In this special year-end episode of The Roots Podcast by 12 Oaks Senior Living, CEO Dick Blaylock sits down with President Greg Puklicz to recap a remarkable 2024 and discuss what lies ahead. Together, they celebrate 40 years since the inception of 12 Oaks, highlighting milestone accomplishments, including impressive occupancy gains, advancements in high-touch management, and the rollout of a new EHR system with August Health. They also share key initiatives for 2025, focusing on expanding value-based care, building a data warehouse, and responsibly growing the portfolio. Join us as we look back on the successes of 2024 and get inspired for the future of senior living.
You’re listening to The Roots Podcast by 12 Oaks, where we’ll be joined by industry leaders to discuss and highlight the character, competency and care that is required to successfully manage senior living portfolios.
Dick 00:13
Hey, welcome to the December 2024 edition of The Roots podcast by 12 Oaks Senior Living. I’m Dick Blaylock. I’m the CEO at 12 Oaks, and with me today is Greg Puklicz, President, 12 Oak Senior Living. Welcome, Greg.
Greg 00:28
Hello, Dick. Great to see you.
Dick 00:30
Glad to be on. Well, another year is done, and believe it or not, I’m sure you know this, this makes 40 years since the first 12 Oaks community was brought online in Irving, Texas.
Greg 00:43
It’s amazing. It’s quite a story. And that very community is still in our portfolio after having been owned for a while, manage for a while, wandered off into the desert for a while, but it came back and it seems like we’ve gone full circle on that one.
Dick 01:16
Yes. We have it’s very exciting. I’m proud of what we’ve accomplished this year and appreciate getting together here on the podcast and discussing 2024 and perhaps a little bit of 2025.
So, usually, those of you that listen to the podcast or watch it know that Greg hosts, but because we’re at year end and we’re talking about 2024, I wanted to take the mic and ask him some questions and hear about the highlights; hear about the challenges, the opportunities, new goals, and the focus for 2025. So whenever we’re ready to go, Greg, let’s go.
Greg 01:37
First, we need to talk about 2024. 2024 was one of 12 Oaks’ best years ever, right? We started the year with 40 communities under management, and, we’ve had some sales, some very successful transitions during the course of the year. A few properties we’ve helped our clients successfully sell. In particular, I’m really proud of two communities in Tulsa that we took over a couple of years ago. Two communities struggling with a different operator, low 70% occupancies. Client was very frustrated and had success with us on some other communities, asked us if we could help. We jumped in and the day of closing those communities in June of 2024 were 97 and 94% occupied. So, they were able to achieve an exit that met their goals and needs and, largely through their support and the efforts of the entire 12 Oaks team. So that was certainly one of our highlights to see a plan come to fruition.
We’ve seen a lot of plans need to be scuttled, changed, modified over the course of the last 2 or 3 years. So it’s good to enjoy some of the successes that we’ve had in 2024. Portfolio-wide occupancy has grown, 14, 15 points overall. The occupancy is recovering. I wouldn’t say we’re all the way there yet, but now have over a quarter of our portfolio with over 90% occupancy. Whereas a year ago, we sure couldn’t say that. We have a few communities that are holding at the 100% occupancy levels. So we’re really proud of that. The thing I think we’re most proud of is the stability we’ve seen within our staffing models at the corporate office and permeating down to all the communities. We still have a lot of work to do on turnover in the care positions, but we’re at about 94, 95% full employment across all positions at our staffing budgets across the board are being achieved or bettered. That results in opex being on budget or better. And with the revenue growth we’re seeing, we’re seeing a restoration, positive NOIs and positive margins at most of our community. So, it’s been an exciting year of growth, of stabilization, and being able to do a lot of really cool things that our communities.
Dick 04:33
Certainly. And it has been a great year. And, those are all key aspects of, of why we’ve performed so well. So I appreciate you sharing that. Is there any one of those things, though, that you might consider the greatest accomplishment for 12 Oaks this year?
Greg 04:45
Yeah, I think the greatest accomplishment for 12 Oaks this year is the proof of thesis of our management platform; of our a high touch model. So this is a model, Dick, which you invented many years ago and kind of created and we’ve been able to take this thing and really build on it. And the high touch model involves a lot of things. It involves, firstly, making sure our RVPs are properly resourced from our corporate office with support and sales care and compliance, admin back house support, the HR teams, the accounting teams to put our RVPs in a position to be ridiculously in charge of their communities. So that coupled with the fact that we only give our our RFVPs 5 or 6 communities at the most, and we like to see our RVPs in proximity to our community so they can spend meaningful time in those communities, has really shown this year to be the difference maker in the success at the communities in terms of stabilization of staffing, building good culture and good financial results.
