A new senior living brand is marrying small-neighborhood concepts with more compact designs to make assisted living and memory care more affordable for residents.
American Healthcare Management Group is forging ahead with the new assisted living and memory care brand called Elevate. At its core, the concept is meant to be significantly smaller in size than other senior living communities without sacrificing many of the industry’s standard amenities, according to Joseph Jasmon, co-founder, CEO and managing partner of American Healthcare Management Group. Founded in 2004, the St. Johns, Florida-based company specializes in management and consulting in senior living; health care; mental and behavioral health; and the coordination of care.
“[The senior living industry] has designed communities thinking of what is best from a real estate perspective or from a revenue perspective,” Jasmon told Senior Housing News. “All of those things are important, but we’ve forgotten that residents have to live there, too.”
Each Elevate community is slated to have 96 units, divided up into six neighborhoods of 16 private rooms each. The one- and two-story communities are planned to span about 50,000 to 55,000 square feet, with multipurpose common areas that staff can adapt as needed.
“Instead of having that room sit there with a bunch of expensive furniture that no one is using, we shuffle, switch, adjust, and then go from there,” Jasmon said.
Elevate’s partners include St. Louis-based Arco Construction, a general contractor that is able to build the communities for $159 per square foot, he added.
From a staffing standpoint, community leaders will have more responsibility managing daily operations, from caregiving and cleaning to culinary and housekeeping. And the communities will operate on 12- and 14-hour shifts in a staffing model that ebbs and flows around peak times of activity. Elevate communities will also make use of volunteers — family members or young people interested in the senior living industry — to help with non-clinical services such as activities, mealtimes and cleaning.
All of this means the communities can be built at a lower cost than the traditional senior living project, while operating at a cost below the standard model, according to Jasmon.
“We can save $5 million to $8 million in construction costs,” he said. “And we’ve saved about four full-time employees, which is a pretty good amount of money from an operation standpoint.”
And, those are cost savings the company can pass along to residents. For its Elevate brand, American Healthcare Management Group plans to charge about $1,000 to $2,000 less than market rate, depending on the market. Jasmon sees the new Elevate model aimed at both prospective senior living residents who can’t afford what’s on the market now, and current senior living residents who believe they’re paying too much.
The initial plan is to develop 10 Elevate communities in the coming five years, with the first two currently under development in the Florida markets of St. Johns and Clearwater. American Healthcare Management Group currently operates three communities, with 11 others under development with different clients. For its Elevate pipeline, the company is also looking at markets including Overland Park, Kansas; Denver and Boulder, Colorado; and Louisville, Kentucky.
‘Beautiful and practical’
Jasmon originally took inspiration for the Elevate model from several different styles of senior living. He studied small-house communities, such as those that are part of the Green House Project, along with other models that make senior care more affordable for residents.
He was also influenced by his belief that residents shouldn’t be more than 20 steps away from the amenities and spaces they use.
“We knew we could figure out a way to create something that was both beautiful and practical,” he said. “And so, that was the inspiration behind it: how do we get there?”
So, Jasmon got to work seeing if he could create a workable model for his middle-market senior living concept. He recalled hashing out the original idea on a napkin with Bruce Hentges, a vice president at St. Louis-based interior planning firm Spellman Brady & Company.
“What we thought at that point in time was … in order to keep it affordable, we have to be consistent in every aspect of the design, the development, the construction, the management and everything going forward,” Jasmon said.
With the Elevate concept in hand, Jasmon set out to find long-term partners who could get financially involved in the brand.
“We took the show on the road at the NIC conference in Chicago last year and got a lot of interest,” Jasmon said. “And that’s when we knew we had something.”
Although the idea came to fruition before Covid-19 hit earlier this year, the design underwent some light modifications for the new pandemic age thanks to help from Grant Warner, a principal at Dallas-based D2 Architecture. For example, each Elevate community will include mechanical rooms with outside entrances so that workers don’t need to walk through the community to get there. The design also includes family lounges with outdoor access for the same reason.
“We made those adjustments pretty quickly,” Jasmon said. “We also knew that, based upon access control and the design we have, we can lock down any one of our neighborhoods and create a quarantine area with a flip of a switch.”
Today, Elevate has 13 different partners, from architects and technology vendors to general contractors and insurance providers. Doing so has helped streamline the design process while saving a “significant amount of dollars,” Jasmon said.
Each community is planned to have a joint-venture deal structure where Elevate would own 20%, and an equity investor would own 80%, with 3- to 5- and 5- to 10-year investment options. About 35% of a community’s net revenue would be dedicated to staff salary and benefits, with a net operating return of 41%, according to an Elevate investor packet.
“The margins and the net operating returns we’re getting are very similar to what we would get if we built a 100,000 square foot building with high-end rents,” Jasmon said. “We’ve really cut down on what we would have to borrow, because we’re building it for less, and we’ve eliminated unnecessary operating costs by having a creative staffing model.”