Watercrest Senior Living Group is keeping itself busy, despite the economic uncertainty we’re living in. Over the past few months, the company broke ground on two senior housing developments—one in Macon, Ga., and one in Myrtle Beach, S.C. Earlier in August, they opened a 107-unit luxury community in Indian Land, S.C. Watercrest’s new community development pipeline is approaching $500 million and more than 30 properties throughout the Southeast.
Principal and CEO Marc Vorkapich brings roughly 20 years of experience to the industry. He talks about the measures the company took to ensure the safety of staff and the residents who are in a more vulnerable age segment. He also shares details about how the pandemic changed his development strategy.
READ ALSO: Dealing With COVID-19 in Senior Housing
Earlier in August, you teamed up with Waypoint Residential to open Watercrest Fort Mill-Indian Land Assisted Living and Memory Care. What have you done to ensure the safety of both residents and staff at this property?
Vorkapich: All new hires are tested prior to starting, and, as an extra layer of precaution we test our associates every two weeks. Additionally, all associates are screened and their temperatures taken prior to the start of their shift. Our associates are required to wear masks as well as our residents if they are outside of their apartment.
All new residents are required to provide proof of a negative test within seven days prior to moving in. To ensure social distancing in the community, we have limited the number of move-ins per day, required movers to be screened and to wear masks, and limited movers to bringing large items only. Our own team assisted residents with unpacking and getting moved in, in order to limit the exposure to the community.
Exercising an abundance of caution, residents are screened daily, along with taking their temperatures and oxygen saturation levels twice a day. We are providing modified dining and modified programming, limiting the number of people in the dining room and at programs to further ensure social distancing. Our teams follow specific procedures promoting safety during these daily events.
You recently broke ground on two communities in Macon, Ga., and Myrtle Beach, S.C. How has your development strategy changed due to the health crisis?
Vorkapich: As a result of the pandemic, equity investor interest has slipped from record highs to moderate levels. The impact on overall occupancy levels, let alone the potential for slowed fill-up of pre-stabilized communities, warrants a pause for thorough study and stress testing of financial performance indicators. Never has it been more critical for seasoned, regional operators to lead the way in providing clarity regarding cost containment, market differentiation and actual service delivery.
Are there any special features the upcoming properties will include to ensure the safety of residents in the post-COVID-19 era?
Vorkapich: Absolutely. We’ve stepped forward and invested heavily in implementing Global Plasma Solutions ionization filters in the interest of decreasing the number of pathogens in the air, thus helping seniors stay healthy. Installation of these self-cleaning units will reduce the amount of outside air needed to treat indoor spaces, kill airborne pathogens and reduce the level of odor-causing VOCs, improving air quality. Third-party testing has demonstrated kill rates above 93 percent of Norovirus, 96 percent of MSRA and Staphylococcus and 99 percent of E. coli and Legionella pathogens. This is yet another precaution we are taking to care for our most vulnerable population. How much has the coronavirus situation impacted occupancy at your properties? How do you see it evolving going forward?
Vorkapich: Occupancy impacts have varied quite a bit from market to market. What has been consistent is the specific impact the restrictions on visitation have had on seniors deciding to wait to see their loved ones upon taking up residence in assisted living. As normal attrition continued from March through August, the delay in move-ins has been realized as a 4-percent decrease overall. With visitation changes having just been made in both South Carolina and Florida, we are optimistic that we will start seeing people become more comfortable with moving in their loved ones.
Please describe the main trends you anticipate in the senior housing sector next year and beyond.
Vorkapich: There is an increased awareness and understanding of the importance of having a highly competent operations management team laser-focused on the resident, family and associate experience. For many communities, increased needs due to the pandemic will result in dramatic cost increases that are unsustainable, or the reduction of services deemed less essential. Community offerings and levels of service post-pandemic are likely to widen the divide between providers largely due to management’s ability or inability to cost contain while improving the personalization and warmth of service delivery.
Regional operators stand to gain market share as distressed property sales increase and smaller operators and/or larger hierarchical providers are replaced by regional platforms that offer the benefit of scaled economies as well as the increasingly critical personalized experience.
Considering new developments of assisted living and memory care communities, the pandemic should have acted as a wake-up call for non-senior living industry stakeholders looking to enter the market. Although equity interest has been on pause, the smart money remains steadfast in pursuing the opportunity that lies in underwriting these deals as operational rather than real estate. As unprecedented demographics labeled the silver tsunami rapidly approach, the pandemic just may turn out to be the psychological barrier to entry needed to thwart concerns of the potential for market oversaturation.
What worries you about the senior housing sector?
Vorkapich: What is unique about senior living is that the business challenges are far outweighed by the purpose of the work. Honoring our fathers and mothers, brings with it the expectation that people with deep-rooted values are equipped and available to care for them in their most vulnerable years. As we look towards the coming century in senior housing the challenge of these times will undoubtedly be in attracting and retaining our world’s most admirable caretakers to the field in the numbers needed to support such a significant demographic shift.
What are your business plans going forward?
Vorkapich: Our development pipeline remains robust, as we anticipate two or three additional construction starts over the next six months, subsequently opening the doors to care for more seniors than ever before.