Q&A: Brightview Senior Living’s CEO on Hiring Strategies, the Urban Push

Marilynn Duker, CEO, Brightview Senior Living  Image courtesy of Brightview Senior Living

Since opening its first community 20 years ago, Brightview Senior Living has established itself as a leading developer and operator of independent and assisted living and dementia care facilities across eight Mid-Atlantic and Northeast states. The company, based in Baltimore, will open its 40^th community by the end of 2019 and intends to continue opening three to five new communities annually. 

Marilynn Duker, CEO of Brightview, has spent much of her 27 years in the real estate business focused on the firm’s success. After completing a presidential internship for the U.S. Department of Housing and Urban Development, she joined forces with a lawyer-turned-developer and began developing affordable, market- rate and mixed-income communities. The partnership soon added a property management arm that at one time oversaw some 22,000 units for clients. Eventually, the business expanded into senior housing and gradually disposed of the property management operation and apartments.

Tell us how Brightview began and why senior living appeals to you.

Duker: Senior living is really an operating business that happens to have real estate as a platform, so it’s much different than other real estate asset classes. Arnie Richman, who had built and ran a large nursing home company, joined us in the 1990s and brought the operating experience, and we had the development platform.

While we have grown significantly over the last 20 years, getting to scale wasn’t a big goal. Instead, it has always been about providing a high-quality experience to our residents. We have a lot of control over our destiny, too. The four business partners have owned 10 percent of every equity fund we’ve raised, and we have had tremendous repeat investment. (Brightview’s first fundraising effort in the 1990s attracted about $6 million.) Its most recent fund in 2017 topped out at $200 million. We know all of our investors and are under no obligation to ever sell communities, which is unlike other capital in the industry.

What is the most rewarding part of senior housing?

Duker: We’re offering people new possibilities and choices, often at a time when they are vulnerable and are feeling increased limitations in their lives. Tenants, on average, are 84 when they move in and often have had some type of event that is motivating them to make the move, such as the death of a spouse, the inability to take care of a house, or a fall. It’s also a business where we can really differentiate ourselves by our people and the relationships they form with our residents.

What are the biggest challenges you face?

Duker: Just as people are our greatest strength and differentiator, finding qualified employees in a tight labor market poses the biggest challenge. As we’ve scaled to eight states, we have more than 300 department heads and directors hiring housekeepers, resident care assistants, dining room staff and other frontline associates who work with residents everyday. As we’ve grown, we’ve focused on ensuring that all of those 300 people truly live and breathe Brightview’s culture and can assess whether a candidate has what it takes to be successful.

I also think that we’re in the toughest labor market anyone has every faced in the U.S. because of demographics. At the same time, a strong economy is driving up wages and making it difficult to find people. Six or seven years ago, people were walking in the door looking for work. Now we have to go find them. Additionally, construction costs have been significantly greater than the rate of inflation for five years now, and that means our projects cost more, so our rates have to be higher.

Tell us about SPICE.

Duker: SPICE is our model of spiritual, physical, intellectual, cultural and emotional wellness, and it is a construct of how we design of our physical spaces and program our service offerings. It applies to residents and associates, and every community includes all of its aspects. There is a lot of sharing of best practices across the portfolio, but what SPICE looks like is unique and specific to each community and is up to a team of residents.

From an associate standpoint, about eight years we decided to get our health care costs under control, so we hired a full-time manager to focus on wellness. Her work has helped us keep health insurance cost increases for our associates at less than 2 percent for several years now, and in 2019 we saw no increase. But we have also maintained a rich benefits package, which is important in attracting and retaining good associates.

Brightview’s portfolio extends from Virginia to Massachusetts. What do you like about your markets, and how would you characterize their fundamentals?

Duker: They are marked by high-density and high wealth, and they have high barriers to entry – there’s not a lot of land and it’s very hard to get zoning and entitlements approved. It makes supply somewhat more predictable than if we were building in, say, Texas or Atlanta.

But both national and regional players understand why these are good markets, and we have seen an increasing amount of supply in the last couple of years. Plentiful capital drives supply, too. There’s a lot of equity capital—frankly way too much—for our sector right now from pension funds, private equity, REITs and others. In the long run, there’s plenty of demand to absorb what’s coming. But in the short term there’s certainly some potential for pressure on occupancy rates.

In Maryland, Brightview West End in Rockville and Brightview Bethesda Woodmont recently won design awards for communities in mixed-use settings. Should we expect to see more of these communities?

Duker: We spend a lot of time thinking about what customers in five or 10 years are going to want. While suburban communities are fine and beautiful, aging baby boomers are likely to want walkable neighborhoods with a main street in a mixed-use setting. I myself would want to live in a West End type of environment. So we have a plan to develop more of these types of communities. We are building one at Innovation Center, a new transit-oriented-development in Northern Virginia. We also opened another in the heart of downtown Wakefield, Mass., and it filled incredibly quickly.

How do you market to potential residents?

Duker: Ten years ago, somebody would drive by a community, see our sign and call us—that was our biggest source of leads. Now people do research on the internet. We’ve invested a lot to drive traffic to our website, including videos featuring leadership and associates that are designed to give prospects a good sense of who we are. As a result, we’ve seen a dramatic increase in in the number of quality internet leads.

We’ve also been moving away from third-party referral services and instead are sending our own folks into the community. That includes getting involved in community events and organizations, but also working with hospital discharge planners and estate planning lawyers. We often invite community groups to hold meetings in our communities, which gets people in the door and clears up a lot of misperceptions about what senior living is. This year, our leads are up 9 percent over last year, and our occupancy and deposits are up, so we feel really good about the steps we’ve taken.