We have been saying for years that there is a huge market for renovating any kind of senior living community, and that market will only grow as yesterday’s new development becomes today’s renovation project. And now, with the coronavirus pandemic, there will be a new emphasis on infection control and how to embed that into construction and renovation design. One company seems to have been ahead of the curve on this front, and we suspect their clients will be listening very closely in the future. We sat down with Tom Quinlan, the founder and President of Marion, Massachusetts-based South Coast Improvement Company, and Sean Whalen, Senior Vice President, to get their views on renovations in the senior care continuum, dealing with infection control and working in a living space.
Can you tell us a little bit about South Coast Improvement Company, when you got started and what you do?
Tom Quinlan: I started the company over 20 years ago as a painting company doing minor carpentry repairs, decks, siding, windows and trim, doing a lot of work in the condominium arena and education. We got involved with an assisted living provider that needed some deck repair work. Upon further investigation, the problem with the one deck was a problem with all the decks in the community. We developed a scope of work to address the issue and repair and priced accordingly. They accepted our proposal on the spot and we had our first project in the senior care sector. That relationship with that provider developed over time and we put a concentrated effort into marketing specifically to senior care providers.
The result was acquiring several more providers as clients who had a geographical reach up and down the East Coast. We began doing small projects in the buildings. Country kitchens, room upgrades, common area refresh. As time went on the projects became larger in scale. We designed a Memory Care unit on the back of a cocktail napkin for a client over lunch. That’s the way it rolled back then, and we were fortunate. In addition, we developed processes, which took into account that these were active communities with schedules and programming daily. We needed to be able to work within these communities and facilities with as little disruption to the daily lives of the residents and staff as possible. Over time, we perfected the procedures to minimize risk and ensure safe practices throughout the duration of construction. Occupied renovations in senior care are tricky and not for the faint of heart.
Sean Whalen: We are fortunate today to provide Construction Management Services to seven of the top 10 providers and a dozen or more of the top 100. We provide these services in 15 states and growing, up and down the East Coast, from Maine to Florida, as well as Tennessee, Ohio and wherever the next project takes us.
Do you do work in any type of senior living community? Skilled nursing, assisted living, memory care, retirement housing, CCRCs?
SW: Yes. It is the core vertical of our business platform and accounts for over 70% of our annual volume. We certainly see more work on the assisted living side as it is a very competitive market and the SNF’s have a different financial model that relies heavily on reimbursement from DPH or the equivalent in most markets. However, yes essentially we work in and have expertise in all those market segments.
What property type do you find is most often looking to do renovations or additions?
TQ: It is funny, when we started working in this sector, assisted living was relatively new and the clients we were working with at the time were trying to increase occupancy. They were looking to spruce up the main lobbies or common areas so that when prospective families visited they would be impressed. Finally, they realized that the residents and their families were most concerned with the condition of the apartments. This led to us developing room turn packages that allowed for fast upgrades as rooms became available.
In today’s market, the competition is steep; upgrades to rooms, common areas and exteriors are all common. The development and adoption of memory care units in existing facilities has been a driving force in the industry as well as the addition of beds or rooms when demand is there.
What is the typical project, if there is one?
TQ: There are several, actually. Usually we will see a common area refresh with a room turn package. Sometimes it is taking unused space or less used and converting it to a country kitchen or theater area. memory care has been very big over the last several years as well. Taking an existing wing and converting it to memory care or adding a MC addition either on top of an existing community or as an addition or stand alone. We also see many exterior work and MEP upgrades. Many of these communities are 20 years or older and were built with inefficient energy standards or products. People are paying a lot of money to live here and want control of their heating and cooling as an example. We are seeing a lot of conversions from old two-pipe to four-pipe systems in these communities as residents want the option to be cool in the kitchen and warm in the living room.
What is your average size of project, and what is the range?
SW: Today our average project size is in the $1.5 to $2 million range. We have done projects as high as $20 million with additions and renovations. For our long-term client partners, there is not much we will not do. However, I would say we have a ceiling of $25 million and a basement of about $200,000.
