Communication, coaching, and life lessons, Jesse Marinko, CEO and Founder of Phoenix Senior Living and Partners Development Group. He shares why an alignment of partners, discipline in portfolio growth, and data review are essential for productive and innovative operations.
Joshua Crisp, Founder and CEO, Solinity;Senior Living Development, Management, Marketing and Consulting.
Transcripts
Intro
Welcome to season eight of Bridge The Gap, a podcast dedicated to informing, educating, and influencing the future of housing and services for seniors. Powered by sponsors Aline, NIC MAP, Procare HR, Sage, Hamilton CapTel, Service Master, The Bridge Group Construction and Solinity. Produced by Solinity Marketing. Bridge the gap in three, two.
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Lucas McCurdy
Welcome to Bridge the Gap podcast, the senior living podcast with Josh and Lucas. We are here at the Arizona Biltmore at the winter meeting for ASHA, and we got a great guest on today. We wanna welcome Jesse Marinko, CEO of Phoenix Senior Living. Welcome to the show.
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Jesse Marinko
Thanks for having me, guys. Really appreciate being here.
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Lucas McCurdy
So glad that you're here. Thanks for taking time with us. And we are really excited about kicking off a great membership meeting. Why do you come to the membership meetings?
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Jesse Marinko
Well, obviously the location doesn't hurt and the weather. As always, ASHA does a great job picking some of the best locations. But in all honesty, ASHA, Argentum, and NIC, they're extremely important organizations for us to get behind and support. Come out here obviously, to network with a lot of colleagues. You guys know this is a very small industry. Some would call it incestuous. But just a really good time to come out and validate what you think of the future is going to be and then collaborate with others and kind of see what their thoughts are on the future. And, you know, just really brainstorming some fellowship.
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Lucas McCurdy
You started Phoenix Senior Living out of Atlanta, right?
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Jesse Marinko
Atlanta, Georgia.
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Lucas McCurdy
Atlanta about ten years ago and why did you start?
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Jesse Marinko
So, you know, at the end of the day, I give the analogy. I'm really just a football coach. Right. Like that's when I got to serve in this industry. I was playing college football. And my mom talked me into an internship with senior housing. And I think one of the things that grabbed me the most as a 20 something who didn't know anything from anything. I loved the fact that I was able to work within someone's home and serve and learn about these amazing lives, but in all reality, what truly drew me to this industry for a career were the associates. I mean, these servant leaders are people that, when there's a fire, they run to this place, not their home.
When there's a storm, they run away from their home and come serve others. And so, as someone who thinks it's very important to get your associates resources and tools and things they need to deliver on the best quality of care, I really looked at this industry and said, what a great opportunity to build a team and a platform that allows people to give great care in great housing settings, and serve arguably the greatest generation in history.
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Josh Crisp
Over the last ten years, you have done a lot. You guys have accomplished so much, through some pretty tough times. Over the last ten years, our industry has experienced, and as of recent, there's some big announcements, with some promotions and things like that within your organization. So, give us a little bit of an update on, you know, this post-Covid era, where are you positioning Phoenix for kind of the leadership structure you've recently announced?
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Jesse Marinko
ough and we grew great before:
And we've made mistakes that were honest and pure in intent. But just at the time, with the circumstances, it didn't work out. Whether it be a personnel decision, whether it be a structured decision, whether it be a company vision decision. And I think the first thing is like we kind of joke in life, you got to admit there's a problem. Right? And so I think acknowledging that was the opportunity that came out of Covid and inflation and the labor crisis and all of that. I think allowing those opportunities to force us to look at our business differently. And who do we want to serve? Who do we want to partner with? You know, the biggest thing I can tell you is just realizing who's really in this industry for the right reasons. We had some great partners that hunkered down with us, you know, got in the trenches with us and fought through, Renew being one of them. It really showed the people that are in this business for the long haul. As you talk about prime for the future, I'm a big believer. I think we're about to have a 3 to 5, possibly 8 year run of potentially the greatest run in senior housing.
