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Russ: Welcome back to The BusinessMakers Show, brought to you by Comcast Business, built for business. Our topic today is the aging U.S. population and that explosive growth category called Senior Living. And my guest today is the Founder and CEO of Belmont Village, Patricia Will; Patricia, welcome to The BusinessMakers Show.
Patricia: Thank you, it's a pleasure to be here.
Russ: You bet. Tell us about Belmont Village.
Patricia: Belmont Village is a Developer, Owner and Operator of Best in Class assisted living communities. Assisted living communities being communities that are designed, built and operated to facilitate living as well as possible during one's older years.
Russ: How long has the company been in business?
Patricia: We just celebrated our 17th anniversary. It's hard for me to believe that it's gone that fast and that I'm moving so close to the elderly population.
Russ: Well we all are, I'm right there with you Patricia. Okay, very interesting. So 17 years ago it was kind of different, I don't even know if I knew about the term assisted living 17 years ago.
Patricia: I think the category may have begun to be created largely out of need for something other than skilled nursing care, but it for sure wasn't established yet. I began, um, in the mid 90s actually as a medical real estate developer looking for a venue outside the home when it no longer became feasible to take care of my Mother-In-Law Josephine. At that time, there was one community in Houston that qualified as so-called assisted living. It was brought to us, and I have a debt of gratitude to this day, by none other than Marriott, and that community was it. It was 100 units, it was full and it had a waiting list. Significantly it had no Dementia care, so the very issue that my Mother-In-Law had was one that they weren't equipped to deal with, no one was equipped to deal with it.
Russ: Very, very interesting. You know, we do a deal on The BusinessMakers Show called Idea Triggers; I love to discover what Founders used, what went through their minds when the idea to start this initiative occurred to them so your is a personal one. I think it's so interesting today that so many people, at least in my generation - I'm in my 60s, are all dealing with parents that are checking into assisted living places, but it always seems like it's a challenging business to me.
Patricia: It is a challenging business in that it - many people misconstrue the business, to be either a real estate business, a hospitality business or a healthcare business. When my bankers ask me which one we are, I simply say yes.
Russ: Great, that's fantastic. How many facilities are there now within Belmont Village?
Patricia: We've now built and operate and own 22 communities, the newest one here in Houston - which will be our second in Houston will be the 23rd.
Russ: My goodness. Have - on all of them did you actually but the land and build the facility?
Patricia: All but 2, so yes, as a practical matter and those 2 we remade which is actually harder than building.
Russ: Okay, okay. Describe the geographic locations of all of them.
Patricia: We began here in Houston about a mile from where I lived in West University at the time and a mile from the Texas Medical Center, which I understood - my partner and I understood very well as a result of spending time as medical developers and as board members of hospital systems here in Houston. We immediately migrated out of state but to other friendly places in the South where we were able to test our systems and our ability to bring our buildings together in a sustainable way; Nashville, Memphis, Louisville. We then realized that it would be a lot easier and more sensible to create critical mass in large markets that are deep and fairly well protected, so we entered both Chicago land and, Los Angeles, Northern California, Southern California all around the same time in the very early 2000s.
The bulk of our capacity is in the state of California; the Bay Area, Los Angeles we have 6 beautiful communities and 2 in San Diego, 4 in Chicago with a fifth right now in the making. So we're excited to be back in Texas, we just opened a community in - beautiful community in Turtle Creek in Dallas, in Westlake Hills in Austin, um, we are now finally expanded on the first community that we built - operating for 15 years - and it's interesting because the expansion that we created - another 13 units on top of 153 units - is all in memory care.
Russ: And that's in Houston?
Patricia: That's here in Houston at West University and it was just completed.
Russ: Okay. And this facility's kind of cool too.
Patricia: We're really excited to be building once again about a mile from where I live, this time in Hunter's Creek on Voss Road in Houston and even more excited to have finally opened our Preview Information Center. For those who are in Houston its right next to Carrabba's on Voss Road.
Russ: Okay, really nice place too. Okay, so you mentioned memory care; it seems like back in the beginning loss of memory, Dementia, was not nearly what is it today. What kind of percentage of your business is devoted now to memory care?
Patricia: When we began it was probably, uh, during the early years - the late 90s, early 2000s - 10, maximum 15%; today it's handily over a third of our business. Very important part of our business, we devote a lot of effort and energy to it and we are constantly looking for therapeutic innovation to help people whose memory is in decline stay with for as long as they can.
Russ: Absolutely, I guess it's the price you pay by living to be 80 or 90 these days.
Patricia: That's part of it, we simply didn't see the incidents of Dementia years ago because people didn't live long enough to show it. It is definitely primarily a disease of the elderly.
Russ: Right. When you described your expansion you mentioned we wanted to go into protected areas; what did you mean by that?