You do expansions as well as renovations inside a building where the residents and daily life are in full swing. How difficult is that?
TQ: Extremely difficult. As I mentioned earlier, it is not for the faint of heart. Fortunately for us, we have executed well over 300 complex occupied renovations up and down the East Coast for a variety of providers with a number of diverse needs. We have experienced “boots on the ground” supervisors who have executed these projects repeatedly and understand what needs to occur to execute a project successfully. I would argue that there isn’t another CM firm our size that has more experience or worked with more clients in this sector. Our clients keep coming back to us and negotiate many times vs. going out for a competitive bid because they know what they are getting with South Coast, and it takes a lot of the worry and headache out of the project. It is all about communication and process.
In normal times, are owners often hesitant to allow contractors inside an active community?
TQ: Sometimes yes, but not always. It is an inherent part of the business. These facilities and communities get used extensively, hence the wear and tear on the building starts to become evident in five to seven years. We have done renovations at buildings two or three times already over the course of twenty years
SW: By the way, the most gratifying thing is to be asked back into a building after you have already worked there. It shows a level of confidence in us that has been honed from execution and good work as well as keeping the residents and staff happy and safe. We are acutely aware of the sensitive nature of working in occupied buildings and are experts in our field. We like to tell our clients that if you have several projects going on at once, our project will be the one you don’t worry about.
You are certified in Infection Control Risk Assessment (ICRA). What does that mean?
TQ: ICRA is a practice that was developed for work within highly sensitive medical facilities. Think of hospitals and surgery centers, dialysis units, anywhere that a facility may be performing procedures on at-risk individuals. At risk for infection or complications caused by work being performed within a facility that by its very nature can cause particulate and dust to be dispersed into the atmosphere. You also have non-facility workers moving in and out of the space that have the potential to spread pathogens and germs. ICRA has developed a standardized practice that minimizes this risk. Things like negative air, hard walls vs. zip walls to seal off work areas. Full PPE, etc. It is a very detailed process and requires certification and testing.
We were fortunate to have several supervisors in the early days who were certified in the procedures. We were able to strategically place them, depending on the requirements of the job. The caveat is it costs more to run a project that way. There is a lot more oversight and hard cost to an ICRA project vs. a typical renovation. We found that many clients weren’t willing to pay the associated cost and were not as concerned about that. It worked for a great many of our clients especially since we were already taking extra measures to ensure compliance in the communities and safety.
SW: With the emergence of the COVID-19 crisis, we believe we will see more and more of ICRA being called for on occupied renovations in senior care communities. Hence, we are taking the proactive measure to get all of our supervisors certified. We will also educate our clients on the benefits and associated cost for ICRA projects.
How did that come about, and weren’t you a little ahead of the curve?
TQ: We were ahead of the curve when we offered this to clients five or six years ago. We thought it was something they would all want. When this coronavirus hit we were ahead of the curve on requirements on active job sites. Requiring handwashing upon entry to building, temperature readings on personnel throughout the day, a questionnaire that subcontractors had to answer before entering a site, these are all things we put in place before even our clients required it. Many of them just adopted our procedures as their protocols and best practices.
What is the cost of putting this in place, and how do you think the industry would be performing if they had all done it a year ago?
TQ: I will leave the answer to that to the experts. In my opinion there is a time and a place for the ICRA matrix. I don’t think it will become the absolute normal but I do believe we will see more calls for it when construction opens up in senior care. That is why we are taking this time… this Great Pause, to institute things like ICRA which will help us to get back to normal or the new normal sooner.
What do you think construction looks like post COVID?
Our feeling is our current COVID plan will morph into our on-going infection control plan. We think the new reality is our clients will look for us to partner with them in mitigating future viral outbreaks. In addition to ongoing screening, we will be offering Infection Control Risk Assessment (ICRA) on all projects and recommending site protective measures to further mitigate viral infections. We also are working with engineers to develop strategies to effectively mitigate the spread of viruses through the HVAC systems. We will also be offering hardware and finishes that have anti-microbial properties to further safeguard. We do see the reality of construction and renovations in senior living shifting and we have embraced that.
