Newton, MA-based AlerisLife (formerly Five Star Senior Living) announced Monday morning that Katherine “Katie” Potter has resigned as president and CEO and that Chief Financial Officer Jeff Leer has been appointed to succeed her on an interim basis as the company hires a consulting group to review operations.
“On behalf of the entire Board, I want to thank Katie for her years of leadership and vision at ALR and the senior living industry,” Adam Portnoy, chair of the AlerisLife Board of Directors, said in a statement. “Katie’s tenure included guiding the company through the unprecedented COVID-19 pandemic and creating a business foundation to help position ALR to service the senior living industry.”
Potter, according to AlerisLife, resigned effective Saturday, with Leer beginning his additional duties on Sunday. Leer has been executive vice president, CFO and treasurer of AlerisLife since 2019 and will continue with those responsibilities, the company said.
AlerisLife has approximately $900 million in annual revenues, according to The RMR Group, of which Portoy is president and CEO. AlerisLife is a client of The RMR Group, which provides management services to the company. Potter, in addition to serving as president and CEO of AlerisLife, was senior vice president, legal, and assistant general counsel of The RMR Group.
The AlerisLife board has hired healthcare consulting group Alvarez & Marsal to conduct a comprehensive operational review; the firm expects to complete the review and submit recommendations to AlerisLife by the end of the second quarter. AlerisLife said it does not plan to begin searching for a permanent CEO until the review is completed.
“Jeff’s experience as the company’s CFO positions him well to lead the business on an interim basis and work with A&M as they review AlerisLife’s operations,” Portnoy said. “Given the dynamic shifts in the senior living industry and the disruption caused by the COVID-19 pandemic, we believe that now is the right time to undertake an operational review to ensure that the company will deliver enhanced financial performance and value creation over the long term.”
Before joining AlerisLife in 2019, Leer held senior accounting and finance positions at The RMR Group and its affiliates, including serving as CFO and treasurer of Office Properties Income Trust. Currently, he is a senior vice president for The RMR Group. Previously, Leer held various accounting and finance positions at several Fortune 500 companies, including Boston Scientific Corp. and Dell Technologies. Leer also is a certified public accountant.
“I have the support of the strong team in place across AlerisLife, including the accounting and finance groups, as I take on the additional responsibilities of serving as interim president and CEO,” Leer said in a statement. “In the short term, my focus will be on working with A&M to advance the operational review of the business while supporting the board.”
Company name change came with new plans
Five Star Senior Living changed its name to AlerisLife in January, when the company also announced plans to expand its offerings to include active adult management services and home care and concierge services. The Five Star name continues to be used for the AlerisLife’s repositioned senior living management services. The move came after real estate investment trust Diversified Healthcare Trust moved 107 senior living communities from Five Star to 10 regional operators as Five Star planned to focus on larger senior living communities and stand-alone active adult and independent living communities; those transactions were completed in November.
Five Star was No. 5 on the most recent ASHA 50 list of largest senior living operators compiled by the American Seniors Housing Association. The company also was No. 5 on Argentum’s list of largest senior living operators, by both total units and operational resident capacity. Argentum listed Five Star as the country’s second largest operator of continuing care retirement communities, third largest provider of assisted living and fifth largest provider of independent living on its 2021 list, based on data current as of Dec. 31, 2020.
As of Dec. 31, the company had approximately 10,700 employees and operated 140 senior living communities with 19,999 units and approximately 16,000 senior living residents, as well as 215 clinics serving about 17,000 rehab and wellness customers, according to a February presentation posted on the AlerisLife website.
Potter had been CEO since 2019
Potter’s appointment as president and CEO of Five Star was announced in December 2018, with an effective date of Jan. 1, 2019. She had been the company’s executive vice president and general counsel since 2012. The appointment followed a November 2018 announcement by then President and CEO Bruce Mackey that the company’s finances cast “substantial doubt on our ability to continue as a going concern.”
Under her leadership, the company supported the National Senior Games, joined the MIT AgeLab C3 Connected Home Logistics Consortium, partnered with Aging2.0, and moved toward being more data-driven, with Potter working with the senior management team to develop key performance indicators for operational efficiency and deliver dashboards measuring performance. The company moved up in rankings in the J.D. Power’s Senior Living Satisfaction Study, and after Five Star became the first organization to commit to the J.D. Power Senior Living Community Certification process in 2018, 32 of the company’s communities across seven states had achieved the accomplishment by the end of 2019.
Potter has been active on the Argentum Board of Directors, the American Seniors Housing Association Executive Board and the National Investment Center for Seniors Housing & Care Operator Advisory Board.