Shn Build: Inside Current And Future Resident Trends: Developing Innovative Senior Living For A New Era

This article is sponsored by LCS Development. This article is based on a discussion with Chuck Murphy, Executive Vice President of LCS Development. This discussion took place on November 20th, 2024 at the SHN BUILD conference.

Senior Housing News: Chuck Murphy leads the team at LCS Development, which is part of the LCS Family of Companies, which of course includes Life Care Services, one of the largest senior living operators in the country.

As we’re looking ahead to the boomers and beyond, how are you planning for and, like I said, anticipating the needs of this incoming wave of residents?

Chuck Murphy: The real issue for LCS, we’re a broad-based, integrated senior living company, so we own, we develop and we operate. I lead the development team. We have our own captive insurance company and group purchasing platform, so we’re all about senior living for over 50 years.

We take an integrated approach to how we’re thinking about the future. The key to planning for the future is understanding and utilizing our data. We started our own data analytics function with a team of data scientists over the last several years. We serve 40,000 residents across the country every day, and so our ability to delve into what they do, what they like, what they’re hoping to do differently, and how they’re thinking about the future is a key driver for how we think about our business and how we serve seniors.

SHN: I think it’s fair to say LCS strives to be innovative. I imagine that you’re taking this data and pursuing some new ideas. Can you share some of the approaches that maybe you think are more innovative to meet current and future residents?

Murphy: It’s really an important time as we look at our baby boomers beginning to entering our audience. The previous panel mentioned we have baby boomers who are serving their parents, and now, of course, that source of demand is only going to grow. The real issue is trying to anticipate those needs, which is a challenge. I think with our approach to data, and how we think that relates to our residents, and how we innovate, that’s really the key.

I think that a key for us was learning what we learned during COVID. There were many lessons, right? Many lessons were painful. One of them was flexibility. When we think about developing spaces, think of all those facilities that we have in communities that are large, lumbering spaces, no natural light, limited flexibility. We continue to learn and innovate in our community renovations and re-positionings, we’ve downsized that space. That’s a really good lesson for the future when you think about how we prepare for residents. Residents, especially baby boomers, seek flexibility.

In many communities that you all know, there’s a broad array of dining options. The previous panel talked about different things to do for residents that are meant to encourage and facilitate socialization, but we see blending those as really the key to success looking forward.

SHN: That’s a good segue into another question I had, which is I think a lot of providers are trying to take some of these new approaches to meet the market. How is innovation helping you stand out and remain not only relevant but competitive?

Murphy: I think we all struggle with this “sea of sameness” in senior living, and the early days of senior living were primarily focused on healthcare, right, and how that’s evolved. The nature for us relative to innovation is thinking about each community differently, thinking about how the geography is different for our residents, how their families relate to what’s innovative. I would call it a work in process, really, to think about how we implement that in communities, but the real key is understanding those residents and what motivates them.

I don’t know how innovative that is. That’s the toughest part about this topic, right, but that’s how it’s an approach to our residents. You talk with people who are moving their family into these communities, and they’re saying, “Why should I be here? What’s different? How are you thinking about our residents differently? It’s my mom. It’s my dad. It’s my sister, my brother.” That’s day-to-day care. Our approach is “people taking care of people” business. From an innovation standpoint, it’s really understanding the data behind our residents and what motivated them to move into senior living community.

Development, as this crowd knows, is all about long-term thinking, and that’s the key of how to approach it, because being an integrated company, we have the benefit of our own operating team to rely on. That’s part of our process in master planning, that we’re always thinking about the operations piece, not just about the sticks and bricks.

SHN: Talking about some of these innovative approaches, I guess I’m thinking that there are some macro examples. Maybe you could share how you are positioning entire communities to stand out. Are there success stories or particularly innovative approaches there, or are there even more examples on the micro level of things you’re doing?

Murphy: I think the initial challenge and the innovative part is, we all know the construction cost challenges today, and so our real focus is early on with the master planning process. We have our own master planning team with experienced design managers. We all know these projects take some time to carve out, some time to figure out. The numbers are really challenging today, which is a key driver for continued innovation. I think that in our clients, because we develop for our own portfolio, as well as for our for-profit and not-for-profit clients. The real key for us though, honestly, relates to assessing development alternatives that will endure the test of time rather than trendy.

