• August 4, 2017

    Meet Jim Coughlin and Wendy Nowokunski, CEO and president, respectively, and co-founders of Burlington, Massachusetts-based Northbridge Companies. The senior living provider is known for being locally owned and operated, and today comprises a portfolio of 18 properties in Massachusetts, Maine and New Hampshire, having grown from roots as a single community.

    Spotlight on Technology

    Do you think the industry’s done a good job investing in technology up to this point?

    Jim: I think the focus on NIC data has been very, very important. As we attract more and more institutional capital, the devil’s in the details. You need to have the analytics to understand what’s happening in our industry. We’re just at the tip of the iceberg when it comes to what we’re solving for. We’re now moving, from a consumer standpoint, from the war generation and parents of the baby boomers to the baby boomers, and those folks are a lot more tech-savvy, and there will be folks that will be much more early adopters of consumer-based technologies.

    Wendy: In 10 to 15 years, consumers will dictate [everything]. A couple of things are happening today. Number one, this business is still very fragmented. There’s a huge percentage of nonprofits, small local providers, and a lot of national providers too. This is a high-touch business, not a high-tech business. How many times have you heard that? The adopting of technology is so strained for a lot of our people. Yet, you go into a hospital and everything is paperless. We as an industry haven’t gotten to that point yet.

    Why not?

    Jim: Hospitals are getting reimbursed for it. There’s a way to pay for it as opposed to the competition for our margin where we’re so focused on delivering. We’re constantly weighing the alternatives each and every day.

    Wendy: I think with the labor shortage, we’re going to have to have technologies to be more efficient. I think it’s going to drive it in the next 10 to 15 years.

    That’s a long time.

    Wendy: When I started in the business 27 years ago, I was marketing director. I had a little index card box and I put a little yellow, blue, or red dot to indicate whether it was a warm, cold, or hot lead.

    We are very slow to adopt new technologies. There’s all sorts of regulations, all sorts of reimbursements and so forth. Everybody’s kind of doing their own thing. It’s tough.

    Coughlin and Nowokunski brought different strengths to their partnership, which they formed after meeting 18 years ago. Through ups and downs in the market and experience gained in both ownership and management of senior housing communities, the two have also established an advisory business through which they guide other senior housing operators. We sat down with Wendy and James to learn about how they define success, why it’s very hard to scale a senior housing business, and where they are focusing their energy in order to buck the trend against national occupancy declines in senior living.

    Tell me about how you got into senior living.

    Wendy: I was in real estate for several years out of college. When the real estate market started to take a dive in the ’80s, I started investigating senior housing. Senior housing was just evolving in the New England area, and I got involved with a company out on the West Coast that was doing continuing care retirement communities. Real estate’s one thing — it’s concrete, it’s bricks and mortar, that was very exciting — but in senior living, you’re making a difference in people’s lives. Once it got into my blood I never turned back. I’ve been doing this now for 27 years. Jim and I met 18 years ago, and we were kind of friendly competitors in the business.

    Jim: For many years.

    Wendy: I was one of the founding partners of Benchmark. Jim was with Newton Senior Living at the time. We had had parallel tracks, but our paths never crossed. We met around 1999, when I came and to consult with Newton Senior Living. I came on board with them, and that’s how I met Jim. Jim is the financial, deal structuring guy, and I’m really in operations, development, and marketing. We looked at each other and said, “There’s an opportunity here.”

    Jim: I was in the multi-family business, where I could make a good living, but there wasn’t a mission or redeeming part of that business. I found my way into the consulting world for a nonprofit and startup of senior housing companies. Assisted living was a relatively new product in Massachusetts, so we learned as we went. One of my clients was Newton Senior Living, where I became part of the early team there. We grew that up to 27 assets, and thousands of employees, before we sold to Atria. I think what Wendy and I recognized in each other is that balance. As you know, this is a real estate business but it’s also operationally intensive. We have a partnership, we’re 50-50. That partnership enables us to make very balanced decisions. There are many stakeholders in this business, whether it be lenders, investors, associates, families we serve. We’ve kind of proven out that if you can strike the right balance between financial and operations, you can really have success.

    When you decided to partner, how did Northbridge form?

