March 10, 2020, Steve Monroe, SeniorCare Investor - How often have you heard that the vast majority of skilled nursing facilities need substantial renovations in order to compete? Now, we are hearing it about all those assisted living communities built in the 1990s, and even the early 2000s. All of the new development in the past six or seven years has really caused owners and operators to take a hard look at their real estate and decide what to do. What needs to be done to compete and how much will it cost?
One of the nice things about going to a NIC conference is meeting new companies and people. One of the companies we met with, South Coast Improvement Company, specializes in renovating senior living buildings while the residents are still living there. In other words, no move-outs to get their job done. That is what they do, apparently, with as little disruption to operations as possible.
Their client list is a who’s who in the industry, including Atria Senior Living, Brightview Senior Living, Benchmark Senior Living, Brookdale Senior Living, Sunrise Senior living and Brandywine Living, to name a few. Not too shabby, and there appears to be a lot of repeat business.
While it would not be accurate to say no job is too small or large for South Coast Improvement, they do go down to the $250,000 to $500,000 range, even though they have completed much larger renovations or additions into the millions.
In fact, in 2019 they built a 50,000-square foot memory care community in the Boston metro area for a top-10 provider. But that is the exception. Also in the Boston area they completed a $20 million addition to an existing three-story senior living community together with a three-story addition tied to an existing building in the greater Boston area.
And don’t let their name mislead you. The company is based in Marion, Massachusetts, with a regional office in Reading, Pennsylvania, but they do work up and down the east coast. They completed a $10 million renovation in Fort Lauderdale last year.
We have to admit, the name was new to us even though they have been in business for more than 20 years. And while we always knew there were smaller contractors that do smaller jobs, we just didn’t know there was one that happened to specialize in seniors housing, and prided itself on being non-disruptive. We think this is a huge market that will only grow bigger, just as the senior living market gets bigger.