One of the terms that come up often is biophilic design, which I assume this crowd is familiar with. When you think of all the communities that have no natural light or limited natural light, have limited relationship with nature, which is really a fundamental element of how we want our seniors to live. It can challenging to point to any one thing to answer your question, but it’s integrating all of those and really making that environment and that local market relevant and competitive.

The prior panel talked about obsolescence, right? I think that’s a key opportunity for us as we think about growing new communities, an opportunity for the whole business, because the nature of what we’re doing today is really reinventing how we think about seniors and how they live where they are. The key for us, I think, well I don’t know how innovative this is, but creating opportunities the socialization for our residents so they feel like they’re being treated like their home. It is their home, right?

The other lesson we learned during COVID was isolation was so hard on our residents, right? We’re taking that tough lesson and saying, “How do we integrate that socialization in the three-dimensional space that they live, so that people understand it isn’t just about me moving to my apartment and hopefully seeing people at dinner, right? It’s about the next stage of their lives.”

SHN: Where do the fastest growth opportunities in the segments of senior living, IL, AL, MC, etc.? Maybe I’ll throw in an active adult. I don’t know if you’re doing any development in that space.

Murphy: We’re not doing active adult. It’s not really in our business model, but we’re learning a lot from it. I see that as a real instructive lesson for everybody in the room about receptivity. It’s still a small part of senior living. NIC now tracks 100 active adult communities every quarter, which is a small but growing part of senior living continuum.

When I first started with senior living, I thought active adult segment was more of a flight to the capital to engage in a simpler development and operations model, but clearly residents responded to that. I think that’s a real lesson for us as we think about the continuum of care, because people are looking at that age where they’re thinking about moving to a new community and they’re saying, “Wait a minute. This is just people like me,” as opposed to a continuum of care and really addressing that sort of potential conflict. I don’t know that active adults are going to become a huge part of senior living, because senior living already has tremendous scale.

I think the lessons about socialization, about activities, and just seeing people that are more like me is a meaningful lesson for us. For years, we’ve designed communities that allow that separation of uses without creating completely distinct areas, but where people feel like they have their own neighborhood. I think the active adult offering is a key lesson for us as we learn from each other watching that business grow.

SHN: I was talking to some folks from Canada last night at the reception. They said, in Canada, they pursued a very self-conscious model of integrated living, where they put care front and center. It is a continuum, but they don’t shy away from, whatever it is, wheelchairs in the dining area. I hear often in the states that it can be a total deal breaker for consumers.

I know LCS operates so many continuum of care communities. Do you have any thoughts, I guess, on how to, even from a development and design perspective, balance between integrating the different levels of care versus having some kind of separation?

Murphy: That’s a real challenge, honestly. I think that goes to the point of how you create the space that allows that interaction. We do hear some more residents who occasionally move into a community, and they say, “Hey, I didn’t realize that next door, I was going to have somebody, with all due respect, using walker or a wheelchair. I think that’s not what I envisioned for myself.”

We try to keep them separate, so we don’t have a lot of age-in-place, unless it’s necessary based on the situation. At the same time, we don’t want to create acuity ghettos where people feel they’re not welcome. I think it’s a really delicate balancing act. I think that the key really is the culture of the community, that people understand that they’re all welcome. We’re all in this together. We will all be at different stages of that continuum as we go through it. I think that’s where the combination of what I think one of the strengths that we have at LCS is bringing that operating mentality into our design. We’re very conscious of those things.

Your other question about the future relates in many ways to a community we developed in Westchester County, New York, called Broadview at Purchase College that opened this past year. It’s been incredibly amazing. We’re happy with the community, and we like all that we did. What really intrigues me about Broadview, which is nearly 100% occupied in less than a year, isn’t so much about the development, honestly. I think the people that moved in there saw a real connection with the university campus, and said, “This is a place that I will move into earlier than I would have otherwise, because I want to age here in this environment. I want to be around people who seek lifelong learning and engagement as a core value.”

