Discover insights from Greystar's Senior Managing Director Michael Levine as he shares operational success in active adult living, and the importance of strong sales and marketing. Gain valuable advice and uncover the strategies behind this approach, while also learning about his philanthropic efforts.

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Produced by Solinity Marketing.

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Welcome to season seven of Bridge The Gap, a podcast dedicated to informing, educating, and influencing the future of housing and services for seniors. Powered by sponsors Accushield, Aline, NIC MAP Vision, ProCare HR, Sage, Hamilton CapTel, Service Master, The Bridge Group Construction and Solinity. And produced by Solinity Marketing.

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Lucas 00:55:

Welcome to Bridge The Gap podcast, the senior living podcast with Josh and Lucas. Spring NIC Dallas. A great event here. We got a great friend on the program. We want to welcome Michael Levine, Senior Managing Director of Real Estate at Greystar. Welcome to the show.

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Michael 01:08:

Thank you. Appreciate it.

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Lucas 01:09:

Very good to see you. It's always fun to interact with you. You're a busy guy.

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Michael 01:14:

I try a bit. Yeah. Try to keep up.

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Lucas 01:16:

Yes, yes. Because you have a lot going on. You were like the king of active adult before active adult was even like the cool thing in senior housing. You've been at this a long time. You forged the path in active adult and so you have this very unique perspective about how it started and where it's going. And we'd love to pick your brain about that. Give us some of that perspective.

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Michael 01:38:

So we started in a failing platform. We were brought over because a lot of platforms were being run by multifamily and trying to run it as multifamily. And so when we were brought over Graystar specifically and other companies decided, hey, let's break out and start a senior living division. January 2018 is when we actually started the actual division. It was a rough road. 2019 was the year that we sat down and we're like, are we going to be able to make this work? And at that point, we're around 55, 60 properties, like can we make this work or are we gonna fault? Not meaning Graystar because Graystar is a huge conglomerate company, but are we going to keep investing with an active adult or are we going to fault and and not go forward? So we realigned on how we did things. We rebuilt our entire active adult team. We now have 60 regionals, which sounds like a lot. We have 125 properties. We're in 27 states. We're 52% third-party management. We're building about eight to 10 a year. And we continue to keep growing.

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Lucas 02:38:

You went through that very quickly. No big deal, no big deal. No. Yeah. I mean these huge numbers I mean no one is really doing that. Yes. In this space specifically for active adults, maybe dive a little bit deeper definitely on how you're even able to really accomplish all of that. It's incredible.

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Michael 02:59:

The easiest way to state it is from a senior living perspective. That's our sales process. So our marketing and sales come from senior living, but our actual, how we function within the properties, we use our multi-family brains. And we had to kind of realign how we were looking at the properties, how they were priced, and how they lease up. A lot of people say that these properties should be 20 to 25% above multifamily. Originally when a lot of them were underwritten, they were underwritten at 30 to 35% above. Once we readjusted the pricing across the industry, then we had to realign what the product actually was. We're not doing breakfast, we're not offering food. It's a wants-driven business versus a needs-driven business. I think that's the biggest difference between us and IL. One of the main differences and really re-establish what our process and product is.

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Michael 03:48:

And once we did that, we had to figure out who our regionals were and we had to build some structure within markets. So in Dallas, we run over 20 properties and we have over five regionals just in operations within the Dallas market. And it gives people a purpose and a reason that they want to stay with us and grow with us. And some people have been with us just on our team for the full seven years. Others have been with Greystar for 25 years and are on our team. We've really built a culture that I don't think we could have had with 25 or 30 properties spread out throughout the country. And that's really what we've been working on over the last three to four years is this culture and this mentality of how to run these active adults properly. How to lease them up, how to do the pre-start running, and start that 12 months prior to their opening. And where we stand now and we're leasing up buildings quicker than we ever have before. Listening to Bob May on stage he has in Carrollton right down the street. They'll easily be one of the quickest lease up ever in active adult for all active adult. Not just Greystar. It's just amazing how far the product has come we've put a lot of work into it and our team's done a really nice job.

