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Atlas Senior Living continues to grow its portfolio through new development, but future growth could be concentrated on value-add acquisitions, according to Atlas President and COO Wyman Hamilton.
Last year, Hamilton said Atlas – along with the wider industry – took part in a “solid year” of rate increases and rate growth that creates a path ahead for improving and expanding operations.
“We’ve got a bit of a runway ahead of us I think and I anticipate that going into the end of this year into 2025,”
Hamilton said. “We’ll see another pretty solid rate growth year and then we will see after that, but I think we have a solid year to help get margins back to where they really should be.”
Headquartered in Birmingham, Alabama, Atlas Senior Living operates 35 communities across eight states.
New growth continues, evolves from development to acquisition
Senior living operators have taken smaller bites of the proverbial apple when approaching new growth, from acquisitions to new construction, than compared to past years.
That strategy has for Atlas taken the form of a new, ground-up development, The Oscar at Georgetown, in Georgetown, Texas.
That project represented the company’s largest development at 231 units. The community opened on April 1 with 60 IL units pre-sold, with projections to have over 100 units full in the coming quarter. Assisted living residents will be able to move in after a mandated 60-day licensure period.
“It’s a special market and there’s a big need there and it helps us,” Hamilton said.
Atlas is also in construction of another community in nearby Brownsville, Texas set to open in early 2025 with a similar unit count as the Georgetown project, Hamilton said. Further afield, Atlas is also amid construction of an assisted living and memory care community in McDonough, Georgia.
Earlier this year, the company opened a memory care and assisted living community in Hudson, Florida that is “filling up well,” Hamilton said.
Going forward, Hamilton said the company’s collective focus when it comes to growth will remain on acquisitions of communities that will add value to the company’s portfolio.
“Historically we’ve had more development underway but it’s a new playing field,” Hamilton said. “It’s harder to figure out, but when you can with the right partner and right market, it’s a benefit to everyone.”
In terms of new acquisitions, Atlas has three communities in the Orlando, Florida market under contract as of early May, all of which are sites Atlas has managed since 2019. The transaction is set to close near the midpoint of this year, Hamilton noted.
“These types of acquisitions are nice because the due diligence is easy and we’ve been managing the communities and we know the markets well,” Hamilton said. “We say no a lot because it’s hard to get a deal financed right now and it’s hard to find those right opportunities.”
While transactions are tougher to pencil out than in year’s past due to higher cost of debt and elevated interest rates, Hamilton said the industry may have to get used to elevated interest rates that were seen in past decades. But those conditions could soon be improving, as previously reported by SHN earlier this year.
Solving staffing challenges with retention
Senior living operators have faced a revolving door of challenges on staffing over the last four years. This year, operators are making renewed efforts on promoting retention and reducing turnover at their organizations.
Hamilton said Atlas was seeing more stable wage rate growth in staffing compared to the steep rise in employee compensation seen last year and in 2022. That’s coupled with what Hamilton called “pressure” in filling positions lessening with more applicants on the front end and overtime costs remaining stable this year.
“I think the labor market is showing that it could be fixing itself in some cases,” Hamilton said.
To-date, Atlas Senior Living, like other operators, has sought to drive additional revenue by offering expanded ancillary services. That’s common within Atlas independent living communities with meal and dining plans, along with IL communities now having a liquor license.
Within ancillary services as part of resident care, Atlas recently entered into a joint venture partnership with a pharmacy that’s rolled out at half of the company’s communities. That’s coupled with a recent partnership between Atlas and Curana Health to improve resident service and care.
“When you control it yourself, you’re able to provide a better service and it’s great to insulate a revenue stream with better service to residents while controlling the operations of it,” Hamilton said. “It’s going to take us another 18 th 24 months before we have it across all of our communities.”
To improve expense control, Atlas tweaked its employee incentive programs to be monthly, with some incentives based on coming under or hitting a projected budget. For example, if a food and beverage director meets a monthly budget, that employee can earn a bonus in their next paycheck.
Within current staffing challenges, Hamilton said Atlas was focused on reducing turnover in the last 12 months due to the high cost of replacing and training new team members. That came after 20% of Atlas employees did not make it past one month, but has improved since last year to less than 1% of employees leaving quickly.
“It’s helped tremendously get food costs under control,” Hamilton said. “We’re doing a great job of changing our orientation process and making that similar to what we do with residents and making them feel special and that’s helped.”
Also this year, Atlas launched its scholarship program for frontline workers to help them grow within their roles and beyond, having in March awarded its first scholarship to an employee seeking a nursing license. The program also includes an employment commitment, which could help improve short-term turnover, Hamilton said.
“Turnover is expensive and it helps with retention, while helping our associates better themselves and better their careers,” Hamilton said.