    Jim: Our previous employer was always a consolidation play, and we were very aware that at some point that company would be sold. We also noticed that given the nature of the capital that was coming into the business at that point in time, there was a huge opportunity for somebody that had our expertise and skill set that understood the balance between capital and development and operations. When we founded the company, we partnered with a family office that was thinking more long-term as opposed to the typical private equity and capital models. We’ve successfully grown that single relationship to 220 families that we manage money for. Many of these families are not looking to turn assets in 36 months, they’re looking for a provider like us that is very mission-driven and associate-driven and doing well. They’re looking for a return, of course, but they’re very focused on doing it the right way.

    Wendy: They really want to do well by doing good. That’s a very different model than what we’ve lived in the past. When created Northbridge, the larger companies were consolidating, and were not as focused on the consumer. We wanted to stay small and agile and build a company with the right capital. We were fortunate to find this family network because they enabled us to do creative things. It’s enabled us to attract really terrific talent that knows we’re in it for the long run and we’re in it for the right reasons, and family and residents know that too. We’re very visible in our communities.

    How did you find the family, initially?

    Jim: I had a previous relationship with the initial family, and then it was kind of organic. They introduced us to a number of ultra high net worth families that they had done business with in the past. It’s a very small collective group. As we performed and had successes with those early families, they said, “Well, you should meet these other families,” and it was very organic. We now have investors in the Colorado market, and in San Francisco.

    Wendy: It’s all word-of-mouth relationships.

    Are you ever tempted to go out and try and raise more capital?

    Jim: We’re constantly talking to new families. Some of these families, in the early days, were making very small commitments to us to kind of learn the business. I can think of one example where their first investment with us was $50,000. The last commitment they made to us was $10 million.

    Do you have ambitions to get much bigger?

    Wendy: We’re focused on New England only in our principal business, in our own advantage. We do have an advisory arm of our business where we do consulting for providers, lenders, and nonprofits on a national level. As far as our own investment and our own management, we stick to New England. We have 17 properties now, a combination of independent, assisted, and memory care, with some standalone memory care communities. We’ve grown through acquisition of assets, ground-up development, renovation, you name it. Right now we’re in New Hampshire and Massachusetts. Those are really great markets for us. In our advisory business, we are in Indiana, we’re in Florida, we’re all over the United States. Our advisory business enables us to look at opportunities, learn something new, and bring something new to the clients.

    At this point in our lives, we want quality of life for ourselves and our residents and our associates, and we truly believe having the ability to get out to our communities and to interact with our associates and our family members and our residents makes a huge difference in the fact that we outperform the typical trends. Our occupancy is around 93% to 100%. That has a lot to do with our visibility, focus, and allowing our teams to be creative and flexible.

    A lot of entrepreneurs are happy being the size that they are. Are you happy where you are now?

    Jim: I think we measure ourselves in a slightly different way. It’s more making sure that we’re doing extremely well in our platform. It’s not a matter of assets under management. We measure our successes by the performance of the assets, and what unique programs we can bring that are very cutting-edge. As an example, we have a relationship with some folks out of MIT right now, trying new technologies there. One of our investors is a principle of Google, so we have a lot of inbounds from the Google relationship. That’s the creativity, the uniqueness that we can bring to the table.

    We measure our successes by the performance of the assets, and what unique programs we can bring that are very cutting-edge.

    As 50-50 partners, when you don’t agree, how do you make a decision?

    Wendy: I think we both have the ability to see all sides of a particular equation. We have enough respect for each other to be able to say, okay, I may not agree with that particular decision, but let’s go for it.

    More from the Leadership Series

    Jim: I would answer in a slightly different way. We have attracted a very dynamic next level of management in our company. They have very strong and loud voices, so on many major decisions, they are weighing in heavily with what their position is.

    Wendy: Let me say this very bluntly: They squash us like a bug.

    James Coughlin and Wendy Nowokunski

    Picture 1 of 3

    It’s probably healthy though, right?

    Wendy: It is! You know, we are not a hierarchy type of company. We truly partner with all of our team and associates, and surround ourselves with people that are a lot smarter than we are because no one person has the answer. A lot of the people in our senior management have been with us for a very long period of time.

    We truly partner with all of our team and associates, and surround ourselves with people that are a lot smarter than we are because no one person has the answer.

    Jim: Decades.

    Wendy: There’s a very tight relationship there.

    Jim: We’re able to marry them with the millennials that have that passion, that drive, that desire, that are thirsty to understand how this business works and how they can make a difference. Having the experts partner with the folks that are really driving process has really worked well.

