” It’s usually a social want—individuals need to be round others who share comparable experiences. I feel Covid introduced this to mild, with many individuals realizing they don’t need to undergo one thing like that alone once more. Dwelling in a senior neighborhood now appears to be like far more interesting than residing at house, whether or not with a partner or alone.
Persons are making that call earlier, and we’re designing communities with varied social areas, not only one exercise room or a dated eating room. Each house is deliberately designed to foster human connection and create extra goal in life. Our residents need bigger flats, however they spend much less and fewer time in them.
I’ve been preaching for the final 20 years of my profession in improvement that the way you begin a neighborhood is precisely how it is going to be maintained all through. Not too long ago, I had the chance to return to a neighborhood I opened over 20 years in the past, which had since been taken over by a distinct administration workforce. After I walked into the constructing, a number of the individuals who had been there 20 years in the past remembered me and had been nonetheless a part of the neighborhood. The tradition we established in that first 12 months was nonetheless in place, which was actually cool to see.
I imagine all of it begins with individuals. That’s what it’s all about. We prefer to pre-lease as aggressively and as early as doable, which is totally different from the business customary. This strategy has been an academic course of for a few of our capital companions, who’ve needed to modify to the concept that we don’t simply open a gross sales trailer three months earlier than a constructing opens and hope issues work out. That’s the outdated mannequin for senior residing improvement, and it’s not ours, particularly for bigger communities. You have to create the neighborhood earlier than the constructing is even constructed. The neighborhood of individuals is vital.
We begin by hiring our government director and director of gross sales as early as doable. We construct out a leasing middle and present individuals what the actual property will appear to be, though this isn’t strictly an actual property determination. We make it a precedence to rent one of the best government director and director of gross sales we will, aligning incentives with ours to make sure the constructing is full inside the first 12 months. This is the reason we’ve had the success we’ve had—it’s not about me or the advertising and marketing workforce. It’s about hiring the best individuals, aligning incentives, and empowering them to grasp the market and envision what the neighborhood will appear to be.
Our design is world-class, and folks usually say, “Wow, this appears to be like wonderful,” however the actual query is, “Who will I join with? How do I recover from the worry that this gained’t really feel like the primary day of kindergarten over again?” You may solely overcome that by actually creating the neighborhood earlier than the constructing is constructed.
