• Posted on July, at 16,

    Meet Jeff Fischer, president of Irvine, Calif.-based MBK Senior Living. As a division of Tokyo-based Mitsui & Co., LTD, the company embraces “Yoi Shigoto” or “the good work” as part of its core values, now spanning six states and 34 owned and managed properties. With an eye toward growth, MBK recently completed its largest-ever portfolio transaction with the acquisition of nine WESTliving senior living communities in Arizona, California and Washington.

    Spotlight on Technology

    As soon as you acquire a new opportunity, is there a goal to invest in technology?

    It’s a focus for us right now. I think everybody in the industry is behind the times to some degree, including us. We’re stuck with some paper-based manual systems, and we’re looking at some different software companies and senior living software, and we are vetting out some different pilot projects. We’re trying to look at what is most efficient for us so that we can change.

    Do you think technology is part of providing an individualized resident experience?

    Absolutely. I think having devices that allow residents to interact more easily with their family and health care providers enhance the individual experience for each resident.

    With an admittedly accidental start in senior living, Fischer began his career as an executive director and later rose through the regional ranks of Emeritus Corp. prior to its merging with Brookdale Senior Living. He then took a role with a real estate company based in California, and was later named president of MBK in February 2017. We sat down with Fischer to hear about his lessons learned along the way, why finding talent in senior living is more than just a modern day problem, and how MBK approaches technology to help in its day-to-day operations.

    Senior Housing News: Tell me about how you got into senior living.

    Jeff Fischer: Like a lot of people, I got into it by accident. I was laid off from one company, got an interview and started out in healthcare as a business office manager at a skilled facility 27 years ago. It just kind of progressed from there.

    What industry were you in previously?

    A small family business, doing office work and finance.

    What attracted you to the skilled opportunity?

    It allowed me to stay in the business field, running the office, collecting insurance proceeds and so forth. It fit with what I had been doing. Then I got into the senior living side.

    How do you make the transition from skilled nursing to senior living?

    There was another lay off, unfortunately. I was looking for a position and through somebody I worked with at the skilled facility whose mom was in senior living, I got an interview for an executive director position. I was basically hired with no experience and learned by trial and error and the school of hard knocks.

    Tell me about your first year as an executive director.

    I spent nine months in my first building, which was a really challenged building in Clearwater, Florida.

    What was the name of the company?

    It was Emeritus at the time. It was 37% occupied with lots of challenges, in a bad part of town. I got there and set the expectation for the team members. Several decided they weren’t up for that level of expectation and left. The remaining members settled in and started growing that building.

    I ultimately transitioned into a regional operations position overseeing the portfolio in Florida, so I spent five years with Emeritus in different positions.

    Did you enjoy being an executive director?

    Yes, it was a learning experience, but to be in charge of an entire building was good for me. It was good for my growth.

    What did you learn running at 37% occupancy?

    You’ve got to have the right team dedicated to everybody being on the same page and working toward common goals and, ultimately, making sure that you’re working together to bring unity to the community and focusing on the results.

    What was it like making the jump to managing a regional portfolio?

    It was challenging, because I had spent so little time as an executive director—about nine months. Actually, the COO of the company said, “Don’t do it.” He thought I should spend more time as an executive director, but my boss at the time really pushed me. Thankfully, I was able to go back to the COO and say, “Thanks for the advice, but it worked out anyway.”

    Any mistakes you made along the way?

    One of my biggest mistakes that was a learning experience for me was holding on to an executive director for too long. I felt she ultimately had the skill set, but it just wasn’t the right fit for her. She had been promoted from a nursing position to an executive director and ultimately we had to part ways, but the learning for me was she had moved too fast in order to prevent slide in the community.

    How did you end up in your current position as president of MBK?

    I moved out to California two years ago with a real estate company that was starting a brand new senior living platform. The reason I took the job was not only that I could grow from ground zero, but there was a promise that the operations would come in-house. I got a call from a recruiter and MBK was looking for the president position. Timing was good, and my experience of learning for the previous 14 months on the growth side of the business in addition to my many, many years of operations experience made this a good fit for me.

    What’s it been like with MBK?

    It’s been fantastic. It’s been a whirlwind, at a little over a year now. We acquired three properties [off the bat], [and our largest-ever] portfolio acquisition [in July]. So it’s been fast-paced and very, very busy.

    MBK’s investors are from Japan, correct?

    Correct. Our parent company is Mitsui, based in Tokyo. They have 400-plus different conglomerates around the world, but senior living is an important part of their business. While it’s a small division, their parent company has [capital] and a desire to grow, and that’s a fantastic combination. We’re looking to grow our platform significantly over the coming years.

    What company were you working for previously?

    Steadfast Companies, which is a real estate company focused on multifamily developments, but they were breaking into senior living.

    Did you learn a lot coming from real estate?

