Welltower COO: Senior Living in 2022 Like Multifamily Industry in the 1970s – Senior Housing News

It is sometimes said that the senior living industry is a decade or two behind the multifamily industry — but Welltower COO John Burkart believes you need to turn back the clock even further to compare the two.

“[Welltower CEO Shankh Mitra], when I originally spoke with him, he said, ‘it’s kind of like 20 years behind the apartments,’” Burkart said Tuesday during the Citi 2022 Global Property CEO Conference. “And I think I mentioned to him shortly after I started, ‘I think it’s more like 1970.’”

What Burkart meant was that, like the multifamily companies of the Disco era, senior living operators today are overly focused on their core business, and they are also at times still utilizing old-school techniques when responding to customer inquiries.

“It’s more like the for-sale sign that sits out in front,” he said. “If you go back to the 1970s, a little sign was out there [in front of the apartment,] and it said, ‘Don’t bother me, I’ll show the unit at one o’clock on Sunday.’”

While focusing on a core business is not necessarily a bad thing, Burkart’s point was that there are big opportunities for operators to focus on other aspects of the business, as well, to drive better outcomes.

“What they’re doing with care, the care is great,” he said. “When you talk about the other aspects of the business — the marketing, the value proposition, the asset management — the opportunities are huge, truly huge.”

Burkart, who joined Toledo, Ohio-based Welltower last July as COO, is a veteran of the multifamily world who witnessed the sector modernize firsthand. He previously spent 25 years at multifamily real estate investment trust (REIT) Essex Property Trust (NYSE: ESS), where he worked as senior executive vice president and COO and helped develop the REIT’s revenue management platform among other optimization initiatives.

And he is bringing his experience in that world to the senior housing space, particularly in the way Welltower works in alignment with operators under its RIDEA 3.0 structure.

“It is really no different than fee management multifamily, [but] it’s a fundamentally different contract than what people are used to from the past where they had much, much more control,” Burkart said.

To that end, Welltower’s leaders are constantly evaluating the company’s portfolio for communities that might be better off with new operators — with fairness in mind, according to CEO Shankh Mitra.

“Our point is not that we want to win at the expense of new, our simple point is that we want to sink or swim together,” he added.

Welltower has deployed about $6.8 billion since October, 2020, with $1.2 billion of that occurring since the beginning of the first quarter of 2022. Most recently, the company put $548 million toward the acquisition of 33 communities, expanding its relationship with StoryPoint Senior Living.

“We’re still buying significantly below replacement costs,” Mitra said. “That’s where the best risk-adjusted returns are.”

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Tim Regan

Tim is a lover of bad jokes and good beer. When he’s not hunched over his work computer, Tim can usually be found hunched over his personal computer.