An aging demographic and changing consumer demand have led one of the country’s largest senior living companies to pivot from its primary role as an owner and operator of independent living, assisted living and memory care communities to try to become a lifestyle services provider that includes active adult housing and home health.
As McKnight’s Senior Living reported Tuesday, Newton, MA-based Five Star Senior Living announced a rebranding to AlerisLife Inc., effective immediately, repositioning the company as it works to diversify its offerings to serve “active adults” and “younger choice-based consumers,” as well as its existing senior living and rehabilitation / wellness clientele.
AlerisLife President and CEO Katie Potter said the company’s customer base is “starting to cross generations and mindsets, demanding a different experience as they age.” Lifestyle services, she told McKnight’s Senior Living, are “financially flexible” and “choice-based,” allowing customers to “craft the lifestyle they want.”
“They want a lifestyle in which they can thrive, with the ability to control what services they use and when and where,” Potter said. “We are committed to our senior living service offering and excited to pursue other complementary ways to meet aging adults where they are, solidifying our position as an industry leader.”
Five Star and Ageility, the company’s senior living management and rehab / fitness services brands, respectively, now are divisions of AlerisLife. According to a press release, the company will continue to provide senior living management services while also reaching out to younger “choice-based” consumers through its Ageility network.
Through acquisitions, organic initiatives and partnerships, Potter said, the company also will expand into home health and home care businesses via Windsong Home Health, a Houston-based licensed home health agency the company acquired and has grown organically. AlerisLife also has certain private-pay home care service offerings within its portfolio, as well as concierge services, according to a presentation on the company website.
“Through these and other efforts, including Ageility’s expansion into third-party senior living communities, we’ve demonstrated our commitment to reaching older adults outside our senior living footprint,” Potter said.
The rebranding also is meant to capitalize on the company’s organizational restructuring over the past two years. Last spring, Five Star announced plans to exit the skilled nursing business and transition the management of 108 communities to other operators. At the time, the company said it wanted to focus on larger senior living communities as well as stand-alone active adult and independent living communities. Five Star also recently expanded its Ageility program, announced a dining services collaboration with Compass Group and partnered with Dispatch Health to bring acute care to residents.
“We are exploring acquisition opportunities, organic growth opportunities and strategic collaboration opportunities and are excited to continue to move the industry forward,” Potter said.
“Years before the pandemic, we began evolving our offerings and expanding our services to attract older adults seeking choice-based lifestyle services,” the CEO said in a statement. “We have already made great progress and look forward to further diversifying the company’s revenue streams, driving a shorter sales cycle, maximizing our share of customer spending, increasing pre-senior living touch points with customers, and reducing turnover costs.”
AlerisLife pointed to changing senior living demographics in its move to “evolve” the company. In the past decade, the average move-in age for the senior living industry has increased from 78 to 83, a phenomenon the company said was exacerbated by the pandemic due to lowered consumer confidence in the industry and better digital and social support networks delaying moves from the greater community to senior living. A widening sales cycle across all lines of business also increased by 34% between 2017 and 2021.
In contrast, AlerisLife pointed to opportunities for growth in the lifestyle services industry. That industry has grown 5.8%, on average, annually since 2015, and a $400 billion Medicare coverage expansion will fuel continued growth, according to the company.
“We believe this dynamic creates a new opportunity to become a one-stop, wide variety provider of lifestyle services,” a presentation on AlerisLife’s website indicates.
Pointing to the success of its Ageility rehabilitation and wellness services division, AlerisLife said that lifestyle services show strong growth, add to the resident experience and are “pandemic proof.” The Ageility brand provides outpatient therapy, fitness classes and training, and personalized home health services. The company currently has 222 clinics serving approximately 16,100 rehab and wellness customers, according to the presentation.
Growth in the outpatient Ageility clinics has come from outside Five Star-operated communities, AlerisLife said. The company anticipates that it is capturing less than 1% of the current market, and it is eyeing “tremendous” growth potential, given that there are more than 28,000 assisted living communities nationwide.
Currently, according to AlerisLife, 61% of company revenue comes from its owned or managed senior living communities, and 39% comes from outpatient, fitness and other services provided by Ageility. By 2026, AlerisLife said, the company projects that 39% of its revenue will come from owned or managed senior living communities, 37% will come from Ageility, 22% will come from concierge services and 3% will come from home health.
