EXPERT OPINION: A Conversation with Tim Buchanan

Timothy Buchanan,
Owner/CEO,
Legend Senior Living, LLC

In this "Expert Opinion" interview, Buchanan talks about his sales team and their activities, about handling the moving-in of new residents, and about what he thinks makes his company stand out from the competition.

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Tim Buchanan serves as owner and CEO of Legend Senior Living, LLC. Legend owns and operates retirement and assisted living residences in Kansas, Oklahoma, and Florida. Buchanan served as chairman and CEO of Sterling House Corporation from 1991 to 1997 after co-founding the company in Wichita, KS in 1991. Sterling House, a national provider of housing and services to seniors, completed a successful IPO in 1995 and by 1997 owned and operated in excess of 100 Senior and Assisted Living Facilities across the nation. In 1997 Sterling House Corporation merged with Alterra Healthcare. Buchanan subsequently served as president and vice chairman of the board of Alterra Healthcare, operating over 350 assisted living facilities, until his resignation in 1998.

Contact Information:
Timothy Buchanan, Owner and CEO
Legend Senior Living, LLC
7309 East 21st Street
North Wichita, KS 67206
316-616-6288
info@legendseniorliving.com

 
Interview Transcript:

Steve Monroe:
I'm here today with Tim Buchanan, CEO and founder of Legend Senior Living, a fast-growing assisted living and seniors housing company. Tim, why did you start Legend Senior Living and how big are you today?

Tim Buchanan:
Steve, I left Alterra Healthcare in 1999 and stayed out of the industry for a non-compete period and got back into assisted living in 2002 with the purchase of a property in Florida. And I just really do enjoy the services that we provide and the impact that we have on the quality of life for people that we serve. I love the interaction with the industry and the people that work for us.

Steve Monroe:
And how big are you today?

Tim Buchanan:
We have just under 800 units today in Florida, Oklahoma and Kansas.

Steve Monroe:
Now, occupancy in the industry has been a big problem and a big focus lately. But you just opened a new assisted living and memory care facility in Oklahoma City in late August with 66 units, and it completely filled in two weeks. How do you explain that?

Tim Buchanan:
Well, to be honest, a lot of that, as I'm sure you know, were presells and we had our director and our sales team onboard about eight months before we opened the building. And they worked tirelessly in recruiting new residents: in marketing the property, doing direct mail, and hosting open houses at our sales center. We had a sales center within a mile of the property, so we were very much a fixture in the community long before the building opened. And of the 66 units, we had 59 of them presold before the building opened. And then we sold the balance of them in that final week after the building opened.

Steve Monroe:
But normally people expect, especially in today's market, a 12- to 18-month fill-up time. You weren't anywhere near that.

Tim Buchanan:
No, well, we got a six- to seven-month head start on that fill-up time, and actually had people that purchased. They put down their non-refundable community fee for their apartment when we were framing the building. And they remained our customers, some of them for as long as five months before the building opened.

Steve Monroe:
And that's pretty unusual in assisted living, I think.

Tim Buchanan:
That is unusual. You think oftentimes of assisted living as being a crisis-oriented decision, when in reality some people really can remain your customers and stay on your waiting list for four to five months.

Steve Monroe:
What problems did you encounter with that many residents moving into the facility in that short of a time period?

Tim Buchanan:
It was incredibly stressful. We had a lot of our paperwork preplanned and prearranged and done ahead of time. And when they started moving in-we did this over the course of a week-we had concierge assignments, with members of our staff assigned to a handful of customers. And their task simply was to make sure that that customer was taken care of in every respect. So we didn't have customers coming in and wandering around and looking for someone to help them and answer their questions. We were proactive with that and actually assigned people to be a concierge and to take care of whatever was needed. And that minimized a lot of the confusion, minimized a lot of the stress on the part of the families and the residents.

Steve Monroe:
Have you ever been able to do this kind of fast fill-up with any other facility any time, anywhere?

Tim Buchanan:
We had a lot of Sterling Houses in some of our Alterra buildings that filled that quickly 10 years ago when we opened them. We were opening buildings fairly frequently-every week-and many of them that filled up had really strong presales and filled up in a very short amount of time.

Steve Monroe:
How are the competing facilities in Oklahoma City doing? Are they 100% occupied? Is there just that kind of demand?

Tim Buchanan:
I wouldn't say that they're all 100 percent occupied, but Oklahoma City is not a crisis city. Most of the properties are 88 to 95 percent occupied and the ones that are near where we built this building are all 90 percent plus occupied.

Steve Monroe:
With this particular property, do you offer anything special or different from your competition?

Tim Buchanan:
This building, the building itself is significantly different than other buildings in the Oklahoma City market because of the arrangement of the common area and the type of common area that's in the building and the types of services and programming that are allowed to be offered within that physical setting. So that's distinctly different. And we've been able to communicate that to the customers as they understand the difference in the services we've been providing with our memory care programming and within the type of social atmosphere that we have for the assisted living customer.

Steve Monroe:
Did you hire an outside feasibility firm to do a study for you to figure out that there was this pent-up demand, or did you do it all on your own?

Tim Buchanan:
We do all of our own internal demographic studies. Our lenders have outside studies done after we've identified the market, and they validate what we have found. But we've always done our own research and demographic studies ahead of time.

Steve Monroe:
Okay. And what do you say to people who state that the assisted living industry is a need-based service, and residents can't wait until a new facility opens?

Tim Buchanan:
I think that's true for some assisted living customers. But we opened a new building in Florida a couple of years ago and it filled in a matter of just a few months. And we had the same situation there: Many people put their money down months before the building opened and remained in our sales cycle, as I call it, for four to five months. So I think there are a lot of customers who can wait, but there are definitely those customers who are impacted by an episodical event, a traumatic event-a fall, or an illness, or a death of a spouse-who really need to move now. Our last units to fill in Oklahoma were the memory care units. We had the assisted living units sold out ahead of time. The memory care units have always been the last ones to fill because it is significantly more urgent for a memory care resident to find placement. And unless they're living someplace and they're moving to you from a competitor, they really can't wait. The family wants to find something for them immediately.

Steve Monroe:
Do you think you're going to be able to replicate this kind of fill-up and demand any time soon or anywhere else?

Tim Buchanan:
Absolutely. Expectations are very high for the management team. We have a great team of operators and marketers that are very savvy and very skilled at these presales, and expectations are high. We have another property, in fact, in Oklahoma City that's going up that has excellent presale activity. The ones that we have under construction in Florida have been getting great response off of the signs. So we look forward to many more openings like this.

Steve Monroe:
All right. Well, good luck and thank you for spending time with us.

Tim Buchanan:
Thank you, Steve.

 
Recorded September 11, 2008