So, yeah, the thing I think is our greatest accomplishment is believing in the thesis that you originally developed: high touch management, relational selling support, right, as much as possible from the corporate office and really focusing on the business plans for the communities and providing the proper resources to be able to get that, that is really borne out to be true through our results this year.
Dick 06:36
Right, exactly. And just to add a little bit to that, Greg, I think the model has also led to our record low turnover of executive directors at the communities because of those relationships that they build with those regional vice presidents of operation. They feel like they’re known, they’re seeing somebody staying in touch with them,
Greg 06:56
So know, matter, measure right in that order, right. That’s how we approach it. Yeah. And really proud of the efforts of the EDs and of the RVPs to bring the EDs and the entire trifecta leadership from the communities into the 12 Oaks culture and learn a lot of things through our impact training, first impression training. A lot of the things we do to build culture and build leadership skills with our,
EDs
Dick 07:25
Well, you talked about it a little bit, but maybe talked about a little more. The key initiatives that we implemented in 2024. And then what do we want to focus on implementing in 2025?
Greg 07:36
So in 2024, a couple of things that we were able to roll out. So first and foremost was the stabilization of the communities, and a robust impact training program through our HR team here. And that’s been highly effective. We hear a lot about value based care these days and how the value proposition of care can add a third leg to the overall value proposition of the evaluation model for senior housing generally, right? So we know that the properties, the prop co has an inherent real estate value. We know there’s values created through operations, right, the opco.
But the new member that’s entered the chat is health co, right? And value based care. And what that can do in terms of increasing resident length of stay, increasing rev par to communities and increasing resident family satisfaction at the communities through a more, medical as opposed to social model. So as a foundation to that, one of our key initiatives this year has been the harmonization and consolidation of our EHR systems across our entire portfolio. And we’ve partnered with August Health to do that. That rollout is in process now. And, by year end, we will have 100% of our communities and 100% of our residents, fully uploaded into the August health system. We’ll have it fully integrated with Yardi on a bi-directional basis, and with Align and Sherpa, our CRM, so that we have seamless data integration of our resident records. And that’s going to build the foundation for the next step of our initiatives moving into 2025 as we look to further roll out value based care opportunities across all our communities.
Dick 09:40
That’s a significant accomplishment, and the team has done a great job on that. Finally, so as I said a little earlier, we’re 40 years down the road here at 12 Oaks. Where do you see 12 Oaks going the next few years as we continue on this growth path?
Greg 09:55
You know, we’ve had great success, but we’re certainly not done yet. So a couple things. So I believe in scale in a responsible manner. We peaked at 40 communities and we’re at 35 today. I’d like to see us get to 55 or 60 communities. I think there’s opportunities with scale. There’s opportunities for ensuring we have the proper resources to support our communities, support our RVPs, and support our ownership groups that we work for. So scale is part of that equation. So I like to see us continue to build our portfolio and continue to partner with trusted partners in the health care and senior housing industry that are like minded, that are looking for quality long term outcomes for the residents and families that we serve. So that’s the first part of it. The other part of it is being a best in class regional operator here in the southwest. We are predominantly focused on Texas, but we do operate in Oklahoma and Arizona, Nebraska and some other states as well. So we do have the opportunity to really focus on this region. And when a REIT or investor group is looking to acquire a new asset or maybe needs a management transition, right, that 12 Oaks Senior Living is top of mind as the best in class senior living operator. Now, to do that, we need to continue to develop systems and stay at the forefront of many of the things we’re trying to accomplish. Value based care is going to be, as I mentioned earlier, one of our key initiatives for 2025 as we look to continue partnerships to provide physician care, Jerry psych, lab services, rehab services, therapy services in our communities, right. And being able to also monetize those opportunities for the benefit of the residents, ownership, and us as the operator. So that’s going to be a key focus for 2025 and moving into the future.
Something that I’m passionate about is building out our data warehouse. 12 Oaks has always had a stellar reputation for premier back of house capabilities, being able to push out reports, meaningful reports, meaningful data on a timely basis. And I want to continue to expand on that capability with the consolidation of systems, the integration of systems, the availability of AI to now collect and analyze data. We’ve got all this data available throughout our accounting system, our HR system, our schedulers, our EHR, our CRM, right. I want to pull all this data together and produce meaningful reports to be more predictive about things we need to do instead of being reactive to trying to fix things that have already happened. So data warehouse and reporting is going to be another key initiative where I see 12 Oaks emerging as a best in class operator over the next few years.
Dick 13:38
That sounds great. I can’t wait to see it happen. We’ve had a tremendously successful 2024, Greg, and that’s in large part due to your leadership and your encouragement of the team. We’ve got a great team and I’m excited to see where we go from here. Thanks for your time today.
Greg 13:53
As am I, Dick, and I enjoyed talking about 2024 and the future with you.
00:14:00
Speaker 1
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