Jeff Leer has been appointed president and CEO of Newton, MA-based AlerisLife, a position he has held on an interim basis since former President and CEO Katie Potter resigned April 30, the company announced Tuesday morning. The move comes as the company plans to cut costs and make operational changes to try to increase occupancy.
Leer will continue to serve as the company’s chief financial officer until a replacement is appointed. He has been executive vice president, CFO and treasurer of AlerisLife since 2019.
AlerisLife also announced that the healthcare consulting arm of Alvarez & Marsal has concluded the operational review it was hired to perform and has made recommendations to the company’s board of directors. They include:
- Cost reductions,
- A corporate reorganization “designed to enhance accountability,” and
- Operational changes to try to increase senior living community occupancy. Average occupancy in the first quarter was 74.1% in the 120 independent and assisted living communities AlerisLife manages for real estate investment trust Diversified Healthcare Trust and was 71% in the senior living communities owned by AlerisLife, according to a company press release.
AlerisLife said that executives will discuss the recommendations and their implementation during the company’s second-quarter earnings call in early August.
In May when the operational review was announced, Adam Portnoy, chair of the AlerisLife Board of Directors, said that it was being conducted in light of “the dynamic shifts in the senior living industry and the disruption caused by the COVID-19 pandemic.”
AlerisLife reported a net loss of $9.7 million in the first quarter, and earnings were down $5.5 million in the quarter.
On the company’s first-quarter earnings call, held in early May, just days after he was named interim CEO, Leer said that the company had decreased general and administrative expenses by $1.4 million (9%) from the first quarter. Since the second quarter of 2021, he added, the company has reduced gross general administrative costs by $4.6 million, or $18 million on an annualized basis, which is above its original $12 million target.
“While we continue to evaluate opportunities to reduce our general administrative costs, we are committed to streamlining our processes and making the necessary investments in our people,” he said at the time, calling it a “pivotal time” for the senior living industry and AlerisLife.
CFO experience ‘positions him well’
AlerisLife previously said that it did not plan to begin searching for a permanent CEO until the review was completed. In May when Leer was announced as interim CEO, Portnoy said that Leer’s experience as CFO “positions him well to lead the company on an interim basis.”
“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,” Leer said at the time.
Before joining AlerisLife in 2019, Leer held senior accounting and finance positions at The RMR Group, also based in Newton, MA, and its affiliates; those positions included serving as CFO and treasurer of Office Properties Income Trust. He is a senior vice president for The RMR Group, which provides management services to AlerisLife and Diversified Healthcare Trust. Portnoy is president and CEO of The RMR Group.
Previously, Leer held various accounting and finance positions at several Fortune 500 companies, including Boston Scientific Corp. and Dell Technologies. He is a certified public accountant.
New name, 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 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, 2021, 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.
AlerisLife has approximately $900 million in annual revenues, according to The RMR Group.