What Happens When Brookdale & Atria Get Into Residential Care?

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What would happen if the large national assisted living companies began opening small residential assisted living homes?  We can thank COVID-19 because some of them have already opened and several are considering it.

Five national providers have begun what is termed, “Pocket Home Communities.”  Pocket Home Communities are several residential care homes located on the same property ranging from 4 to 20 residents in each home.  A large provider erecting 10 of these homes can easily reach 200 residents, giving them the scale they need to be financially healthy. It would cost much less than building one large community and they already have the staffing, operations, marketing, and dining models in place.

Are the national players looking into residential care?

Co-founder of Capital Senior Living, a large independent living provider with their headquarters in Dallas, Texas left the company several years ago to create a seven home community model in Carrollton, Texas, with plans on expanding in other areas.

Another Dallas, Texas-based company, Pegasus Senior Living is looking into it according to co-founder Chris Hollister in a recent seniorhousingnew.com interview. He stated that Pegasus has started “to reevaluate the industry’s value proposition and the appeal of small-house senior living setting.” He believes that innovations like that will flourish over the next 3 years.

Talks of others jumping into this trend have been rumored throughout the industry due to the forecasted changes needed due to COVID-19 challenges. COVID-19 has changed the assisted living and nursing home landscape and has opened their eyes to the residential care possibilities. Partly because residential care homes have been doing an excellent job fighting the COVID virus.

For example, the latest data from the State of Washington showed low single-digit percentage occurrences of COVID in residential care settings compared to significantly higher double-digit percentages in larger assisted living and nursing home facilities.  Families have voiced concerns about placing their elderly loved ones in bigger communities due to the potential of getting COVID and the restrictions in activities and visitations.

Is it a threat to the current residential care home operator if the larger assisted living companies start building residential care homes themselves?

Chuck Bongiovanni, founder of CarePatrol Franchise Systems,LLC, and now CEO of Majestic Residences, a residential care home franchise, believes so. “Something that always surprised me about residential care home owners as they were more concerned about the competition from the home down the street than the large assisted living community a few miles away.  They don’t know that most families are struggling with the decision of placing in the big community or residential care in general.  It was never about the care home down the street.” He continues to state that; “When larger assisted living communities become involved in residential care homes, the competition is going to be even much more stiffer.” He claims in his 27 years of placement experience that families trust the structure of larger communites more than smaller care homes. He plans on elevating that trust level by building a national brand of residential care homes.

Can current residential care homes compete against this threat?

Bongiovanni and his partner, Gene Guarino believe so.  They’ve recently developed the Majestic Residences franchise with the plan of partnering with over 300 current residential care homes owners across the country to build that trust. Bulding a nationally recognized name in an industry is not new for Bongiovanni or Guarino.  Bongiovanni transformed a Phoenix, Arizona senior placement agency from stratch into a nationally recognized powerhouse in the senior placement industry placing more seniors than anyone, except A Place For Mom. Guarino built an assisted living academy empire and has helped over 1,000 people open residential care homes.

Bongiovanni confidentially states; “We will have the brand recognition of the big providers, coupled with the great care of the residential care home operators.  We will not only be able to compete with the large national brands, but also with the home down the street.”

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