With the demand coming up, interest rates and construction costs kind of stymieing development right now, we're going to continue to see record absorption, which has been clearly articulated in the NIC data – repeatedly quarter after quarter. And with no new product coming in, I think we're really primed to get at some point when it makes sense for development to get back on the hurdle. But right now there's good opportunities where it makes sense, where you want to grow and it aligns with your strategy. We want to grow with the right partners in the right way, not necessarily always a size thing, just where our strategy aligns.
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Josh Crisp
So what are you bullish on? You know we're hearing a lot of people that you know development stalled or it's a waiting game. Is it an acquisition? What are you guys looking at over the next couple of years?
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Jesse Marinko
We were fortunate enough last year to do three acquisitions, which was great in a really tough market. I think that just speaks to our partnerships and alignment. This year. We're probably looking to do some more acquisitions that make sense. I'm hoping to get a few across the goal line. But there is a lot of road between here and there to get there.
We were in the midst of:
You know, I've been caught in other things, like 800,000 jobs needed for grades. You know, the number for demographics and seniors. Retiring is unfathomable. And I know, as crazy as it sounds, we don't have enough beds today to service the population in the next five, eight, ten years. And so that's going to be a problem, as an industry. We have to address.
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Josh Crisp
Well, I would love to know. I always appreciate when I've heard you speak on a variety of different platforms through the years. You're just really a straight shooter. I really appreciate that about you. We do have awesome opportunities. When you look at the demographic growth on who we can serve, and then you've got this daunting already staff shortage, labor shortage.
Do you have any strategies or things that you've got an eye on or you think will work as you're still looking to grow? The, the, the industry can look to, to help meet some of those staffing needs. I mean, how are you all going to approach that? Well, like, what's the strategy to be able to staff these places?
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Jesse Marinko
Well, the good news is we've had this problem in this industry since the 80s and 90s, and it's just got the spotlight on it now. This is a people intensive business, and it's a hard business, you know, 24/7, 365 all year round. And you're serving people and, in many markets, sometimes you can get better pay down the street in a totally different sector, and you won't get the service and the reward and the gratitude that you get from our industry.
So I think all those problems are still there. And I wish I had this great, super sexy answer that was like, this is the revelation. But what it really comes down to is an investment in the HR Training and Development department. And I think so many times in a lot of organizations, that's the last department you build out, because it's the one that you struggle with an ROI analysis, you struggle attaching revenue and things to it.
But when you really look at the retention numbers and you really look at the ability to grow within, you know, that's something we've really prided ourselves on. Phoenix by no means have we solved it. But, you know, if you go back and track, but the ten year record of our staff, I mean, I think we've got three people who are CEOs and other companies that were VP's or RDO's in our company, and multiple people who are EDs that are RDO’s or VP's in another company.
And that's just part of it. You can't stop the development process just because they're not in your shop. You invest in the people, you treat them well enough, and you hope they stay. And if they don't, you wish them well, right? This is a small industry. You don't want to burn bridges. And this is one that you want to make sure that you stay in alignment. So I really think it's the career maps. It's the training and development. I also think it's your touch points.
I think in anything communication is key. And I think when your staff's not getting communicated to, they're always going to go to the worst place. It's human nature. Right. And so I think the biggest thing I always try to urge is whether it's a good message or a bad message, get it to your staff, communicate, and we'll solve it together as a family.
Mid Roll
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Josh Crisp
That's a really, really good insight. You've learned some very valuable lessons, done a lot of great things. You've made some mistakes and admitted that. What are some of those things that stick out to you? You think, oh, that was a learning lesson. That was something I learned the hard way and that but that was something that you turned into a valuable lesson that you grew from moving ahead. And the reason why I asked that, I don't know if you experienced this, but I'm seeing so many new operators pop up. I mean, it seems like every week I'm hearing of a new operator, and a lot of them are folks I've never heard from before.
It's not people that I've seen come up through the industry and with the opportunities that are ahead for us, which I agree with you, I think there's so many great opportunities. I think so many of the leaders like yourself have learned some of the hard lessons from out there trailblazing. So we have a real opportunity to help some of those folks avoid the same mistakes. So what would be a lesson or two you could give on that?
