Building Tomorrow: An Exclusive Interview with Avanti Senior Living Chairman & CEO, Tim Hekker

Goray: Tell us about misconceptions about the assisted living business.

Hekker: The world has changed a lot.  When I first started, it was mostly nursing homes – when you aged, you went to a nursing home – and they still do not have great reputations.  With all our different opportunities for seniors today, the concept of senior living itself has been changing.  For assisted living – which has also been evolving – when people see how beautiful the buildings are and the services we provide, the misconceptions quickly go away.  I’m sure most parents have said, “I don’t want to go to a home” because they grew up thinking the retirement home was not a good place.  I do believe that aging-in-place is ideal.  If your parents can stay at home and there are resources available for them to be taken care of, that’s a great thing.  Keep them where they feel most comfortable as long as possible.

Goray:  What are investors within the sector looking for today?

Hekker: Most investor groups have a favorite product, whether it’s data storage, etc…, and some of them are still doing that.  For the most part, I see investors sitting on the sidelines in our business, because of the capital markets. If you have a product to sell, you’re not going to see many bids unless it’s opportunistic.  Even if you have an “A” building that’s doing well, there aren’t as many people jumping into that party as we would hope.

Kosiba Edwards: What would the process look like if you were to start a new development?

Hekker: It starts with the feasibility studies.  We look for markets that include adult children, ages 45 to 65, with higher incomes.  They will bring their parents with them.

Avanti is very different from what we had built before.  The properties today are high-end and hospitality-oriented with many visual drivers: restaurants, spas, and other amenities.  And more than ever, it’s about finding the right people.  From a career perspective, will taking care of older people ever be sexy?  I don’t know, but there are some people who have a huge caring heart and they want to work with seniors.  Many years ago, looking for an executive director, we often had to go outside the industry.  Today, if you go out looking for someone, there’s a choice.  Other companies may not have our culture, but there’s less training when we bring someone onboard.  Fortunately, our corporate culture often attracts the candidates we need most.

Goray:  What does the sector look like in terms of gender diversity?  Is there room for improvement?

Hekker:  Looking back, in the C-suite of the company I worked for earlier, there were no women.  And that wasn’t a function of not wanting women, it was a function of not having anyone who met all the business criteria.  Today, there are more women who are driving hard and have been learning the business.

If you dissect the business, both at the product level and the buying level, it’s mainly women.  When we look for executive directors, we tend to find more women who care for our residents and are better with the employees.  And in building design and interior design, we are also seeing a lot more women.  We’ve gone from institutional-style buildings to a hospitality model, where you can’t tell it from a high-end resort.  Women now touch a lot of parts of the business.

Kosiba Edwards: A lot of business schools now have real estate programs, but you still don’t see many women.  If you’re talking to younger people in the industry, do they see real estate as having a different career risk profile?  How do they weigh their options?  Real estate might not look good now, but we know that will change.

Hekker: It definitely will.  Not many people go into college thinking they want to be in senior living real estate.  We get people who may be younger, but somehow in their life they’ve been touched by senior living.  When I go to NIC (National Investment Center, an industry group devoted to senior living) conferences, there are a lot of younger people now.  They’re driving the companies, the REITs … that change in demographics is clear.

Career Influences and Leadership Lessons

Goray:   What were the greatest influences in your professional life?

Hekker: Truthfully, for my career, Marriott was probably the leading place of learning for me.  I learned so much because of all the other divisions they had, and all the mentors they had; it was a huge learning opportunity for me.  I went to their first executive development school.  They took people from all their different divisions – people they thought were going to do something in their life – and brought them in for six weeks with senior Marriott people.  Their system required a 20-year Marriott veteran to supervise young executives.  Even though my mentor didn’t know a lot about senior living, it was a great experience.  I taught him the senior housing business, and he taught me all the things I needed to be successful.

Kosiba Edwards: We used to see a lot of real estate in private hands, in large families who had holdings, and so much has gone the way of institutional owners and public REITs.  As a private company, you’re not in that market – but you saw it when you were at Marriott.  Tell us about any differences.

Hekker: Marriott was probably the best career choice I could ever have made, from a learning perspective.  But to get things done, it took the blessings of a lot of people.  Today, I like running my own show and making my own decisions about where the market is headed:  how we change our product to respond to what the customers want, how we differentiate ourselves from the competition.  Having been in the industry so long, I can see what factors allow us to differentiate ourselves and operate better than others in the business.  I know what’s important in how a community is built and how the customers perceive it.  I’m an operator at heart, but I like the development side.

Kosiba Edwards: What advice do you have for people who are about to make the leap to start their own company, where they would leave a job and go out and raise capital?

Hekker: If you have a background in the business, if you have the ability, and if you’re young -- just take the chance.  If you keep living your life without taking a chance, it will never happen.  It’s never easy.

Kosiba Edwards: Investors, by definition, are always looking for opportunities to put capital to work.

Hekker: Right, and you need to find investors who meet what you are trying to do.  That can be a challenge.  When we were raising money for my first company, we were doing it in tranches and not trying to do too much at once.  It was a learning curve for me to find money in the amounts that we needed, because there are different types of players who will put in $5 million vs. $20 million.  I needed to learn who those groups are and how to sell to them.  In the end, they’re really buying you; buying your ideas and what you are trying to do.  It’s especially challenging if you don’t have a mousetrap, a platform, sitting there already for them to invest into.  I had to learn to sell “me” better.