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Josh 04:55:

I can't overstate I mean the timeline of when you started doing this, Most of our industry groups have not even started tracking data on this until like the last year or two. And now you're starting to see learning tracks in content tracks at national events around the active adult sector. And I think still so many people are just trying to like, how do we define it? Because there's so many different flavors out there of even active adult, but you guys have been doing it and had I'm sure so much data for the last several years that it puts you so far in advancement of understanding the product. But for our listeners, so we've got a lot of listeners out there that are still just trying to figure out how do you define active adult. So from your perspective now doing this for years, the active product that you have out there, can you encapsulate that a little bit for our audience and how you differentiate that from independent living? Because I hear all the time in our industry it's like, oh, you're doing independent living and then somebody will say, no, it's active adult. Yeah. And then everybody just kind of squids their eyes, like what's the difference?

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Lucas 06:02:

Is it all 55 year olds and 60 year olds? And I've toured the one in Flower Mound with you. Yes. And it's not 55 year olds.

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Michael 06:09:

So our product right now, we have almost 23,000 units, which would put us probably in the top six for all senior living in terms of units. With that comes a lot of data. Our average age is 72. When we first started it was closer to 74. So over the years, it's actually tracked down. The big differentiator is I mentioned before, the words needs versus wants. And anybody that calls me is like, I want to build an active adult. I will differentiate those words. It's a big difference. I want to move out of my house versus I need to move out of my house. I want to order dinner in versus I need dinner cooked for me. We have these beautiful kitchens within our units, beautiful bistros, and all of these amenities, but we're not offering meals.

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Michael 06:55:

And I think that is probably the biggest difference. We're not offering van service to go pick up pharmacy deliveries or do any of those pieces. We're just offering age-restricted living with amenities. So a pure lifestyle and pure amenities that's just age-restricted. So it falls a little more on the multifamily side. Whereas I always think about this in senior living, when I used to tour in senior living, you could tour someone and be like, oh, they probably belong right next to the dining room. So I'm going to just show them that room next to the dining room. In our business, it's really that you're following all the laws and you're following fair housing that you should, you should follow it in senior living, but it's not really the case. You're following a multifamily like everybody does the same tour path.

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Michael 07:37:

Unless someone says, I only want to see within this unit, or I only want to see the first floor. We all do the same tour path. We're really just selling a lifestyle. And really where our product starts really changing and differentiating is when we're over 80%. Because then you're with a like-minded group and you build friendships, you build relationships and you speak of flower mound. I'll never forget that. We had a resident there, this guy Bob, who lived there for years and he moved to one of our buildings actually in California where his kids were. And the residence room, the most extravagant party, they signed like a poster. If one of you were re retiring, they all signed this poster of the building and it was so cool. That's what we built. We built this lifestyle that like they would've never had, they didn't come to us.

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Michael 08:23:

I will also mention that you mentioned data. We are so far ahead in data comparative to even senior living. Because we track everything. We use all the multi-family systems. So we've built out all the senior living stuff, which is the 13-month trends and all of those reports. But more importantly, we use all the data psychographic metrics to really figure out which markets we should be in, who we're going after, who the marketing should target, and what we want to be when we grow up. And every product is slightly different because it depends on who our customer is going to be.

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Josh 08:55:

So you had said one of the things early on is you, I think you said you applied marketing sales of how you did it in senior living. To me, that seems profound because I've never thought about marketing and sales for senior living being where it's at. But like that worked for you guys. So what do you mean by that?

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Michael 09:15:

It's relationship building. So we've used a motivational interview. And it's really finding out the biographical history of someone and also aspirational. What do they want to do when they grow up? Our average sale from the initial lead to a lease is about a month and a half, two months, which might not be where senior living is these days, but it shows that people are coming in three to four times. There are multiple touches and multiple phone calls. We're still sending out the wild gifts or what other people call those special gifts. We're building that relationship. It's not selling bricks and sticks. And so our websites, when I first came in, all our websites showed this beautiful Greystar-built product. And I'm like, there's not a single human in any of those pictures.