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Jesse Marinko
had partners that I went into:
So this space has had pretty much a darling run since the 80s with a few blips. I mean, even ‘08 for our space wasn't really that bad, you know? And as you look at the first nuke that came in and really dropped huge occupancies, you saw some people get out of the boat real fast.
And so I think, just be aware of that tourist capital, be aware. If you haven't done a wrap in the space, I'd do some extra measuring. Is everyone aligned or we all pointed at the same goal post. Do we all want the same thing or are we being honest with each other? If this thing gets bad, what are we all going to do? Where's the next set of cash going to come from? And I think for a lot of new operators, it's really, really hard to be disciplined and say no to growth. And I'm someone who said yes to growth at times when I probably should have said no.
And that's okay. And you learn from it. And now when you sit down with partners, it's a little bit longer of a conversation. It's a little bit deeper, stare in the eye, you know, and we're asking the questions that you kind of don't want to ask when you need growth. You know, where's the reserve from? How much does this fund have? Is it a closed fund? Is it an open fund? You know, how many deals do you guys have? How long are you committed to senior housing? Is this a trial phase? So I think there's a lot of capital alignment that is just so important in this industry. In partners in general, it goes beyond that. So that would be a huge learning curve I would share with any new operator that's out there.
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Josh Crisp
Great insight. Okay. So for the foreseeable future, we're talking about new development or acquisitions, repositions,or whatever you're doing. The existing product that has been built over the last 10, 15, 20 years, do you see that as still relevant or does it completely over the next 5 to 10 years, have to be repositioned, or is it is it still going to be relevant to the market that we're going to be having come in senior living?
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Jesse Marinko
nose at anything kind of pre:
And I think, you know, this, this industry, you know, a lot of active adult apartments in the 80s got converted IL, and then IL’s got converted to AL memory cares because the rate keeps going up and the margin goes down. But you get more in a way. So it justifies and you see a creative growth. At some point you hit the end of the line. And so I think for some of the products, like the one we were able to pull off in Marietta, we were able to grab it at the right basis. We loved the market, we understood the need, and there was a huge lack of active adult there. And we were lucky enough to have an opportunity to convert, you know, class a historic, AL memory care that had struggled for a long time in the market due to so much new product coming in, repositioning in the right way and renovating it and and putting it to a use that has a long term sustainability. And it's kind of funny. All we're doing is just take the thing back left on the continuum and what in 30 years will probably make it AL memory again.
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Josh Crisp
So is active adult. Would you say that would be an area you would be very focused on, or is it just more market by market?
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Jesse Marinko
I definitely want to say real estate is always a micro game. When you take a macro strategy to real estate, it burns you. You get a lot of lost dollars. So I think from a micro strategy, it's always going to come down to that. I do think active adult and IL are going to be attractive entry points for the next consumer.
I think with the age of move ins. I remember 15 years ago the average age of move-in was 75, 76, 77. We're up to 83 now in AL memory care with length of days, shortening every year. So as you look through all those statistics and you look at people who are going to be downsizing from 5,000 square foot homes that have lived very full lifestyles. They're going to want something that gives them options in the future, which is really going to mean the lowest possible price point they can come in that doesn't have a huge adjustment to their lifestyle.
So I think as you think about an active adult community or an ideal is going to be the easiest transition for, I think, the next wave of seniors. And so I'm bullish on it, but the needs will be out there and they'll be market driven. You know, I think in some of those secondary tertiary markets, there's still a major under bed available memory care beds. And there are service needs that are out there. I think in a lot of the metro markets you might see more active adult or full service campus plays. We're partial to the full service campuses like the one we did out in Auburn in Opelika. We just think that allows families to envision mom aging gracefully with all the needed services she would have around them. And so that's us. That's our bullish point. But, you know, we're open to all.
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Josh Crisp
Lucas. ASHA, what an opportunity. We get to sit down with folks, like this. And it's something that our audience loves and gets an opportunity to hear folks like Jesse talk about, the lessons they've learned and things like that. What a great opportunity.
