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Friday, Dec 1, 2023

Homed In

The name be.group likely evokes images of some fast-track online firm, perhaps one in creative space near the beach. In reality? It’s a 57-year-old nonprofit provider of senior housing headquartered in Glendale that last year had the fuddy duddy name of Southern California Presbyterian Homes. That such an organization would change its name tells a lot about both the challenges and opportunities facing one of the largest nonprofits in the greater San Fernando Valley. It’s in an industry that by all accounts is ready for big expansion, but be.group needs to stand out from an increasing number of competitors. “We’ve been forced to become adaptive and nimble, and while that’s a good thing it’s a difficult thing. This is a time of disruption, and organizations have to respond,” said Chief Executive John Cochrane. Be.group places third on the Business Journal’s list of Largest Nonprofit Organizations with assets of $212 million. (See list page 15.) It mostly runs homes for seniors with limited means but also has moved into the upscale assisted-living market. And much of the housing provider’s success in recent years is a result of its marketing efforts, which explain its name change. It has locations outside of Southern California and doesn’t serve exclusively Presbyterian clients, so dropped both labels. At the same time, rivals such as Belmont Village LP, a Houston company that was established 15 years ago have moved aggressively into the region. Since opening its first assisted living facility in Los Angeles County just 11 years ago, Belmont Village already has six, including in Burbank, Encino and Thousand Oaks. Complicating the challenge: the recession was brutal, causing many seniors to delay entry into senior facilities. Still, experts believe be.group is well positioned for continued growth as more baby boomers move into their retirement years. “As the economy turns around we’re going to see a focus on assisted living and long-term care, to make sure we’re taking care of our aging population,” said Heather Harrsion, vice president of public policy and public affairs at California Assisted Living Association in Sacramento. “I think all of the different care options have a lot of opportunities going forward. One of the things consumers want is a lot of choices.” Continuum of care Be.group serves about 5,300 residents in California and about 600 in the Valley. It manages 26 affordable living facilities, including six locally, and has two more 60-unit facilities in development in Duarte and Fresno. Largely funded by the federal Housing and Urban Development Department, they are expected to open in the summer of 2014. Residents, who must meet income guidelines, pay 30 percent of their adjusted income – usually about $3,000 a year out of Social Security checks – and the government subsidizes the difference. Victor Regnier, professor of gerontology at University of Southern California, said that waiting lists are huge for affordable housing industry because it’s deeply subsidized compared to market rates. If developers can come up with the money to build such structures, they have no trouble filling them. “Affordable housing is doing fine,” he said. “We have a lot of poor people and they don’t seem to be going away.” Be.group’s waiting list for its affordable living communities is eight years on average. Cochrane said it could be longer, but that’s the cut-off point. Be.group also operates 10 market-rate facilities, six of which are continuing care retirement communities. One of the assisted living centers is in Glendale. Residents often move into these type facilities as independent individuals requiring little to no care, usually around the age of 80. They remain in the facility as they begin to require more medical and personal assistance care, all the way through skilled nursing. Costs start with a minimum entry fee around $99,000, plus minimum monthly rent of $1,500. Residents pay primarily through a mix of income – Social Security, retirement savings, long-term coverage insurance or equity from the sale of a home. Be.group also operates four assisted living facilities aimed at even older seniors, with rooms fully equipped for extensive medical services. Residents usually move into these facilities around 86, when they are more frail and need more assistance. The facilities have a much smaller or no entry fee, but monthly rents are higher than regular continuing care centers and ultimately bring in the highest profits. Cochrane doesn’t apologize for serving wealthy seniors, noting the profits support the entire organization’s mission. Challenges Despite its variety of housing options, be.group was hurt by the recession. It earned a slim profit of $1 million on revenue of $54.5 million in 2007. It then proceeded to wrack up nearly $10 million in losses over the next three years. The organization cut about 18 care workers in addition to cutting its foundation staff by two-thirds and its administrative staff by a quarter. Cochrane said he expects the nonprofit to make a profit this year. The housing crash hit senior housing providers especially hard and the waiting lists thinned out. Cochrane said elderly people were reluctant to sell their homes in a down market to free up capital for assisted living. “What people do in a time of fear is they freeze; they don’t do anything,” he said. “It took much more effort and time to bring people across the line and make sales.” Regnier said the residential housing market, though improving, still presents a problem for the business because many seniors only want to sell their house when prices fully recover. “What you are finding is a lot of people are putting it off, hoping the housing market will come back,” he said. Stephanie Zeverino Jenkins, a spokesperson for rival Belmont, said she’s witnessed the trend of seniors keeping a tight grip on personal real estate, adding that she’s only recently begun to see an uptick in customers. “What the hold up has been over the last three or four years is that (older adults) can’t get the full market value out of their houses,” she said. “I would say we’re starting to see a lot more move-ins now.” Cochrane too is optimistic, in part because of the way the name change turned out. He said the “be” in be.group came from residents and their family members who were surveyed about a potential name change. The verb “to be” kept coming into the conversation, a word that is flexible and in tune with a modern concept of aging. It’s all in keeping with the number of baby boomers who are heading into retirement homes – all while controlling an estimated 70 percent of the country’s wealth.

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