The ISL story of success is most poignantly demonstrated in case studies of turnarounds and new development projects over recent years.
A purpose-built property located in the Inland Empire of Southern California had consistently experienced lackluster results for more than three years under management by one the largest senior living companies in the country. The property averaged 65% occupancy and disappointing results. The owners needed relief from low financial returns.
The owners brought ISL in as the operations management company. ISL quickly identified an unmotivated team. They did not believe in their product and lacked marketing focus. They believed that their property was located on the "wrong side of the tracks" and would never be successful. Turnaround was initiated by infusing the team with confidence and passion for their product and service to residents.
With a marketing focus, the team consistently achieved above 95% occupancy. That focus also identified opportunity to convert one wing of the property to memory care, which closed the back door to residents seeking higher levels of care.
The Inland Empire area was heavily hit by the recession. The community has experienced a much softer market. However, flexibility for expanding the memory care wing due to demand in the market, creative marketing strategies and a dynamic approach in operations, the community has continued to sustain success.
Today the property consistently averages $100,000 net operating income each month. Applying an 8-cap, the property value has increased from $3.5 million in 2003 to $11.6 million.
An owner group brought four underperforming properties in its portfolio to ISL for review. With the decision to transition the properties to ISL management, a rally for targeted results was immediately launched. Swift transition began with site visits by each discipline within the ISL team. Opportunities for change at the properties were quickly identified and action plans were launched. Each property presented a unique mix of opportunities, including community leadership, expense management, census development, rate adjustments, employee morale and training, resident care assessments and state licensing. Within 18 months of ISL operation, net operating income increased 39.55%.
In each year since, the communities under ISL operations management have continued to make sustained progress in operations efficiencies and profitability. The combined portfolio averages $680,000 NOI per month.
Applying an 8-cap, the portfolio value increased more than $59 million in four years.
A converted hotel property in a prime market in Southern California was performing with lackluster results. It was suffering from a poor physical plant. Due to all-inclusive rates, revenue was not maximized. Rental rates were low and not competitive in the market. There was also an expense control opportunity. Net operating income was only $35,000 per month. The property was suffering from a Catch-22. Needed capital improvements were postponed for profitable results which hindered potential new residents from moving into the property. With ISL management, a plan was executed to maximize rate opportunities and control expenses. In return, the owners agreed to a partial refurbishment. The strategy was successful turning a low return into $138,000 net operating income per month. With the operational success, ISL brought a qualified buyer to the owners. The owners executed their exit strategy, which resulted in the sale of the property for an increased sales price of $6 million.
ISL has continued to operate the property for the new owner. In 2010, net operating incomes averages $144,000 per month.
Applying an 8-cap, the property has increased 149% in value to $21.7 million.
The owners of an independent living, assisted living and memory care campus in Ventura had fallen on a streak of bad luck. The assisted living and memory care community operations were not meeting operational forecasts. The independent living new development experienced catastrophic events, including fire, flood and long delays. During development delays, the Ventura market had become oversaturated and extremely competitive.
ISL led the owners through those difficult times. Broken operations were repaired, the new development opened and the reputation pushed to lead the market. Today the campus is regarded as the premier senior living community in Ventura. It is consistently at 98% or higher occupancy and net operating income has increased more than 300%.
The combined campus value, applying an 8-cap, has increased $28 million in five years.
The owners of a converted rehabilitation facility were frustrated with negative results in their 36-unit, three-story memory care community located in Marin County. The physical plant was in need of interiors upgrades to compete in a high-end marketplace. However, the drain from negative operations had depleted their desire to invest more into the property. They demanded results before capital expenditures would be made.
With ISL operations management, the community was infused with dynamic leadership, advanced programming and quality care for residents. While the physical plant was less than optimal, a reputation for exceptional resident service delivered increased census and rates.
The operational results enabled the owner to re-invest in the physical plant. With each interiors project phase completed, the bottom line shows increased financial returns.
Applying an 8-cap, the property value has gained $10 million in three years.