Maplewood CEO becomes aggressive in developing innovative, luxury senior living
Patient growth was a hallmark of Maplewood Senior Living, most recently shown with a high-rise project in Manhattan as part of the six-year process of designing and launching the luxury brand Inspir.
However, CEO Gregory Smith believes that now is the time to hit the gas pedal, especially with new developments.
“I’ve spoken to our capital partner and we’re going, going, going, going, going,” he said at the Senior Housing News BUILD event in Chicago last week.
Since the occupancy rate was tight due to the oversupply, construction starts began to slow in the years before the Covid-19 pandemic – and then collapsed in 2020. Now there is uncertainty about the ongoing pandemic, labor market problems, disruption in the supply chain, rising construction costs and a number of other challenges are putting some developers in a wait and see mode, Smith noted.
“But demographics are not changing – it is coming, people will need housing,” he said.
With this in mind, Smith is driving expansion plans for the Maplewood and Inspir brands. The East Coast, West Coast and the UK are key markets for growth and he seeks to exceed the expectations of a discerning clientele through innovations in healthcare accessibility, bespoke lifestyle experiences and unique building designs.
Urban luxury and more
Smith marked an important milestone earlier this year when the first Inspir Community opened its doors in New York City.
Covid-19 caused construction setbacks for the Upper East Side skyscraper, but the delays provided an opportunity to improve building functions, such as: B. adding infection control elements to HVAC systems, Smith said.
The sales and marketing teams also “recalibrated” themselves during the pandemic, with a focus on staying tightly connected with the depositor base and taking a more hands-on approach. They have kept depositor dropouts to a minimum, and now letting is “growing very well”, according to Smith.
Inspir residents are a “discerning” clientele consisting mostly of long-time New Yorkers accustomed to the urban lifestyle – and Smith’s vision is to create a senior housing option that preserves and enhances that lifestyle.
The physical system differs from a typical residential building. Indeed, Smith had to allay the project architect’s concerns that 35-40% of the building was reserved for recreational space versus rentable units.
The goal of so much common space is to involve residents and encourage their vertical movement through the building.
In addition, the common rooms and the overall design of the building with materials such as marble and oak create the feeling of being in a homely oasis in the urban jungle.
“Our residents can go outside on the patio or in the 17th floor Skypark with high ceilings and sliding doors … it brings the outdoors into the building,” said Smith.
Maplewood began developing plans for Inspir around 2012, and the long lead time of development in NYC has also allowed the company to forge relationships with a variety of health care providers, cultural institutions, and other partners.
There are between 50 and 60 partnerships supporting the Inspir community in NYC, Smith estimates.
Partners like Mount Sinai help create what Smith calls an “integrated health system in the building,” and each resident has an individual care manager.
At the same time, art and cultural partnerships are also of crucial importance. A number of highly skilled senior artists – some in their 90s – come into the building to lead classes and otherwise interact with residents, which Smith sees as an inspiration for residents to participate in their own creative activities.
“Not only does it say ‘we can take you to a museum or gallery,’ but we can bring it here,” said Smith of using partnerships to make Inspir itself a center of activity and engagement.
Partnerships – and on-site healthcare – also play an important role in another recently opened Maplewood development project. Maplewood, Princeton, on the Penn Medicine-Princeton Health campus, marks the company’s entry into the New Jersey market.
The location creates numerous opportunities for innovative and accessible care, said Smith. Doctors and clinicians can easily visit the community, the health system is helping fill gaps in day labor, and residents have been drawn to the model. With an occupancy rate of almost 60% already, Smith believes this is the fastest restocking in Maplewood history.
“It’s a symbiotic compromise and it clearly works well,” he said.
In fact, residents have moved across the Maplewood portfolio and demand is returning sharply after the pandemic hit.
With the exception of the Inspir building in Manhattan, the utilization of the entire Maplewood core portfolio is now in the lower 90s, according to Smith – and such stability of the platform should provide a necessary foundation for the aggressive growth he is aiming for.
Get aggressive in development
Almost two months ago, Maplewood announced plans for a second Inspir project to convert the former Fairfax Hotel on Embassy Row in Washington DC.
At the start of the Covid-19 pandemic, senior housing developers and operators predicted that the plight of the hospitality industry would lead to hotel conversion opportunities. Such projects have come about, but finding a suitable hotel to renovate is a difficult process, Smith stressed.
Physical layout is the usual limitation with issues like low ceilings, awkward crevices, and small spaces. The DC Hotel was the rare find with large floor slabs and rooms around 500 square feet that allowed it to be converted into units with one or two bedrooms.
“We met a gem,” said Smith.
Still, the project is likely 36 months to go due to the need for major interior renovations, including new mechanical systems. The project team strives to preserve historical elements of the building that has housed US presidents and other dignitaries for decades.
Maintaining the character of the building is at the heart of the Inspir vision, emphasized Smith. As with any Maplewood building, each Inspir community must match the particular culture of their location.
At the moment, Smith’s thoughts are racing about how to design and program the Embassy Row project for the DC market; He stressed that core elements such as health care accessibility will be a constant for Inspir and Maplewood in general, but that Inspir is a lifestyle brand that needs to support the particular lifestyle that various consumer groups desire.
While hotel remodeling and other refurbishment options aren’t easy to find, Smith is on the lookout for them because they offer faster time to market than basic designs – especially on large and complex projects like Inspir buildings.
And speed is critical to getting ahead while other developers are constrained by current complications related to capital availability, supply chain slowdowns, and high construction costs.
With a dedicated and patient partner in Omega Healthcare Investors (NYSE: OHI), capital is not a pressing concern for Maplewood. However, the problems with the supply chain are real. Smith was recently surprised to learn that the furniture, fixtures and fittings lead time on a home renovation project had reached 30 weeks.
“Knowing that things are taking longer and getting more expensive, we take this into account in our underwriting and we know we might get hiccups, but I don’t think that’s a reason not to develop now,” said Schmied . “Being out there when there isn’t much to offer and getting started right away is something we will focus on.”
As for the pipeline, he plans to add more Inspir churches in New York City – with at least one and possibly two projects being new developments. And in addition to the company’s stronghold on the east coast, he sees Florida and the west coast as attractive markets for Inspir and Maplewood.
Inspir is poised to go international too, with a deal in London that is “pretty closed and loaded,” Smith said. Omega owns around 150 nursing homes in the UK and Smith is “incredibly optimistic” in that market.
While trying to develop communities more aggressively than in the recent past, Smith remains focused on the luxury market and does not want to be distracted by opportunities such as mid-market senior living and active adults that haunt many other investors and operators.
And he remains “incredibly picky” when it comes to opportunities.
“We don’t build for the sake of building,” he said.
Such a discipline is particularly important given the severe labor shortages across the economy; Unsurprisingly, work is Smith’s primary concern through 2022. The problem requires both creativity – he is interested in universal worker models, for example – and the fundamentals of wages, benefits and culture.
Providing career advancement is especially important to retention, and Maplewood’s growth should help in that regard by creating new opportunities for leadership. Smith told the story of a dishwasher who climbed the ranks and ran the Princeton Project.
With labor law issues and all of the development challenges facing Smith, there is one trait that is particularly important to Maplewood.
“It’s nimble,” he said. “If you are able to make decisions – rational, prudent decisions – on the fly, you can turn around quickly when necessary, and that has helped us along the way.”