    Wendy: You don’t manage millennials, right? You partner with them and you inspire them and you include them in decision-making. I never like to categorize people because seniors have been categorized for years. “Seniors all want this” — well, seniors are just us when we’re older. We’re all individuals. You listen to them, you talk to them, they have great ideas, they know how they want to live and have absolutely phenomenal information if you just sit and listen. I think that’s what makes a difference all around.

    Jim: We view ourselves as facilitators. So it’s really breaking down the barriers, providing autonomy to our teams so that they can make that community theirs. I think that’s what’s starting to be missed a little bit by some of the larger players: the uniqueness to each of these communities. It’s not a cookie-cutter business. You really have to understand the nuances of a sub-market, a town, and the residents you’re serving.

    It’s not a cookie-cutter business. You really have to understand the nuances of a sub-market, a town, and the residents you’re serving.

    That brings up the bigger question: Do you actually think that we can have a national provider that does a good job?

    Wendy: Yes, I think you can, but it depends on how it’s run. I think you need to have the proper resources in particular regions. It’s very difficult to run a national platform from one office with regional [managers]. You really have to have responsibility in a particular market area — whether that’s through regional presidents or [some other structure]. A lot of the larger platforms are looking at consolidation of resources, and that is so challenging. You start saying, “Oh, well, I can acquire these 50 properties and consolidate the corporate overhead.” It’s very difficult.

    Jim: If all the decision making is being made at corporate then you’re probably going to start seeing some of your more talented associates go onto other platforms because they’ve lost their autonomy, and their ability to be engaged.

    Wendy: And creative.

    Jim: We see a lot of that in our advisory business: being out of touch with the nuances of a specific community. That being said, we have also seen platforms that have a very regional focus and are able to make decisions and create relationships with the regulators in those regions and be a business within a business. Those work extremely well because they are in tune to what defines success and failure.

    You said that the timing for when you started Northbridge was perfect because you had the experience and there was capital available to create the company. Do you see a similar environment today, where there is a lot of capital that wants to invest in operators?

    Jim: I think perfect timing is right when we started in 2004. It was actually the beginning of the real estate crisis. Everyone was focused on their own set of issues in their existing portfolios. We were in an enviable position because we had dropped all this capital when others were on the sidelines. We were very aggressive buyers of distressed land sites when others weren’t developing, and we were probably 24 to 36 months ahead of the big development boom we’re experiencing today, and the flood of new capital coming into the marketplace. We have always been contrarian to the conventional wisdom. We see some real pressure points on development right now with high construction prices and the lack of labor. We don’t see the velocity continuing of new product. We’re at a good point in the cycle where you’re going to see some new product come online in certain submarkets. Demographics will yet again catch up in 36 to 48 months, and it won’t be like we experienced a couple decades ago.

    Are you waiting for things to drop a little bit? Then you can come in and buy up distressed assets?

    Jim: I think we are stepping into some distressed situations; there are very few in our submarket. We’re also trying to be more opportunistic about looking the product needs of the next consumer. We’re having great success in our stand-alone memory care just because of demand for that product.

    You really, really need to be committed to the operations of that business and understand that.

    Wendy: I think a lot of people…don’t understand the intensity of the operations. It is a very, very different product. I do think there’ll be opportunities on distressed assets in the coming years. But as far as memory care in general, if you do it right and you do it well, you look at the demographic trend that’s coming: There is not enough product to accommodate the trend that’s coming. It’s frightening. It really is. Alzheimer’s disease is of epidemic proportions.

    Is Northbridge also offering memory care in your assisted living communities?

    Wendy: Yes.

    Does that ever get confusing for you in operations to operate both assisted living and stand-alone memory care?

    Jim: It’s more consumer-driven. What we find is 20+% of assisted living residents moving into a full continuum — independent, assisted, memory care — has some sort of planning for their future. That’s a safety net knowing they’re probably going to need that service in the future. There are other folks that like the specialized stand-alone memory care because they feel like there’s expert management that is very dedicated, and they’re not singled out of “us and them.” We’ve actually had a dynamic where we’ve had people move out of stand-alone assisted living, instead of moving to memory care next door, adjacent to it, and move into one of our buildings. Just because of the stigma of: ”I don’t want to go to the other side. It’s always been something I’ve been fearful of.” I think there’s a role for both components in the offering right now.

