By Steve Moran

A few days ago, Steven Fuller posted this on Linkedin (excerpts):

Are Atria and Welltower the Next Brookdale?

Today, 7 years later, Brookdale has crumbled to 1/2 its 2014 size, and almost every member of both company’s C-suites from that time are gone – either dead, fired, or run off like Californians with their U-Hauls, most of whom never heard from again.

And the vision? Disappeared in the junkheap of bloated investor appetites.

Ever hear of Andy Smith?

Who????

Maybe Atria and Welltower have a secret ingredient that will steer them clear of Brookdale’s fate?

If so, what is it???

More significant was the number of prominent senior living leaders who agreed with him. Here is a sample, but first as a teaser . . . I think he and all those who agree with him are wrong. Don’t get me wrong, I like Steven, he is a friend, and I respect every single person who agrees with him, which includes some close friends.

But still, I think they are all 98% Wrong.

Some Comments

“Scale, leverage, brand, size” – when I look for help in caring for a loved one, those four words are nowhere near my list of criteria. I’ve never heard a single family member of thousands of people I’ve served ever say to me, “I deeply love my mom. I’m scared about making this change. I need to know one thing. Does your company have scale?”

“I don’t send any clients to Brookdale. It’s a mess. Always cutting corners, staffed by corporate nurses that aren’t invested in the community.”

“This sounds like profit and efficiency over culture and mission. Not a good choice. I guess, time will tell.”

“Senior care is best served locally . . . not from some faraway land or gigantic, layers of business.”

I Am a Realist

This will be a huge challenge for John Moore and his team. It will not be easy. Would I bet my entire net worth on this happening? Nope, but I think John and the Atria team have a way better shot at pulling this off than the Brookdale team ever did. Even more of a shot than the current Brookdale team has of turning themselves into something amazing.

Why the Odds Are Worth Betting On

While I will have more thoughts on this in the coming days, here is why I am optimistic:

  1. While we have never seen senior living done on a massive scale, that doesn’t mean it can’t be done. In other countries, there are publicly traded senior living companies that serve residents and team members well, plus produce a nice return for shareholders.
  2. The Emeritus/Brookdale acquisition was done in the midst of a senior living feeding frenzy fueled by the ProPublica negative publicity, and likely was impacted by Granger Cobb’s health challenges.
  3. Neither Brookdale nor Emeritus were particularly known for being standout organizations, rather they were known for their size. So it was a merger of two very middle-of-the-road organizations (and that may be charitable).
  4. I got to know and liked Andy Smith a lot, but at the end of the day, he was not a senior living guy. Even today, current Brookdale leadership are not (with a couple of exceptions) people who by pedigree had senior living in their blood.
  5. John Moore and the Atria team have created great successes that, as near as we can tell, have weathered the pandemic better than most. And we know he is deeply invested in senior living.

I Want This to Work

I confess that I want like crazy for this to work. Because we need a breakout, huge senior living company to make it work in order for senior living to take its rightful place in the world of helping older people live their very best lives.

And of course, if Brookdale were to put me on the board, and give me a voice, maybe being the amazing breakout company is still possible . . . or maybe as Steven Fuller suggests, maybe even on the board of Atria (though if I am honest they don’t need me as much as Brookdale does).