There are other versions of this intergenerational learning, various ways that active adults are playing in that sphere. The nature of communities like that, I think, if there’s a future, we’re speaking with universities all over the country, but the situation needs to be compatible with this idea. The universities are often distinct worlds into themselves. They’re looking for that same sort of question to how to complement what they do on a campus setting with a growing segment of our population. Again, like active adult, I don’t know how big the market can be, but I think Broadview has a lot of lessons for us as to what our residents are looking for.

SHN: Can you talk a little bit more about that Purchase College project? Because I think we’ve heard a lot of interest in these university-affiliated communities, but we’ve also heard that it can be such a long process to get them to open and that working with universities is so tricky. How was it for you? Do you have any tips or ideas for the future if you were to do another project like that?

Murphy: I’m reminded we’re in the rental business as well, which we started over the last 10 years. When we entered the rental business, we thought it would be faster than life plan. Certainly, there’s a different sort of business model, but none of these things are fast, right? Especially if you want to be in a strong market. The thing that’s quite interesting about Purchase College and their approach to the Broadview community was that early on, the goal and the vision was to invite people to live here in their later stages of life and be integrated with the community. The leaders at Purchase College were not looking for a real estate transaction, a land sale.

I’ve had many conversations with university officials, and said, “Well, it sounds like you’re just trying to sell the land.” They said, “Yes, we’re all right with that.” I said, “I suggest you call a broker. You can find people who are going to buy land for various uses.” We think that if you want to do something meaningful for the university and the campus setting, which includes the faculty, the staff, and the alumni – they’re all engaged in that– it’s much more about the community software and how the residents will relate to the students, faculty, staff, and alumni at the university.

It’s seen as a vision, which is what the “founding fathers” of Purchase College was, a 1960s era university, State University of New York, with 3,000 students. It’s a public liberal arts college in Westchester County. The local demographics were very conducive. The nature of that was how do we integrate these residents in the community? That’s what stuck with that vision all along. It’s really hats off to them, some of whom are still around after a few years, working with the state. That’s what took Broadview so long as it was state-owned land. It was a process to go through but was clearly well worth the time and effort.

SHN: How important do you see happy hour being within LCS communities? Do you see that expanding as boomers come in? I’ve heard it’s not just incoming residents that want things like happy hour, it’s their families. I’m wondering, what’s the role of understanding the family as you’re developing future senior living communities?

Murphy: Yes, great question, especially as our residents age better and live longer, right? Their family will be engaged in the community for longer. It’s a real key. I live in Des Moines. I go back and forth between Des Moines and Chicago, but I have a place in Des Moines. In my neighborhood Wesley Life incorporated a pub in their community that’s open to the public and is quite welcoming. If you picture the family coming in, and it’s not just about having a cocktail, right? It’s about socialization and conviviality with residents and family, and then you meet other family members, helping to foster a sense of home.

My mother was in a nursing home situation for a long time. What I longed for when I was there was just some social area just to sit and talk, not only with my mom, but with family and friends. You weren’t put off in the corner, which communities need to continue to enhance. I think that’s the real key as we think about how this family integration in the community really is an extension of home. I still laugh when friends I hang out with often say, “Hey, Murph. How’s the nursing home business?” I said, “I have no idea. I’m not in the nursing home business. We’re in the senior living business,”

All of us, I think, should feel that way depending– irrespective of what levels of care, because it’s about the family and making them feel part of it. They’re part of the decision, as we all know, and that’s really been a key link, I think. If we talk about innovation, is listening to them as much as we do to the residents, hearing their wants and needs.

SHN: I think as the new generation comes in, technology is obviously another big topic that’s come up today already, so I’m curious to get your thoughts on that, in terms of, are you looking at features or hearing that they want things, whether it’s smart apartments or whether it’s electric vehicle charging, anything on that front?

Murphy: It’s all the above. Access to Wi-Fi for some communities is a real challenge, not only financially but just physically in terms of how the building was designed. We think of technology more as transformative, making it not just about the basics, because we do a lot of the automated work from terms of cleaning and mowing the lawn, etc. Those are interesting things, but it’s really about creating opportunities for our staff, and our team, to work with the residents.