Patricia: Well, um, in general in the development community here in Houston and in most parts of the South, developers can never get a - enough of a good thing and there aren't significant development restrictions. So in our maiden voyage, although we had a great toehold on a very prime site in West University on Holocomb Blvd, it struck us
Russ: Okay Patricia, now I noticed when you described the expansion you talked about preferring protected markets, what did you mean by that?
Patricia: Well when we began in Houston we had a lot of confidence not so much in our ability to run assisted living, but in a site a mile from the Texas Medical Center here in Houston. As the category began to develop, we saw lots of expansion of all kinds of things here in Houston and, developers in Houston, in Texas and in general in the South - I don't know if you've ever read Tom Wolfe's A Man in Full but it's a great riff on developers who can never get enough of a good thing. In markets where it's relatively easy to buy land expand and - cities and get zoning you're not very protected.
And so we were concerned that people would begin to put up assisted living communities whether they could operate them or not - kind of like Blockbuster in expansion. Whereas going to very difficult markets to develop in; San Diego, Metropolitan Los Angeles, the San Francisco Bay Area, where places where we felt if we could eventually zone and the sites we could make multiple communities in a deep market which is good for scale, and at the same time face less people coming in across the street.
Russ: So the harder it is, the more you like it.
Patricia: Yes, we've been on a perpetual kamikaze mission with respect to side acquisitions, we still are.
Russ: Okay. All right, so when I think of the business though I like to really think about actual operations. And everything that I've ever been familiar with it was real important to have a great team, to have them highly motivated and like what they do. My experience at various assisted living facilities that I've been in, that seems like that would be difficult to keep the staff totally motivated and excited about the day to day activities.
Patricia: You've hit upon what is the critical success factor in our business, and honestly even today if you - as many people do - ask me what keeps me up at night, it's always the issue of people. Fortunately we recognize that from the get go and there are I call it the investment in the structure you can't see when I look at the investment that we've made in recruitment, in training and most of all in taking care of our people so that be - they - we become the employer of choice. This is a very hard business for line workers to work in, uh, and we ask a lot of them. We have an acronym for our caregivers that's called PALs; it stands for Personal Assistance Liaison. And if you really think about the caregiver who's going to help your mom in and out of the shower or to get to the dining room or to take her meds that day, you're thinking about a very intimate relationship relative to any other kind of service worker.
As a result, we have to recognize that we have to take care of our people in order for them to be able to take care of our parents. What that translates into is celebrations of success, incentives, good pay rates, training, recognition, recognition and more recognition best in class health benefits, uh, and in our case working very hard to be the primary employer. We have a lot of employees who work 2 jobs, we have a very low ratio of part time employees and to the extent that we have part time employees we try to be the employer that helps them in every way possible.
Russ: Sounds to me like you've got that part figured out.
Patricia: You never really figure it out because you can always do better and more, but I've got to tell you that I happen to know the stat fresh because we just did our employee award celebration and to score 85% employee satisfaction in this industry and have average tenure of over 4 years is pretty unheard of. It's something that we're very proud of.
Russ: I would believe that, I would believe that. It even seems like there's an emotional strain from working there. I mean you're working with people at the end of their lives, there is turnover there; I mean oh, you know, when I think about work and building teams and it's hard work and you're really - but it never includes that sort of challenge.
Patricia: Well, our employees are really extraordinary and they're pre-selected because of their proclivity to care so that's very helpful. I think really when you're dealing with the issue of mortality and the attachments that are developed senior to caregiver and caregiver to senior our employees take the lead from the seniors who have come to accept that everyday can be a good one, but also that everyday may be their last. They mourn one another but they then in the aftermath celebrate one another, take care of their neighbor's pets as though they were theirs and our employees see that and have a tendency yes, to cry and to mourn, but also to do just the same as the seniors that they're working with and for.
Russ: Wow, really cool. So, back to the beginning when I described this category as explosive growth, as my generation, enters the game as patients, my goodness, what does the future look like for Belmont Village?
Patricia: Well we could not be more excited than we are today about the future. The difficult part for us was during a period of non-explosive growth, to formulate how to do this and develop the platform and the people who know how to do it and frankly who can succeed me. The future if you just look at the demand curve is going to be extraordinary. We have probably 25 million seniors today if you define seniors as people over 65. There's another 10,000 entering that category everyday and we're headed toward somewhere between 80 and 100 million by the time you and I are 100. That's an extraordinary demand curve out there.
Russ: It really is. Well look, I really appreciate you sharing the story about
Russ: Well Patricia I really appreciate you sharing the story of Belmont Village with us.
Patricia: I appreciate being here; I love to talk about the business. As you can tell I'm pretty excited about what I do.
Russ: I can tell for sure. All right, and that wraps up my discussion with Patricia Will, the Founder and CEO of Belmont Village. And this is The BusinessMakers Show, heard on the radio and seen online at TheBusinessMakers.com.