    We’ve started to see the National Investment Center for Seniors Housing and Care data show signs of real occupancy pressure on operators. How do you think operators get through this rough patch?

    Wendy: I think that you have to stay very focused on hiring, training and retaining the right people because they’re the ones making the difference in your day to day.

    Everyone loves to talk about it, but what are you really doing?

    Jim: I still consider this a relatively new industry. I think senior managers like us and the trade organizations have been very focused on creating awareness of the leadership component, the resident care directors, the executive directors, cultivating the training and there’s definitely a desperate need for more programs like that to support that. The reality of it is that we need to create more of the frontline staff. It’s the CNAs. I think the balancing act is: How are we as an industry going to cultivate exposure? We can’t continue to poach from the hospital industry and the skilled nursing facilities to get our best CNAs. We need to continue to cultivate and train those frontline staff because they’re the ones touching our seniors the most.

    How happy can you make someone when they’re making $12 an hour?

    Jim: I’ll give you a simple example. Wendy and I have a program at our company called Listen and Learn. On a bi-annual basis we’ll go and not spend time with the leadership team but with the frontline staff — dishwashers, CNAs, housekeeping staff. We say that we think we’re doing well, how can we do better? It engages them in actually being part of our leadership team. You see who are the spokespersons for various departments, you see that the reaction they get by just being solicited for their ideas. You see that they really have a finger on the pulse of the community itself. What comes out of those conversations is truly phenomenal. It also gives us the opportunity to thank them and recognize that we have walked in their shoes. Both Wendy and I came out of frontline positions. I started in senior housing as a dishwasher.

    Oh, really? You started as a dishwasher?

    Jim: I worked at a small platform called Suzanne’s Guest House and I was a dishwasher. I was 14. I was all of 4’2” carrying these steamer trunks up three flights of stairs because they came in for a week at a time. We served three meals a day so I graduated to being a waiter, but being part of a senior community was something that really resonated with me.

    So you knew about the industry before you were in multi-family?

    Jim: My mom was a nurse in geriatrics. Healthcare has been in our family blood. As Wendy likes to say she always grabs onto the young ones.

    Wendy: Every kid I get my hands on I try to get them into senior living. Honestly it’s so funny because you hear these big platforms, I think a lot of it is marketing speak: “Well we’re partnering with big universities,” but that’s not going to get you what you really need which is your frontline CNA staff. We do a tremendous amount with kids in high school to get them engaged in wanting to be part of senior living as an industry. It has been so incredible. When they were in high school, my niece Nina and Jim’s daughter Paige developed a program called Seniors to Seniors. They were both working in our communities.

    They thought: Seniors in high school need credits and there’s such a need in the communities to have volunteers for special programs, so let’s connect the two. They were inspired by a movie called Alive Inside, where a social worker had actually gone across country and was filming a music program with people with memory impairment that had been nonresponsive. It was amazing, the results.

    It’s fabulous. So they implemented that program at our communities, these two 17-year-old girls. They had exercise programs and gardening programs where the kids would come in. Every year we do a semester and we have a graduation and so forth, and these kids actually come later in life. We have someone who came in, she was an intern, and she ended up at the front desk of one of our communities. We trained her as a business office manager now, I mean, that’s what it comes down to. That’s a win.

    TECHNOLOGY

    Tell me about what you’re doing with MIT.

    Jim: Two gentleman that have been piloting an endeavor came to us early on, and because we are trying to be forward-thinking, we’ve set up a program to beta test as many different things. We want to be early adopters. This all started probably 12 years ago. An exec from Hasbro actually approached us because they were trying to change a number of their main options to the senior market. We worked with them for almost two and a half years in beta testing, and focus groups within our communities. It was great.

    Wendy: The residents loved it.

    Jim: They felt like they were part of something.

    Does anything actually come out of those?

    Jim: A lot of the consumer-driven products have had a difficult time getting their financial model to work within our constituency as an operator. You need crack that code — the consumer sees value and we as an operator can somehow not be absorbing the cost.

    Some of the technologies that are really starting to get some traction are the ones that are now starting to create efficiencies operationally and pay for it that way.

    What types of technologies are you moving forward on?

