TAMPA, FL -- CLW Health Care Services Group, headed by Allen McMurtry (top right photo), will be highlighting turnaround stories of Senior Housing communities over the next few issues. The Arbor Company of Atlanta, GA is featured today.THE COMMUNITY
• 60-unit purpose built Assisted Living/Memory Care (46 AL/14 MC)
• Middle-income suburb of major southeastern city
• Built in the mid-1990s
• Prior manager was a large, nationally recognized Assisted Living provider
THE STORY
What made the turnaround work after The Arbor Company took over?:
1. Changing the name to one used for other Arbor-managed communities in the area, whereby quickly gaining credibility in the market place. The other communities were well established and successful.
2. Hiring an experienced Executive Director, whom Arbor knew. He was then made the leader of the detailed takeover plan.
3. Hiring an experienced Marketing Director, who could hit the ground running.
4. Planning and quickly implementing a $150,000 refurbishment of the common areas, with specific attention paid to Memory Care. Upgrading the common areas immediately and making some small improvements in the apartments as they turned over allowed management to start improving rental revenue.
5. Working diligently to get a customer service “culture” established. Using an organized communication program, Arbor moved quickly to convey to the residents, families, and staff that the community was having a new beginning.
6. Completing a thorough analysis of rent levels and level of care charges as compared to the competition. Arbor then implemented appropriate new street rates in order to increase revenue and occupancy as quickly as possible. This also allowed Arbor to begin selective rent discounting on apartments that were more difficult to lease.
7. Configuring and leasing some apartments as roommate suites (two people per apartment), which gradually increased revenue per occupied apartment and thus improved the bottom line. This strategy was particularly effective with Memory Care apartments.
8. Moving to eliminate the perception of leadership instability in the community by hosting group and individual meetings with families and community leaders.
(Arbor residence at Crabapple Road, Alpharetta, GA, middle right photo)
Greatest weakness:
The greatest weakness found in the community – and directly reflected in its low occupancy -- was a lack of the leadership and team spirit that is required to make a community successful.
Arbor worked diligently to encourage employees to actively participate in crafting new service and personnel standards that would reflect “The Arbor Way.” With ownership in the new plan, employees embraced the changes and rapid improvements in all areas of operations, including occupancy, soon resulted.
(Arbor residence in Athens, GA, middle left photo)
Main challenges:
Resident Assessment & Level of Care Programs: The introduction of the Arbor resident assessment and levels of care program to residents, families and staff was challenging.
This Arbor-developed program was instituted early on and, not surprisingly, was met with some resistance. Arbor had to “sell” themselves and the care program they provided. Fortunately, with a lot of hard work in this area, they were able to get a 30% increase in LOC fees in the first year after they took over.
Staffing expenses: Labor costs were extremely high when Arbor arrived, with overtime being a major factor.
Arbor worked diligently to establish better controls to bring labor expenses back in line and, after about three months, they were able to accomplish that goal.
Personnel changes:
As Arbor became involved in day-to-day operations they concluded they needed to replace some department heads. It took about 6 months to get a great leadership team in place.
Dining operations: Arbor quickly made some major changes in the menus and in dining service, which paid significant dividends in a short period of time.
Favorable response to the dining changes by residents and families greatly helped Arbor’s credibility as it made other necessary operational adjustments.
The old saying “If the food isn’t right, nothing is right” once again proved to be true.
Results:
Year Occup Revenue NOI Operating Margin
2007 n/a $2,799,170 $440,854 16%
2008 78% $2,776,889 $653,955 24%
2009 95% $3,100,488 $872,092 28%
2010 95% $3,328,985 $956,034 29%
Notes: 2010 data is annualized through October
Arbor assumed management in February 2008
The Arbor Company
The Arbor Company, based in Atlanta, Georgia, has been in the senior living management business for over 20 years. They currently manage 15 communities, containing 1,298 units, in 7 states.
For more information on the services Arbor provides, please contact M.E. Costello or Ellison Thomas at 404.237.4026 and visit them on the web at www.arborcompany.com
CLW IS PLEASED TO ANNOUNCE THREE RECENT SALES:
• Sedgebrook & Monarch Landing (Entrance Fee CCRCs - 963 total units) located in Lincolnshire & Naperville, Illinois
• $13.9 million sale of AvonLea & Gulf Breeze Courtyard located in Tupelo, Mississippi & Gulf Breeze, Florida
• $9.5 million sale of Summerfield Retirement Residence located in Bradenton, Florida
Contact:
Allen McMurtry, CLW Health Care Services Group, 4301 Anchor Plaza Parkway, Suite 400Tampa, FL 33634. PH: (813)-349-8349
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