Heritage Communities Shifts To Third-party Management In New Growth Push

Heritage Communities is accelerating its growth plans for the coming year with a particular focus on expanding by taking on new management contracts with partners.

The Omaha, Nebraska-based company in 2024 acquired its first set of management contracts after 20 years of both owning and operating its communities. Now, it is seeking new partners to add as many as 10 new contracts in 2025, in addition to at least one new development project.

The company started managing two communities for American Healthcare REIT in March, and it has since made other organizational changes to continue its pace of growth in 2025, including naming a chief marketing officer and vice president of customer experience.

Although CEO Farhan Khan said he has always been cautious about increasing the company’s footprint too quickly, he believes Heritage now has the bench strength and numerous opportunities to bring more scale to its operations.

“We’ve geared ourselves up so that we can do this,” Khan told Senior Housing News.

Heritage staffs up for growth

Heritage is in 2025 “beefing up” its staff by offering new training, particularly for leadership positions within communities, Khan said. The operator is working with the Stagen Leadership Academy, a leadership consultancy based out of Dallas, Texas, to help frontline staff gain skills they need to be more effective at their jobs. That training has already paid dividends by helping reduce turnover by 15% across the company in 2024.

In addition to helping keep executive directors from straying to other companies, Khan added the training programs have given them tools to better manage their employees.

The company is pairing its new training with a handful of new leadership announcements. The operator promoted Lacy Jungman to the role of chief marketing officer, and she is tasked with managing the company’s brand awareness, new community acquisition and marketing strategy and research.

Heritage also promoted Erin Albers to the role of vice president of experience, where she is slated to help improve the company’s customer experience by leading projects related to dining, life enrichment and memory care and bolstering employee satisfaction and communication.

Heritage is still in the process of building out its leadership bench in 2025. The company is actively searching for a new vice president of operations to help support its regional teams and lead policies, practices, standards and security measures. Beyond that, Khan said the operator will continue to develop leadership as it grows and evolves to support its new planned growth.

“For us to scale those proven processes across multiple communities, I think it’s an easier lift for us now,” he said.

‘It should be a good year’

Like some other senior living leaders, Khan is looking to the new year with optimism, especially now that he sees the company’s “Covid hangover” quickly fading in 2025.

Heritage Communities grew its occupancy by four percentage points to an average of 90.5% in 2024, and Khan believes that new investments in technology can increase its census even further in 2025. The company plans to bring in a consultant in the summer to take stock and offer advice on its current technology stack.

Also aiding Heritage in 2025 is the fact that cost inflation of certain goods and services is not as high as it was in the past, while the senior living labor market has stabilized, Khan said. Provided it can continue to add occupancy and manage its expenses, that should aid Heritage’s operating margin in the months and years ahead.

With the wind at its back, Heritage plans to continue growing in the year ahead. In addition to securing new management contracts, the operator is still growing via new development, with one project slated to begin construction before the end of the year.

In the past, Heritage also grew by expanding programs such as home health care and aging-in-place services in states like Nebraska, Iowa and Arizona and Texas. Khan said he wants to continue to grow these programs through partnerships with additional partners in the states where it already has a footprint.

Looking ahead to the rest of the year, Heritage Communities hopes to secure 10 additional management contracts in 2025. The company is also exploring additional acquisition opportunities to grow its portfolio of owned properties.

While it has 17 communities in Nebraska, Iowa, Texas and Arizona, Khan said the company could soon also grow its geographic footprint to include more managed communities in surrounding states.

Taking on new management contracts is not always easy, as many operators can attest. Doing so requires transparency, and to that end, Heritage has gotten accustomed to sharing financial information with its real estate investment trust partner. Even so, it did not have to change much of its operating model – a sign to Khan that its approach is ready to scale up even further.

“For 2025, I think if we implement our strategies, it should be a good year,” he added.

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