    Jim: How do you improve efficiency in scheduling? We’ve just finished and will continue to invest in this, but just the whole algorithmic data analytics [piece]. We engaged a gentleman who had just come out of Harvard Business School to spearhead that for the past year, and it’s been fascinating: the ability for him to analyze data that we’ve been looking at just in a simple Excel spreadsheet to a whole other extreme.

    What type of data are you looking at?

    Wendy: We have a tremendous amount of data through [a technology platform] and also have our own system to measure resident satisfaction and associate satisfaction. You really need to have the financial component, satisfaction component, and quality component tying all together. We’ve been putting it into a comprehensive dashboard, which is just fabulous. We can ask our operations staff about a property and they can pull up the answer in five minutes.

    The consumer-based products are a little bit more difficult because again: Is the consumer willing to pay for it? If the operator pays for it, what’s the benefit? I think that’s really the big challenge I see in a lot of these data tests. I will say that Hasbro has been fascinating because they sent it to us at the end, and my god: You just saved us hundreds of thousands of dollars in potentially rolling out something that would’ve failed. It was actually very beneficial for them because they were ready to invest millions of dollars and our residents gave them all these little [critiques]: No you can’t do this, no it takes too long, the pieces aren’t the right size — this, that, and the next thing. It was amazing.

     

    LEADERSHIP

    What’s your definition of leadership?

    Wendy: It’s the ability to clear the way for teams to do what they do best, and that’s serving our residents and our families. Never being afraid to be in the kitchen, clean up a resident — lead by example. When we look for leaders in our company, we look first for passion and the desire to do the right thing. If they have that, we can teach them the details of what it takes for a particular job.

    Jim: I would add to that in a sense that true leaders are bringing calm to a situation. This is an incredibly hard business. It’s an emotional business. You’re working with families at a very vulnerable time. We as leaders need to provide that moment of calm and not create our own hysteria. I think our whole structure, relative to us being a home office where we’re there supporting the sites as opposed to the sites reporting to us, is a very different dynamic from a lot of our competitors. We’re there to break down barriers, provide resources, be thought leaders, bring new ideas to the table, but also keep people focused. It’s all about care.

    What’s the biggest challenge you faced when you started the company?

    Jim: We were very fortunate. The original family that supported us had a patriarch in his 80s. He came to work every day and had more energy than the two of us put together. He said something very profound to me early on: “Here’s the benefit you have with my support — I want you to think like entrepreneurs every day but make business decisions like this is a legacy company.” Candidly, it was a huge differentiator for us because we were able to very strategically attract the right talent and build our core team when we didn’t always have the financial infrastructure to support it.

    What’s been the biggest risk you’ve taken in your career?

    Jim: Starting this company.

    Why was that a risk?

    Jim: Because I had a 5-, 3- and 1-year-old at home. Just to turn to my wife and say, listen, I could do what everybody else does and get the job with an acquiring company, or break out on my own. She said, “When are you going to get paid?” I said I had no idea. It was lean the first two or three years. Wendy and I made significant personal sacrifices, but bar none, it was the best decision of my life.

    Did your wife think you were crazy?

    Jim: Well she saw I was crazy the day I married her.

    Wendy: I was just going to say that.

    Jim: She knew that a long time ago.

    Wendy: I knew that in partnering with Jim, given that he had three young kids, that he’d have to work his butt off, right? This is good.

    Wendy what about you, what’s your biggest risk?

    Wendy: It’s funny. I actually started my own company years ago when I was very young. I’ll never forget my husband at the time.

    I just saw an opportunity because senior living was just evolving in the marketplace. He was like, “What are you doing leaving a perfectly good job to set out on your own? I go, “Well, I think it will present more opportunities in the long run.” I’ll never forget, we were cleaning our house out because we’re moving, and Ken finds my first year’s profit and loss statement from my consulting business, which was like $44,000 and I remember back then being like, “Wow! I did it!” It was just like the greatest feeling. It was just me and I made $44,000 and it was just awesome.

    Jim: We are serial entrepreneurs. This is my fourth startup.

    Do you think it’s a good time to be an entrepreneur in senior living?

    Jim: I think it all depends on what niche you’re pursuing…I think we’re in a very interesting part of the cycle where the market will not bail you out.

    Do you think there’s still need for general operators?

    Wendy: There is a desperate need for operators. A desperate need. What’s interesting is, because of all the consolidation that’s happened over the past 10 years, a lot of people have formed it out into bigger companies.

