Lawrence A. Cohen, vice chairman and CEO of Capital Senior Living Corp., will retire effective Jan. 1, the company announced Wednesday morning.
“It’s been 21 years, 19 as a public-company CEO,” he told McKnight’s Senior Living in a Wednesday afternoon interview. “I’ve been working on a transition / succession plan with the board for some time, and it’s a good time for me to retire and start the search for a new leader.”
Cohen said that, with emails from well-wishers flooding his inbox on Wednesday, he was touched to see “people that I’ve spent 20-plus years working with, how passionate they are about our industry and serving our residents.” It’s those people, working in communities, regional offices and the Dallas headquarters, that the CEO stressed he is most proud of.
“There has been a lot that has changed in 21 years,” he added.
In the 19 years that Cohen has ben CEO, not only has Capital Senior Living’s portfolio increased from 36 communities serving approximately 6,000 residents in 1999 to 129 communities serving approximately 16,500 residents today, but its property offerings have changed from predominantly independent living (75% to 80%, in Cohen’s estimation) to 60% assisted living and memory care.
“We transformed the service and levels of care that we delivered to our residents to meet the needs of an aging population that we’re serving,” he said.
The company ranked No. 9 on the 2017 American Seniors Housing Association list of the 50 largest senior housing operators and No. 9 on the ASHA 50 list of largest senior housing owners. Capital Senior Living also placed in the No. 9 spot on Argentum’s 2017 list of largest senior living providers based on resident capacity.
With tenure comes perspective, and Cohen says that the “rough patch” of overbuilding that the industry went through in the late 1990s holds lessons for today’s operators, who also are experiencing a time of oversupply.
“The lesson learned is to be patient, to manage expenses well and that this industry has always been resilient,” he said. “It recovered from the overbuilding of the late 1990s, it recovered from the great recession of 2008 to 2010 and the housing downturn, and it has always rebounded much stronger than it had been prior to one of those downturns that we experienced.”
Additionally in the 1990s, Cohen said, Capital Senior Living learned the lease-up-related perils of being a developer during downturns and the benefits of being a property owner.
“We were able to take our owned real estate and have selective sales to some of the large healthcare real estate investment trusts and some large private equity firms, to monetize the real estate and manage those properties to give us the necessary cash to weather a difficult period,” he said. “And it was interesting, because as we came out of that difficult period and as our operations improved and the real estate values increased, we were able to either rebuy or monetize again the real estate at very high returns that gave us a much stronger balance sheet. And it was actually the cash from those transactions that ultimately allowed us to seed the equity investment in the $961 million or so of real estate that we have acquired since 2010.”
In the past eight years, Capital Senior Living has gone from owning 25 properties to owning 83, Cohen said.
Challenges remain for the company and the rest of the industry, of course.
“I think the industry’s challenges today are dealing with more competition and then, obviously, dealing with labor shortages in parts of the country and increases in wages,” he said. “I think most of the operators are facing similar challenges regarding the industry.”
Capital Senior Living has “very focused action plans on the portfolio” to manage the competitive challenges it faces, he said, “but the vast majority of our properties still perform at a very high level, and we have a lot of initiatives that we’re implementing to continue to improve our delivery of care and services.”
Outside of the C-suite, Cohen has been active in the American Seniors Housing Association and the National Investment Center for Seniors Housing & Care.
“From an association leadership perspective, Larry is as good as it gets,” ASHA President David Schless told McKnight’s Senior Living.
Cohen was ASHA vice chairman in 2014 and 2015 and ASHA chairman in 2016 and 2017, and he heads the selection committee for ASHA’s Senior Living Hall of Fame. His background as a certified public accountant and an attorney, and his “very significant understanding of Wall Street and the capital markets,” have served ASHA well, Schless said, noting that Cohen helped create and implement a strategic plan for the organization.
“Larry’s always very prepared,” Schless said. “He may have a million things going on and yet when the time comes for the call or the meeting, he has done his homework. He doesn’t wing it. He’s prepared and asks hard questions — all the things that a great leader does.”
Cohen’s ties to ASHA go back to the very beginning of the organization. In the early 1990s, as president and CEO of PaineWebber Properties, which owned 13 senior housing properties, Cohen was active on the National Multifamily Housing Council and was involved in the formation of ASHA as a division of that organization.
“We decided we needed to form a subsidiary … to provide better information and have an industry association representing senior housing,” he said. ASHA later was spun off.
Cohen also is a member of NIC’s Operator Advisory Board and he has helped NIC’s capital-provider members understand the operator perspective, NIC founder and Strategic Adviser Bob Kramer told McKnight’s Senior Living.
“Larry has incredible energy and incredible enthusiasm, and he has used those incredibly effectively not only in leading Capital Senior Living as a major public provider for seniors housing and care but also to champion the entire sector, and I think he’s been very effective at that,” he said. “We all owe him enormous thanks for the role that he has played. Hopefully, he will continue to play a role in the industry even as he retires out of his CEO role.”
After Cohen’s tenure ends as CEO on Jan. 1, “I will be available as a consultant after that and, hopefully, get to enjoy some time in retirement and pursue personal and other business interests at the same time,” he said.
He will be paid almost $2.6 million for his role as a consultant, the company said in a filing with the Securities and Exchange Commission. Cohen will be subject to non-competition and non-disparagement clauses during this time.
Capital Senior Living’s board has hired executive search firm Heidrick & Struggles to help identify an external candidate to replace him.
Much awaits the new leader and the industry as a whole.
“I think we’re at this inflection point where, going forward, the senior housing industry will play a much more important role in the whole healthcare continuum,” Cohen said.
