Throughout the decade following its founding, LCB Senior Living has become known in the Northeast as a regional powerhouse. LCB’s CEO ‘Michael Stoller’ pleased with how quickly the company is growing and with its solid occupancy. Michael Stoller preparing the company that is based in Norwood, Massachusetts for the upcoming chapter in a senior living environment where operating is a hard thing to do.
LCB is particularly focused on the workforce challenges that senior living providers throughout the world find un-settling; this is according to what Stoller had stated to Senior Housing News in a recent interview held in Chicago. In order to keep an individual from carrying an overwhelming amount of responsibilities at any given time, the company has begun putting structures in place that are going to benefit people with their workloads.
Stoller has committed to investmenting into the communities of LCB to best keep their competitive edge. It is also a concern sourounding industry norms and the capital expenditures in need of being changed. Furthermore, Stoller believes the obsolete buildings could be more of a burden to the company than over-supply is. The company’s development, including acquisition strategies, is evolving in the true urban areas. There is also a potential for active adults to be a part of the new market growth. LCB’s portfolio at this time has 27 different communities which are either currently operating or will be soon in the following states: Rhode Island, New Hampshire, Connecticut, Massachusetts, Vermont, and Pennsylvania.
A Different Way to Look at Over-Supply
Stoller’s roots had grown deep into the senior housing when spending time as the founder of Newton Senior Living previously. Newton became the 16th largest senior living providers in the nation. However, in 2005 they were sold to a division of Lazard Freres. While coming back from a financial crisis he had started-up LCB when they realized the significance of additional assisted living areas and began bringing that notion to the market by way of acquisitions having added-value and developing from the ground up.
Stoller made the statement to SHN that “of the company’s greatest accomplishments ever made, which was the creation of more than 1,300 new jobs due to the new buildings that were built.” He also added that, “due to the consistency and strength in culture their rapid growth has not caused any reason(s) to be questioned.” LCB uses the property by property approach in creating a product which will fulfill the community as well as to meet with the demands from specific markets.
Stoller stated that “it has always been the company’s belief that no classic prototype exists. It is all about being local, including location, size, and the market.” However, Assisted Living is their main focus. In March of 2019, LCB consisted of around 2,000 beds, with 64% of those being for Assisted Living, while Memory Care covered 28%. Furthermore, as long as the company is within these settings they are committed to staying at the lower end on the acuity spectrum.
Stoller also stated that, “the company does not want to ever feel like an unlicensed nursing home. That is the reason for many of the properties being more competitive of independent buildings, although they’re not.” There has been at least one deal that LCB walked away from due to a change in market dynamics, however, Stoller continues to be sensitive of the newest supplies that have been flooding many of the locales over recent years. They have continuously maintained between 89% – 93%, keeping their portfolio stabilized. The nationwide assisted living occupancy was holding at about 85.4% while according to the National Investment Center’s data of the Seniors Housing and Care (NIC), occupancy of senior housing was holding at around 88%.
Many lenders from LCB’s financial partners originally envisioned their capex to be around $300 – $400 per unit. However, LCB then made a comeback of $1,200 per unit. Although Stoller thought it should have been a higher number than that. Stoller had stated that, “two decades ago people would generally keep their vehicles up for about ten years and trade-off, whereas today many people just lease a vehicle and trade-up every three years or so.” These day’s people are also upgrading their homes. Consumers should have the option of having what they consider to be fresh, new, and appealing so that is why our company provides these options.
He continued that the decrease in senior housing occupancy is not only caused by new supply functions, as it recently reached a historical low.
He stated, “I believe the worse part of occupancy is inaccurately described as oversupply, but I think there are too many units near or at obsolescence, that people are not putting money into maintaining or upgrading properties.” The current stock is unable to compete with the newer buildings, even at a lower price. Stroller believes the issue would be less important timelines and investments were more aggressive. LCB is being placed in buildings that are just 5 years old for retrofitting bistros and WiFi.
LCB has various development deals in progress, including with Berkshire Residential. According to Stroller, sites could reach Washington D.C., but not likely. Their existing portfolio involves several multi-story units around downtown urban areas. Although LCB is starting to see more senior housing in urban areas being accepted, their 10-year history is still Strollers largest disappointment. He stated, “If our pockets were deeper, we would have fought harder.”
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