Charter Senior Living Ceo: We’re Hoping Growth ‘floodgates’ Finally Open In 2025 

Charter Senior Living CEO Keven Bennema believes that 2025 could be the year that developers and operators kick into much higher gear with regard to new growth, and the company is readying itself accordingly.

For now, the senior living industry is still in a tougher spot with regard to new supply. A cross-current of a few trends have made growth via new development relatively hard and the time needed for opening a new project has grown in the last few years. According to recent NIC MAP Vision data, the senior living industry must develop communities 3.5 times faster than present day to meet demand by 2030.

That said, Bennema is optimistic about the road ahead in 2025, and he hopes to see a torrent of opportunities next year that finally put the industry on a better footing with regard to new growth.

The U.S. Federal Reserve lowered interest rates by 50 basis points in September. Although it’s not clear when another rate cut could come, further movement on that front could free up money for new deals in the near-future.

“I’m hoping that sometime in ‘25, the lenders will start feeling comfortable to really dig into really good projects,” Bennema said during a panel discussion at the Senior Housing News BUILD conference on Wednesday in Chicago.

He is specifically optimistic that savvy operators and their partners will be able to pick up communities that were subject to “broken deals that were created pre-Covid.”

In the meantime, Charter Senior Living is not sitting on its laurels or waiting for the market to turn. The Naperville, Illinois-based senior living operator this year opened eight senior living communities, and it currently has three others under construction. Bennema said the company also has a “nice pipeline of other projects” underway. In total, the company manages 65 communities.

Bennema is a proponent of operators doing their “homework” to find markets ripe for new-development growth. In fact, said he would “rather take my chance on a new development” over an acquisition deal that equaled replacement costs.

“You may have to spend a little more out of the gate, but I think the longer-term return could equal or be close to what you could pick up one of those acquisitions,” he said.

Looking ahead to 2025, Bennema is optimistic that these and other trends will cause the “floodgates to open” with regard to new industry growth.

‘You have to challenge any assumptions’

When undertaking any new development project in a new market, Bennema and Charter believe that scrutiny is the name of the game. The operator takes a “very deep dive” into local demographics, economic and potential competitors before any new deal in an unfamiliar locale, Bennema said.

He attributed part of the company’s success with growth to “very strong development partners” that help with site selection, which he says is critical to the process for keeping costs down.

“You have to be very thoughtful, and you have to challenge any assumptions you may think you have about various markets, where they used to be and where they could be,” Bennema said.

Charter has challenged assumptions in part by focusing on secondary and tertiary markets where senior living growth has been relatively limited, like White House, Tennessee; and not in major metro areas, like Chicago. Charter focuses its efforts on those markets in part due to the lower cost of land and staffing. Higher-barrier-to-entry markets also would require charging “very good rates” in order to make some senior living projects pencil out.

“You have to charge $6,000, $7,000, $8,000, $9,000,” he said. “In some of these other smaller markets, you can charge less than that and still make a respectable margin.”

Charter also can generate “tremendous excitement” when bringing new projects into smaller communities, particularly off of a major roadway in a small town, Bennema said

But site selection in smaller markets does involve some tedium, he added.

“Just because you think you found a piece of land that may make some sense, there’s a whole lot of other things you need to do to mitigate that land,” Bennema said. “Is the land buildable? Are there liens on the land? …You have no idea what other skeletons may be attached to trying to get that done.”

SHN Senior Editor Tim Regan (left) and Charter Senior Living CEO Keven Bennema; photo by Merz Photography SHN Senior Editor Tim Regan (left) and Charter Senior Living CEO Keven Bennema; photo by Merz Photography

Additionally, Bennema suggests that other senior living developers have to “really do their homework” and get boots on the ground to meet with local businesses. Once construction begins, Bennema said Charter looks to “get a sign up quickly” to help build buzz among locals.

Residents in smaller markets have home equity and additional funding sources, such as pensions, that allow them to afford senior living services, he added.

While not necessarily easier than other kinds of markets, Bennema said the company has been successful with recruitment in secondary markets despite fewer potential workers to choose from.

“We find that we’re getting better applicants and people who want to show up and do the interviews,” Bennema said.

When seeking new growth in the new year, one thing senior living companies should not do is assume the industry will be the same as it was four or five years ago.

“The returns that you’re getting these days are nothing like they were pre-Covid,” he said.

Cautious optimism about 2025

Like many other senior living leaders, Bennema is optimistic about the prospect of growing in 2025. But the new year is still clouded in some uncertainty despite that optimism.

For one, lending challenges are still lingering, and the state of financing is “not where it needs to be” heading into 2025. While interest rates have declined, that hasn’t necessarily translated into lower rates for new projects, he said.

That said, Charter is currently sourcing programmatic equity and “passing around the hat” so investors can contribute in piecemeal.

“The projects we’ve done are certainly not inexpensive, but they’ve been very attractive for folks that want to contribute,” he Bennema said. “It’s more affordable than you would think to be an investor.”

In the year ahead, Bennema is hopeful that conditions become such that lenders and capital sources once again strike new deals. And he sees “tremendous capital sitting on the sidelines” just waiting to be deployed into the senior living industry.

The incoming administration of President-Elect Donald Trump also is a source of uncertainty. Two areas in particular – tariffs and the prospect of mass deportation of U.S. migrants – could complicate senior living plans in 2025. Part of the issue is that the administration has not clearly defined these potential actions or how severe they may be.

At the moment, Bennema said he is uncertain about how any potential tariffs from the incoming Trump administration could affect new development. On the topic of deportations, Bennema also is unsure, though he believes they could present problems for the industry if they are widespread and disruptive.

“Many folks that we have working for us could have [affected] family members … and it could be very disruptive to their home life. There could be other secondary types of issues created,” he said.

Still, putting all of the pieces together, Bennema said he is still feeling cautiously good about the year ahead, despite some looming uncertainty. 

“There is going to be, I think, a tremendous amount of deals [and] development opportunities, probably more toward mid- to later-2025,” he said.

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