    It’s fascinating too because you see that a lot of the private equity firms and REITs are looking to regional providers to manage their portfolios because they know that they have a handle on that particular area. It’s very hard to partner with a national provider. We’ve done several distressed assets coming out of national providers. I do think there is a lot of that happening, and I think that there is a huge shortage, because part of the reason why our advisory business is taking off right now is because there’s such a lack of good providers.

    Then why don’t you just have 50 communities?

    Jim: I think it would dilute quality. From an operations standpoint this is a very difficult business to scale.

    It’s interesting. I’ve found in this business specifically, operators know their own capacity and I think everyone watching Brookdale and Emeritus, everything that’s happened. People are like: “I don’t want that to be me.” People are very careful with growth.

    Who would you consider to be your mentor and how have they helped your career?

    Jim: I’ve had the benefit of multiple mentors, most of which have been named Peter which is kind of weird.

    Wendy: I was just going to say he’s got this whole Peter thing going on.

    Jim: When I first got into the business, I had a gentleman by the name of Peter Butler, who brought me into his consulting business and really taught me the industry. Subsequently, he was actually on the board of Newton Senior Living. I look back on that, and he just had this ability to stay calm in the most stressing situations. I remember him sitting in a board meeting and seeing that all the board members were getting up in arms, raising their voices, and he just sat there and sat there and watched it. At the end he said, “Ladies and gentleman, we’re like a shark: If we don’t keep moving forward, we will die.” The room just shut up and the decision was made and we kept going. I took a lot out of that, out of just not adding to the hysteria. Just being practical, being purposeful, and ensuring that people have entrusted their careers with you as a leader. It’s a pact. You have to deliver. Part of that pact is to make sure that you are delivering each and every day.

    Wendy?

    Wendy: It’s my dad. Ever since I was little, he always said, “Don’t lose sight of yourself.” And he created this, he used to call it the seed in your stomach, to succeed. I’ve always had that in my stomach. I have the visual. Ever since I was little. I started working when I was nine years old. My mother had her own arts and crafts store, and ever since I was nine I was on work study. I had a work ethic that was dictated from both my parents, but in particular, my dad always had this certain structure for me. Every summer it was, okay, what’s our project? What are we going to do? I was always driven, absolutely driven from the way in which I was brought up. He just has this way about him; he’s very quiet and a bit of an intellect. He’s very much an intellect. We’d spend so much time just talking through what’s going on in society, what opportunities are there and so forth, at a very young age. When I was in high school I was a dental assistant office manager from junior year until I graduated. I started my own business to put myself through college. It was just that drive. It all started back when I was like eight years old, when he talked about that seed in my stomach.

    What do you think is the biggest challenge the industry faces today?

    Wendy: You’re not going to like this.

    Jim: It’s the truth. It’s people.

    Wendy: It is people. We never had to worry about recruitment 20 some-odd years ago. People were banging down our doors. It was never a focus. We spent a ton of money on marketing for residents. This year, we will spend as much time, energy, and money on recruiting, retaining staff as we do for marketing for new residents.

    Jim: We built a whole training center at our home office. Every eight weeks, we cycle various team members through that. It’s not just an orientation function; it’s developing best practices and marrying up different components of the business so that foodservice can understand the importance of their role in marketing. That program directors of memory care can understand the dynamics of financial performance of executive directors. It’s cross-fertilizing through all the various functions there.

    Wendy: The investment has proven itself out. Our turnover compared to national turnover stats is very low. I think we do a good job, but if you look out there there is a huge shortage of nurses, there is a huge shortage of healthcare workers. We need to create globally, because you’re constantly hearing: “Oh, there’s no jobs out there.” Really?

    Immigration is huge. You need to have an operating immigration program. Most of our CNA staff are from other countries. How do you create a robust program in order to make sure we’re going to have the nurses necessary in the years to come? Because when you look at the number of seniors that are coming, compared to the workers we have in the marketplace, it’s scary. I think that’s probably what you’re hearing from a lot of people. I think that is a major challenge. I know you’re tired of hearing about it.

    Jim: It comes back to our regional focus. We’ve had institutional capital come to us and say, “Why aren’t you building in this submarket?” Well, the labor market in that submarket. Because of the proximity to hotels and seasonality, you can’t find summer help.

    Wendy: We have a client that had to shut down a building because they couldn’t get staff.

    Jim: That’s really the Achilles heel in our industry right now: the people side of it.