By Tim Regan | February 25, 2020
ith millions of baby boomers reaching retirement age, an evolving landscape for pricing, a red-hot labor market and the looming potential for multiple avenues of disruption, it’s clear the senior living industry faces a new chapter.
All of those forces will shape the industry for years to come, requiring that investors, owners and operators be willing to start fresh rather than sticking with time-tested but increasingly obsolete approaches, according to Eclipse Senior Living CEO Kai Hsiao.
“2020 is, in my view, sort of the reset year for the industry altogether,” Hsiao told Senior Housing News. “If you don’t do things differently … it’s not a good way to move forward.”
As Founder and CEO of Lake Oswego, Oregon-based Eclipse Senior Living, Hsiao is guiding the company through these times of change by preparing it for the senior living landscape of tomorrow. The operator has worked to expand its middle-market offerings, overhaul its pricing model and think differently about turnover and staffing.
There have been challenges along the way. As Eclipse has grown, it’s solely taken on communities in need of a turnaround — including starting out of the gates with more than 70 properties formerly under the Elmcroft Senior Living banner. All the while, the company was building out its senior housing platform as it took on management of new communities, a process Hsiao compares to driving a car while building it.
Chicago-based real estate investment trust Ventas (NYSE: VTR), which holds a 34% ownership stake in Eclipse, has singled out the operator’s communities as a drag on its senior housing operating portfolio’s net operating income.
Yet, Ventas is expanding its relationship with Eclipse even as it restructures and intensifies its senior housing asset management approach overall, in the face of troubled results in its operating portfolio. Most recently, Ventas tapped Eclipse to take on a nine-community former Carillon Assisted Living portfolio in North Carolina. Today, Eclipse has about 120 communities across the U.S., making it one of the largest senior housing operators in the country.
For Hsiao, turbulence is likely and timelines are hard to predict in turnaround situations, but he’s confident that Eclipse is on track with its plans, including new pricing models that should help it compete in a difficult competitive environment.
“People call us not because things are going well,” Hsiao said. “They call us because they want to see a different result.”
(Kai Hsiao serves on the Pennsylvania Assisted Living Association’s Board of Directors representing Eclipse Senior Living/Elmcroft)