Scaling Up: Inside the Strategies of the Fastest-Growing Seniors Operators

Many nursing home operators have grown rapidly over the past 12 months. In many cases, that growth has come from a much larger partner.

According to the latest Argentum 150 report released in June, companies on the “fast track” for growth include Capri Communities, which opened 11 communities last year; Sodalis Senior Living, which added 12 communities; and Tarantino Properties, which added eight communities.

For some of those operators, the growth is coming from large new management contracts, including Sodalis Senior Living, which was appointed last year by Chicago-based real estate investment trust (REIT) Ventas to manage 13 independent communities under its Sky Active banner.

“It’s huge. It’s almost doubled our number of units,” Traci Taylor-Roberts, president of Sodalis Senior Living, told Senior Housing News. “Most of our growth has come from Ventas.”

By extending its management contracts, Sodalis has maintained its rapid growth and is prepared for even greater challenges.

“If we are called in and asked to take on another 10 or 20 properties, we will know exactly what resources and people we will need to shore up that structure,” Taylor-Roberts said.

Operators on the fast track

According to the Argentum 150 list, the fastest-growing operator last year was Retirement Unlimited Inc. (RUI), which acquired Brandywine Living last year, bringing its total number of communities to 59.

In addition to Sodalis, operators on a rapid growth path include Tarantino’s Houston, Texas-based company, which this year made it onto the Argentum 150 list of the 100 largest operators, ranking 93rd.

According to Meghan Holliday, chief business development officer, the company has grown through a combination of acquisitions and expanding its managed services “across a broad geographic footprint,” which has allowed it to gain market share.

Waukesha, Wis.-based Capri Communities — an operator to watch in 2023 — was also among the companies that grew with expanded management contracts. The company expanded its holdings to 36 communities, landing in 54th place.

Capri President and CFO Kristin Ferge said the growth is due to efforts to create an “environment of high-quality care and enjoyment of life” for residents living independently.

According to the Argentum 150 ranking, other operators that expanded rapidly last year included Distinctive Living, which opened 26 communities in the past year, including a portion of those through its acquisition of Validus Senior Living Management; Charter Senior Living, which opened 13 communities previously managed by Cedarhurst Senior Living; and The Aspenwood Company, which acquired four communities in North Dallas earlier this year.

Scaling Operations for New Growth

As businesses grow, care home operators are acting strategically, with staffing and the need to leverage scale.

Capri has largely sought to expand close to its headquarters. The company has avoided difficult management situations by only taking on new communities within a three-hour drive, according to Ferge.

A key factor in seniors’ quality of life is staffing. Capri promotes staff and works with recruiters to maintain operations as the facility grows.

“From a recruiting perspective, we’re always aware of people who have experience in the industry or are interested in joining,” Ferge said. “Because we have this growth and open positions, we’re able to call people on relatively quickly.”

Both Ferge and COO Geri Krupp-Gordon previously worked at Brookdale Senior Living (NYSE: BKD), the largest senior living company in the country.

“We’re all used to scalability,” she said.

Sodalis uses mentoring programs lasting six months to a year to keep operations running smoothly as the company grows, Taylor-Roberts said. By mentoring employees, the company ensures that leaders have the strength to take on new growth opportunities.

“We always have a pool of people,” Taylor-Roberts said. “We maintain these mentoring groups in each department, so we have them in maintenance, cooking, nursing and sales.”

In addition, Sodalis uses internal recruiters to hire frontline employees, which allows the company to grow at a “faster pace.” The company also works with recruiters for executive and corporate positions.

Communication has been another pillar of Sodalis’ growth. To help smooth the transition when taking on new management contracts, Taylor-Roberts said the company’s corporate and regional leaders reassess policies, procedures and lines of communication on a quarterly basis.

Before Capri takes on a new community, it examines how it currently operates, as well as its financial performance and any regulatory or similar issues that may need to be worked out. Capri’s transition plan for a new community often takes two to three months.

To help keep the process as smooth as possible, Ferge said Capri typically offers employment to all current employees currently working in the community. If they are a good fit for Capri’s culture, they are offered long-term employment.

Tarantino is preparing for the new growth by taking “proactive steps,” including analyzing the market and investing in talent strategies. Recruiting has focused on operational, clinical and marketing teams, Holliday told Senior Housing News.

Planning for new growth in the future

Momentum for operators has largely continued since the release of Argentum 150 earlier this year. Ferge said Capri now has 39 communities and discussions are ongoing to continue adding more before the end of 2024.

Looking forward, Capri plans to add two or three more communities per year, but does not have a specific community size goal in mind.

“We want to make sure what we have in place is working well to maintain our reputation in the marketplace,” she said. “We’re going to be very strategic about what new relationships we create.”

Capri Communities intends to expand in the markets where it already has a presence. The company continues to maintain and deepen relationships with ownership groups. Discussions about further expansion are ongoing, although Ferge said the details are currently shrouded in secrecy.

Sodalis is also looking for new management contracts, though Taylor-Roberts said the company may make some acquisitions in the future as capital markets turn in buyers’ favor. While growth will likely slow for the company through the end of 2024, the focus will be on building out the 36 communities it manages, with an additional management contract starting Aug. 1.

Looking to 2025, Taylor-Roberts would like to see an additional 10 to 15 properties added to the company’s portfolio.

Holliday said the team is planning new development projects and growth through the company’s business partners. The company is optimistic that it will find more growth opportunities in the future, especially in distressed properties.

“We want to stay ahead of industry trends and adapt our offering to the changing needs of our residents,” she said.