Sun. Feb 23rd, 2020

Q&A: Consultant explores ‘market forces’ in senior living – Finance and Commerce

Q&A: Consultant explores 'market forces' in senior living  <font color="#6f6f6f">Finance and Commerce</font>

The aging U.S. population may bode well for senior housing providers, but the so-called “senior tsunami” doesn’t guarantee success in the complicated business of providing homes and services for older adults.

So says Jill Johnson, a Minneapolis-based consultant with more than 30 years of consulting experience in the senior living arena.

“Every week, I’m getting calls from people who want to enter the industry. And they think it’s so easy because of the demographic tsunami. ‘Well, if we just open up a building we will be full in a matter of weeks,’” Johnson said.

On the contrary, she said, it’s “actually one of the most complex business enterprises that you can find.”

Johnson, the president and founder of Minneapolis-based Johnson Consulting Services, speaks from experience.

A two-time Finance & Commerce “Top Women in Finance” honoree, Johnson counts two of the nation’s 10 largest not-for-profit senior living organizations among her clients, and she has consulted on more than $4 million worth of business activity for clients in the U.S., Europe and Asia.

Taking a boots-on-the-ground approach to her work, Johnson has visited more than 2,000 senior living communities in the U.S., and has studied thousands more from a distance, according to her bio.

Johnson shares some of what she has learned in her new book, “Market Forces: Strategic Trends Impacting Senior Living Providers.” The book touches on everything from demographics to capital markets as they relate to senior living providers.

In the following interview, Johnson talks about challenges and opportunities for senior living providers from both a local and national perspective. The interview has been edited for length and clarity.

Q: Tell me about your consulting business. What sorts of services and insights do you provide?

A: I came out of the CPA consulting arena, and the firm that I used to work for was nationally regarded as a management consulting practice that worked in senior living. And when I started my business in 1987, I had clients from the firm that followed me.

Over the years, I have worked coast to coast — from Seattle to Florida, California to Rhode Island, and everywhere in between. [One client is] Covenant Retirement Communities, which is one of the top five national nonprofit players on the Ziegler [top providers] list. Mayo Clinic’s retirement community, Charter House, has been a longstanding client for me as well.

Q: You’re the author of a new book called, “Market Forces: Strategic Trends Impacting Senior Living Providers.” Why did you write the book?

A: It’s based off of a speaking engagement I did for Leading Age, which is one of the major associations for the senior living space. And I was pulling back the curtain for C-level executives that are operating in very complex markets or who found themselves to be in occupancy distress. A lot of it has to do with the significant influx of new competitive product that’s come into the market over the last period of years, but it’s more than that.

What I really wanted to do was to take some of that insight that I’ve gained and gleaned from working with clients that were really in trouble, and be able to bring that forward to help to share in the industry. There’s no other book like it that we’ve been able to find.

Q: What are some of the pitfalls that people should look out for if they’re looking to get into this industry?

A: Even if they’re in the industry already, the problem is the markets are shifting and changing. And with all of the influx of competition, one of the things that we see in market after market is every time a new competitor comes into play it redefines the market area for existing provider.

And then the demographics … are changing. When I first started working the industry, we were serving the GI generation. Those are the folks that served in World War II or were the age peers of those who did.

Right now, we’re dealing with the silent generation and the silent generation is different in their attitudes, their expectations. For fitness programming, for example, with the GIs you could just turn on Jack LaLanne and they would sit and watch Jack LaLanne exercise. Well today, seniors know that exercise impacts their cognitive health and how they physically feel. So now they’ve made new demands on providers.

Q: How would you describe the state of the market here in the Twin Cities?

A: We’ve just seen such an influx in this marketplace and so consumers really have choices. One of the challenges with a new community is they promise a lot of everything under the sun, but they don’t have a sense of community yet, whereas an established operator who’s been around for a while … it’s a well-oiled machine. You can really get a sense of kind of the resident culture, if you will, when you go into a property that’s been in the market for a while.

And one of the things that we see with newer communities is they struggle with that for a bit as they’re trying to get the identity. And so if it’s an experienced operator, they know how to come in and create that whereas a new provider, they’re at the mercy of the team that they’ve been able to acquire.

Q: My guess is an outsider might make the mistake of thinking that the Twin Cities is just a homogenous community. But what might work in Woodbury might not work in Richfield.  

A: That would be true. I’ve got a variety of clients in the Twin Cities that are mature providers that have been in their markets for a long time. And their communities are changing. When they first established, they were the “western suburbs,” if you will, or the “eastern suburbs” and that was an attractive, upscale appealing suburb.

We see a lot of providers get caught off guard because they were used to providing to the market the way the market always was. And now the market’s very different and they think they know the market, but they haven’t detached enough to go back in and do — we call it a re-market analysis — to really reassess exactly what’s going on.

Q: Certainly a lot of thought needs to go into it.

A: People think, “Oh, senior living, yeah, that’s no big deal.” But it’s actually one of the most complex business enterprises that you can find.  If you step back and think about it, you’ve got elements of multifamily housing, you have food service and restaurant service that you’re offering and operating, you have hospitality component, you might have education and activities. Because this group of seniors, they want to continue learning. So now you’re having to figure out, “How are we going to deliver great courses or partner with a local college?”

It’s more than just, “Oh, let’s read the newspaper of the day.” You have fitness and wellness programs. So now you’ll go in and there will be almost state-of-the-art fitness centers in some of these upscale and high-end senior communities where they’ve got personal trainers.

And then you have the whole layer of health care. With rehab services, much of that is the immediate step down from the hospital, so they’re dealing with more complex medical conditions, a lot of complex co-morbidities.

Q: I’m sure people can learn a lot more by reading your book.

A: I would love it. It’s available on Amazon. You can special order it through Barnes & Noble and any independent bookstore can help place an order for you and get it.

Related:

Q&A: Contractor celebrates 50 years in business

Like this article? Gain access to all of our great content with a month-to-month subscription. Start your subscription here. 

Source: finance-commerce.com