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Lucas McCurdy
It's good. I'm taking notes just listening to you guys. Okay, so to round out, I don't want to miss out on asking you about technology. You know, years ago. Josh, remember we had the very famous Bob Kramer on and he coined the phrase, high tech, high touch. And he's always such a great mind in our space and has been for so many years.
Technology is clearly emerging into the space in a big way, especially after Covid. And I think that there's a great conversation around this. But, just as you said, Jesse, like Jesse, there's a culture that needs to be developed. And this is a people business, too. So how do you balance out, kind of vetting out what new technologies are actually going to help you run your company while not also losing that human touch?
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Jesse Marinko
It's a great question. And it's a hard balancing act. You can get into analysis paralysis where you do nothing. You're staring at data. I say to my team all the time, love the data. What does it mean? What are we going to do with it? What's the action? What's the next step that this data told us? But I think it's also aligning with partners, whether it be like a PalCare that used to be a very blanket technology, which was a nurse call. So super functional. I press a button, mom gets help, I help mom, we move on. Well, you just lost so many data points. Why did mom need help?
How long were they in there? How many calls have occurred? You just take data that was already available and allow your teams and yourselves, whether it be through AI or whether it be through Power BI or whatever platform an operator chooses, being able to take that data and then have actionable steps, sitting down with Susie's mom or daughter and saying, hey, listen, I know this is a hard conversation.
The care level has to change, but I actually have data to tell you we're giving more care. And, you know, Margie, she gives unbelievable care and she loves your mom. And so for us to get more hours on the floor to support this is what we have to do. Totally different conversation than, hey, I just think your mom needs more care, right?
Which, you know, you gotta remember, these family members are struggling with the aging process already. So when you're able to take data that helps to kind of desensitize the situation, helps to put it in an objective format. And I think it allows us to charge the appropriate levels we need in order to put up the care and the staff.
And that's one small trinket. I mean, there are operators out there doing amazing stuff with fall detection software. There's just a lot of great things out there. And so, you know, one of the other ways that we try to be very wise about it is because if you've heard an operator say once, hey, we've got this new rollout going, and then a year later, “How’d the rollout go?” It was horrible. I don't know what happened. Like technology is not working. And it's like, okay, guys, we have to remember this is a dance between two people. It's never the tech's fault and it's never the operator's fault. It's both your fault. You probably didn't roll it out right. You probably didn't know that, right? You probably didn't train it right. And you probably tried to do it on a scale you had no business doing it on.
So that's why the word pilot is super important. Anytime you're going to use a tech like go out, try it in one place, make a bunch of mistakes, learn what's wrong, and if you directionally are moving in the right direction, okay, now roll it out in another place and then maybe four and then maybe five. I mean, never in life has anybody ever regretted facing anything, right? Whether it be a development, whether it be a rollout, whether it be someone's career map, whatever it is, you know, the building blocks are important. So I think that's a huge loss. And we've learned because we've done a lot of rollouts that have not worked. And the ones that have really were a true partnership where we both learned along the way.
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Lucas McCurdy
That's very practical information.
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Josh Crisp
Yeah, very wise counsel as well. And so again, great information. Jesse, thank you, for making time for us. I know you're in big demand here. At any event that you go to and I know our listeners, appreciate it and add value to the industry. So appreciate your investment for so long and excited to watch the growth for the next ten years.
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Jesse Marinko
I appreciate it. I appreciate what you guys are doing for the industry, and spreading awareness. I appreciate everything you guys do.
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Lucas McCurdy
Awesome. Thank you. You've been on our list a long time. We did it. We got Jesse on the podcast. Great conversation. And for our listeners that want to learn more, you can get a btgvoice.com. You can click this content and so much more. Connect with us on LinkedIn. We'd love to hear your thoughts. And thanks for listening to another great episode of Bridge the Gap.
Outro
Thanks for listening to Bridge the Gap podcast with Josh and Lucas. Connect with the BTG network team and use your voice to influence the industry by connecting with us at btgvoice.com.