We’re creating a situation where that staff person can invest time in caring for the resident, not just seeking to cut staffing. We believe that colleagues should be spending more time with our residents, substituting that functional time for high-touch, high-quality time with our residents. When we think about technology, that’s our primary focus. Right up there with cybersecurity, which sadly has been a threat in our industry and not a very fun one to talk about, but that innovation will continue to evolve.

When families come to see their family in the community, the kids, grandkids, all of us, we need a higher connectivity. I think it has to be a higher purpose than just let’s have high-speed Wi-Fi or whatever the technology solution might be.

SHN: Are there any unexpected design trends driven by baby boomers that are shaping your redevelopment projects, I guess your development projects, too? Anything that’s surprised you?

Murphy: I would say that one of the bigger challenges is that we see change coming, but we’re not sure exactly what it’s going to look like. The source of this change is the increasing growth of the baby-boom generation, who will have a new set of wants and needs, and the unexpected nature of this impact really means having flexibility in design in terms of how we approach it.

I think that a lot of things get attention, like we talk about EV’s, ride sharing and general access to transportation. For example, I thought that we’d see less demand for parking, because we all know how much investment and land that parking requires. I thought that parking will be one of those needs that we see less demand. It’s still an issue where people say, “I really expect two spaces.” Even though they don’t drive their car, almost never, they still want to have a place, right? That I think will subside, but so far it hasn’t, because it’s one of those things that all the construction challenges we have, we’re looking under every corner to see how we can trim some of our development costs. Parking is one that is highly inefficient and very expensive.

SHN: I guess a question that occurs to me is just about unit size. I think for Senior Housing News, a big trend we were reporting on, it seems like for especially leading up to COVID was tiny homes and everyone downsizing and going smaller, running efficiently. I feel like, as I’ve been listening to people more recently, they’re saying no. Everyone still wants big units and has the space. Are you seeing any trends in terms of what the demand is?

Murphy: I hate to say it without sounding simplistic, but the demand remains: if it’s bigger, it’s better. I think part of it is, as homes have gotten bigger in America, people are like, “Wow. Okay. I only want to go down to 2,000 square feet.” You’re like, “Well, yes. That’s still pretty big, right?” That evolution, I think it depends on geography, because you look at the Northeast, where you’ve got smaller sites, you’ve got higher density, you’ve got more expensive– those are one thing. We’re developing in the Southwest, where they want the big, they want almost the house size thing. I think that will be moderate. When the previous group talked about the unmet middle demand for, call it affordable, or at least more affordable nature. That’s a key part of it.

That’s a challenge with residents when they come in, because they want to see that. The corner unit always leases or sells first, right? Those high-end ones are like, “Oh, that was interesting. How come you don’t have more of those?” There’s a limited capability for our residents to buy those or rent those. I think it’s something that’s going to continue to be a challenge for us, but we have to be more efficient with that, and we have to be super smart about it.

That’s where the design function and working with the architect is a real key, that we stick to those principles about efficient design, while either providing the bigger space or the good architects know this. A lot of it is the sense of bigger space in terms of light and how it’s positioned within the building. It’s not going to be the pressure that will remain, I think, to have bigger units.

SHN: I guess to wrap up, can you tell us a little bit about how people can learn more or keep up with the work, and especially the innovative projects that LCS is involved in?

Murphy: Oh, you’re nice to ask. These sorts of forums are a great opportunity in working with partners like you to get the word out. Our LCS website includes a range or White Papers on senior living design. We also have webinars that we sponsor regularly, but it’s about continuously educating ourselves in the business and sharing ideas. One of the things that attracted me to Senior living is how collaborative our world is, and people really want to share ideas.

I remind my colleagues that we want our competitors to do well. We want the business to have a good reputation. We want our residents to be happy, whether they’re in our communities or others, because it’s really a rising tide. Lifting all boats will be good for our business, and I think that sort of collaboration is a competitive advantage in senior living.

LCS Development shares your vision and passion for reaching your community’s unique goals from concept to completion and presales to buyer retention. As a trusted leader in senior living development, LCS Development carries a unique combination of expertise that addresses both form and function at every phase on every project. To learn more, visit: https://www.lcsnet.com/.

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