    I did. My whole career had been on the operations side, so to learn more about acquisitions and the deal and negotiations and contract work that goes in to either development or an acquisition was a good learning experience. Again, while I have a role in operations, I do have a VP who operates the communities directly, and I focus more on the growth side.

    Do you think you’re going to have more respect for both sides because you’ve now had experience with both?

    Absolutely. I think it gives me a little credibility when we have our leadership conference. When I stand in front of our entire company and speak about the things we need to work on and improve upon, I think it gives me the credibility that I’ve been there and done that.

    Tell me about the growth projections for MBK in the next 12 to 18 months.

    Our portfolio deal adds a handful of communities, and then in the beginning of next year, we’ll start looking at other acquisitions.

    John: How big is the portfolio acquisition?

    Jeff: It adds 1200 units, but it’s a 350 million-plus purchase for us—the biggest, by far, in the company’s senior living history.

    Why is the company from Tokyo so interested in senior living in the U.S.?

    This iteration has been around for 14 years, and certainly now with the demographics of seniors growing for the next 20 to 30 years, senior living presents a very viable real estate option with good returns. I think now more than ever, because of demographics, we are looking to grow bigger.

    How big?

    It’s not a set number, but if we can acquire the right properties in the right locations, we would like to get to upwards of 10,000 units.

    What’s it like working with the home base in Tokyo?

    It’s good. We report through Tokyo as well as through Mitsui in New York. Everything we purchase and everything we do gets approval both domestically through New York as well as through Tokyo. It presents some challenges in the sense that you have to get a lot of approvals for things, but at the same time it’s been a great learning experience for me. Then to learn a new culture and to spend a little bit of time in Japan will be fun too.

    Is it fair to say Mitsui wants to grow but it’s taking a measured approach?

    That’s accurate. There’s a desire to grow much larger, but growth is only going to come with the right moves, the right locations, the right price point. They want to make sure things are done right.

    Jeff Fischer, President of MBK Senior Living

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    These assets seem like they are very expensive right now.

    I think it’s very much a seller’s market. If you look at national numbers it seems like the market is softening but at least in the markets where we are looking it’s still pretty expensive.

    Have you had to walk away from a lot of deals?

    We’ve turned away a good handful in the year that I’ve been here, yes, either because it was the wrong location, the wrong fit, it wasn’t the right type of building or the right value-add opportunity. But again, we’ve been busy with the acquisitions we have.

    This isn’t just a real estate business, it’s an operations business.

    Do you think there are enough operators out there?

    I think ultimately there are so many, including little mom and pops that manage one or two properties, but I think there are plenty of operators out there and I think we’ll see some consolidation as time goes on.

    Everybody keeps talking about consolidation, but it really hasn’t happened yet.

    I’m with you. There’s been talk about it for years and years, and I think it’s going to be a slow process, but I think for a lot of the smaller operators for whom it’s very costly to do business, the right offering price will come in and they’ll sell. It’s not going to happen overnight, and you’re not going to just all of a sudden see two or three operators own the world, but I think it will pare down to some degree.

    With the value-add opportunities, what specific value are you looking to add?

    It can come from many different perspectives. Maybe there’s a value-add from a management perspective where the building was poorly run or maybe you can convert part of the building from independent living to assisted living or assisted living to memory care. You make a transition in the neighborhoods themselves, or maybe you do an addition to the building to add more units. There’s a variety of ways that value-add may come in and you just have to evaluate all these different things.


    Why do you think you’ve been behind in terms of technology adoption?

    I just think it’s a sign of the times. You don’t want to be the first one into the space and jump into something that’s unproven. You want to make sure if you are going to invest significant dollars and time bringing in a new platform, that it works and it’s right for your business. There’s just a lot of trust that you’re going to build up with that software company or provider to make sure that they are offering what’s going to work for you.

    What types of technology?

    Everything from electronic health records to table-side dining ordering — everything that makes the operation more technologically advanced and efficient so that it cuts down on the amount of paperwork and duplicative entries in our systems.

    You’ve brought up the words “health care.” Do you see MBK as a health care company?

    Jeff: That’s a great question. In most states we’re considered residential facilities, and it’s a really slippery slope, because we’re considered residential. But people don’t come here just to live. They’re coming because it’s need-based, whether they have care needs or socialization needs or whatever. They are coming for a reason, and you are providing care.

    “…people don’t come here just to live. They’re coming because it’s need-based, whether they have care needs or socialization needs or whatever. They are coming for a reason, and you are providing care.”

    We are taking care of a high acuity resident, and you have to have good technology to individualize that resident’s needs.

    Is MBK bringing in outside care or are you providing it yourselves?

    We provide it ourselves. There are always residents who will bring in home health or other private services or whatever the case may be.

    Do you see home health as an opportunity to build those health care services?

    Nothing is off the table, but it’s certainly not a focus for us right now. We just want to continue to grow our platform and acquire the right buildings. When the time is right, maybe we’ll look at other other business channels. But we’re leaving that to the experts right now.