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Michael 10:00:

So we had to really bring in the lifestyle what we are, who we are. That's really been a big change for us over the last couple of years. That's the part where it is somewhat like senior living where you're building those case studies. When should we call 'em again? What should we talk about? Should we send an email? Should we send a text versus like, oh, they came in, they're not interested. Move on to the next. We're not automated like a lot of multifamily is at this point. We're still touring the way we would tour anyone else.

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Lucas 10:29:

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Josh 10:46:

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Josh 11:06:

Now that everybody is wanting to do active adult, what are some of the things that you forecast because I'm sure you're sitting in your seat, you're like, okay, yeah. There's a bunch of people that are about to make a bunch of the mistakes that we did. And how is this going to positively negatively impact not only our communities but the rest of the industry? So when you're forecasting looking ahead at the growth in this sector, what are some of the things that you've already given us some of the insider secrets, but what are some of your thoughts forward-looking?

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Michael 11:36:

I think there are a couple of people who have come into the industry who are calling themself active adult, that are not true active adult or underwriting this product. Bob may have just said it perfectly, some multifamily will lease up at 20 a month. And so some people are coming in coming to us and saying, Hey, we need you to you to get 16 leases a month. We need you to cut your fts down by three or four people. They underwrote it with a bank completely incorrectly. And I've seen a bunch of those deals hit the market. That's my fear. My fear is where independent living has gone. Where it just kind of spun with what everyone thought they wanted. So when I first started in senior living, it was really sold as a social model.

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Michael 12:17:

Independent living was like this really young social model. Now, independent living's, like when people age out as senior living, they're going back into independent living. We've really kind of stuck with our model and based off of that, we've moved back in age versus we're moving up in age. We're not moving from 74 to 78, moving from 74 down to below 72 years old. We're not bringing in all the extra services. Say, oh, we want to keep everyone longer. We're hoping people stay, most people stay three to five years, but we're hoping they stay longer if they have to move to another location. That's what the whole senior living realm is for. And that's really what I try and educate people on is the lease-up process. And also can't differentiate too much from, no one has built the perfect active adult yet. No one has run the perfect active adult yet. But we do know what works and what's not working. What's not working, let's push everything. Let's try and get increased rates, but let's not offer the value that has to be offered. Sure. The value's not offered. You can't increase the rate. Value has to outweigh the price with everything.

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Josh 13:21:

So next question for the developers out there that are looking at a feasibility study and they're immediately thinking, oh, age, income, qualified active adult. Yes, 100% is a slam dunk here. What should they be cautious for?

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Michael 13:35:

So we go a step further and we go with, I don't know if y'all talk about this a lot, but psychographics. So it's not just the demographics, not just, we have a lot of people that call us like, oh, this is clearly the greatest market in the world. I'll give a great example of a failure in some aspects. Prior to my starting, they built in Tanglewood, which is out outside Houston. Great area. The demographic show that the medium household income at that time was $140,000 plus that they were claiming they were moving out of multimillion-dollar houses. And so the average person, average developer would be like, build right here. Guess what? They don't want to move into a communal living environment. So the psychographics is that really deep dive to say, all right, they're not really interested in this.

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Michael 14:20:

Just because the demographics are there. Just because you have a lot of seniors here with money doesn't mean they want to move into a communal living environment. You have to find out what their needs are, what they're watching on TV, what they like. Both people on stage just talked about the baby chasers or do they have like the adult children that are moving into the local area? Is there a lot of multifamily with young kids in the area that their grandparents want to live within there? And I look at our building in Miller outside of Austin, 90 plus percent of that building has never lived in the Austin area prior. They're all there because of their grandkids. So I think the demographics is like the starting point, but we go into this very deep analysis as to who the customer's going to be. And then from there, we go into pricing. So a lot of people start with the pricing and the base case. We start with almost the marketing and the psychographics.