    In terms of acquiring new buildings and tough pricing for buyers, how much more pain do you think there is yet to come?

    I firmly believe that it’s still a couple of years. I think there will be continued downward pressure on occupancy and rates we can charge.

    I think both of those will cause a lot of pressure in the next couple of years. Eventually as some of these different developers moving into the space either filter back out or some consolidations happens, I think it will ease up, but I think we’re still looking at a couple of years.

    When MBK does a turnaround project, what is the biggest challenge?

    It all depends on the market. In some markets, staffing is absolutely the critical piece. [The industry is concerned about] staffing challenges, wage rate pressures, lack of talent in the industry plus the number of jobs moving into the space in the coming years. It’s just going to cause that much more pressure.

    It’s a big focus for us right now, trying to groom our own ‘farm system.’ We’re working to provide training internally and groom people to be ready as we acquire buildings.

    Do you think you’re well placed to do that given your history of rising through the ranks in senior living?

    We have limited resources as every company does, but we want to try to put a lot of focus on keeping our turnover low so that we can offer those advancements and training opportunities and help people feel good about where they are. We have to be ready to go.

    With respect to the staffing crisis, how much of it really just based on how jobs are paying?

    Pay is always an issue. We’ve done wage increases in multiple locations over the last year just because they’ve been in challenging markets. More than anything, I think it’s the lack of talent in the industry. I talk to our internal recruiting team almost daily and ask them to be very creative—asking them to try to find different segments or populations we can attract into the space, because that’s going to be key for us over the years.

    What are some of the creative ways you can attract that talent?

    Looking at different segments of the population, whether it’s younger millennials coming out of school, or semi-retired folks looking for something to supplement their retirement. We are trying to attract people who may never have thought about senior living as an opportunity.


    What’s your definition of leadership?

    One of the key aspects is being a good listener. Listening to the needs and desires of your teams. To me, the most successful leaders work tirelessly and focus on putting a team together. They put their egos aside and focus on the customer. At the end of the day our residents and their families are the customers. We put them at the forefront. Sometimes you have to forego a dollar today to do the right thing. It pays off in the long run.

    During your senior housing career, what’s the biggest challenge you faced?

    Talent. Of all the years I’ve been doing this it always comes back to the basic blocking and tackling in the industry. There’s no secret sauce. It’s finding the right people and the right talent and grooming them so that you’re working for some common goals. It’s always about the people in this industry.

    For 20 years you’ve been working on the same problem. Have you found any solution?

    I think I’ve personally gotten better. It’s an endless quest to find good talent, to provide good training and groom them for what you expect. I personally, as well as the companies I’ve worked for, have very, very high expectations. Even if there is a lack of talent, we’ll struggle to find the right people.

    Sounds like you hit those dead ends along the way, but you managed to keep finding your way through. Is that a challenge still?

    Not really. I think there’s plenty of  opportunity in the industry. If you have the drive, and the determination and the passion for it, I think there are opportunities there. I worked for a couple of companies over the years that weren’t the right fit for me from an ethics standpoint or an integrity standpoint, but in finding this role, we spent a lot of time talking about the culture and what’s important. There’s ample opportunity but you have to put yourself in the right position.

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

    I think the biggest risk was moving to California after spending my whole life on the East Coast, and going from an operations perspective into acquisitions, where I had no experience.

    What’s the best piece of advice you’ve received in your career?

    I think the best piece of advice is always having a plan B and making sure that you keep your goals ahead of you. Always have an option to turn to so you’re not locked into one thing. If and when that fails you don’t want to be left without a plan B.

    I think the best piece of advice is always having a plan B and making sure that you keep your goals ahead of you. Always have an option to turn to so you’re not locked into one thing. If and when that fails you don’t want to be left without a plan B.

    Whom do you consider to be your mentor?

    Probably my greatest mentors were a COO, Carl Johnson is his name, and my second was Sue Farrow, who owns Integral Senior Living. I worked with both over the years and learned from them about leadership and what to focus on, and how to grow the right business within senior living. The way they handle themselves and the way they treat people was great insight to me in how I’ve modeled my career.

    When do you think the industry starts to figure out how to overcome the current challenges?

    Two to three years would be my guess. I still think there’s a lot of development going on — it slowed to some degree and then it picked back up. It’s coming in small waves. I think in two to three years some of this will stabilize and some of the units that have been built will be absorbed.

    Last question. If there was an executive director like you were back when you started, what advice would you give that person?

    I wouldn’t have hired myself 20 years ago. I had no experience! But I’m amazed sometimes, looking back on how I got the job. I would tell that ED to put in his time. Make sure to read a lot. Make sure to listen, more than anything. Attend to regulatory updates. Stay in tune with the business. Go to conferences and learn the comings and goings of the industry, and just be diligently focused on their residents and their business at hand.

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