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Josh 15:13:

Lucas, Masterclass on Active Adult right now. That's what I'm thinking.

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Lucas 15:16:

Totally. This is incredible information. Mike, we've been wanting to have you on for a long, long time. I think we're going to definitely want to have a part two in the future, maybe in the fall here. So some closing thoughts or closing remarks. What would you maybe say there are people out there who are listening that are maybe younger and they're thinking of a career in senior housing. And they're listening to this and they're thinking, gosh, there's more to this than maybe I even realized. What would your encouragement be to those people?

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Michael 15:47:

Start by saying that when I first switched over in 2017, I was with senior living for a long time. Some big people in senior living lapped at me. And they're like, what are you doing? You have this career growth and you're going into some random field. And in fairness, when I first got the call, I'm like, what is active adult? I didn't know what it was, but I was intrigued by it. It gives a little bit of both. I always want to do purpose-driven work and it shows your why. Because you really are helping people. It's just you're helping people out at an earlier stage in life. It could be from a socialization standpoint, we have a lot of people who lost a spouse, got divorced, who are the parents, had their kids grow up, and just don't know how to live anymore. Don't know how to like function as humans with each other. And they need this environment. We've brought this environment around. So there is that why component that kind of ties in multifamily, but also see your living without all the care and the other components of it. So it does offer both bits of the business and I really like that part about it.

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Lucas 16:46:

So actually this will be the final one. I can't let you go before the actual final question. You're big into philanthropy. You clearly we can see you're very passionate about this and your why, also giving back and impacting your local community. You live in the New Jersey area, correct? So talk to us about your charity.

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Michael 17:07:

I started the Social Conscience Project six and a half years ago. I had a former charity and I started, I saw something different. I went to the school district and Akbar Cook, who runs West Side High School was on Oprah and Ellen, I used to partner with him and he built these washing machines and had this afterschool program and he got all the kids going to the school. I'm like, they have to come to school. This is brilliant. So I started a program that really focused on, I'm working with underfunded schools separately. I've always had a passion to help women who have survived domestic violence, and sexual assault. I've had people in my life who have survived it, people who are very influential, and then people who are struggling and it hits all levels. And so we focused a lot on that.

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Michael 17:49:

And then we run the largest gang program in the country. So three separate things, but ultimately we try and help women get out of the situations that they're in, find safe housing for them, and find new jobs for them. We've built eight what we call legacy centers, which are washers and dryers and places for kids to do their laundry without being laughed out, without being ostracized from school. It's a communal place. Probably 20,000 people last year. It's all grassroots really trying to do more meaningful stuff. Every Christmas we give out or the holidays we give out, you know, five to 8,000 gifts. So that's the fun part. But we try to do stuff that's more meaningful, that's long-lasting, and not just the handout component. Teach people how to get back on their feet, find jobs, and show people that they can care for them and not just, here's a handout and walk away.

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Josh 18:39:

What a great group of organizations and admissions that you're a part of. Good dude doing good work. That's fun to see. And thank you for sharing a little bit about that. I'm sure Lucas, probably some of our listeners that perked their ears and they're like, man, how can I possibly help Michael out on that mission? And so hopefully our listeners will go check that out.

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Michael 18:59:

Please, please do.

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Lucas 19:01:

Well, we will, and we're going to get that link from you. Sarah, our producer, and her entire team will make sure that information gets into the show notes. So if you're listening to this on your podcast player, your iPhone, or whatever, scroll down on those show notes. You'll see some links down there to connect with Michael and to Greystar and also to the Social Conscious Project. And so you can be a part of that if you feel so led to do that. Then go to btgvoice.com, download this episode, and access all of our content there. Check us out on LinkedIn. And thanks for listening to another great episode of Bridge The Gap.

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19:33:

Thanks for listening to Bridge The Gap podcast with Josh and Lucas. Connect with the BTG network team and use your voice to influence the industry by connecting with us at btgvoice.com.