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236: Damon Thomas

Damon Thomas, BTG Ambassador and FSLA Board Member, discusses tips for navigating owner-operator relationships and the approach to take. 

Recorded at Florida Senior Living Association (FSLA) Conference.

Lucas
Welcome to Bridge the Gap Podcast. This senior living podcast with Josh and Lucas. We are in sunny Orlando at the FSLA conference with one of the board members here and a BTG ambassador. We want to welcome Damon Thomas to the program.

Damon Thomas
Glad to be here.

Lucas
Yes. Great to see you again, you know, it’s been many years since I’ve seen you, but fond memories of being here in Florida and rubbing shoulders with you. You are an incredible advocate for the industry and you didn’t just start yesterday.

Damon Thomas
No.

Lucas
You’ve been at this a little while. You started very young, right?

Damon Thomas
But see the gray hairs now.

Lucas
We all got ’em. We all got ’em, you know you’ve, you’ve dedicated your entire career, really to the senior housing industry. How did you even get started in senior living?

Damon Thomas
Well, went to Bridgewater state college, the Harvard of Boston. And after I graduated there, went to physical therapy school with a gentleman by the name of Chris Gay, who you all may remember. We went to physical therapy school. After physical therapy school, they were paying nice sign on bonuses back in the day. And they said, “we’ll send you anywhere, and this is how much money we’ll pay you.” And Chris Gay and I jumped in a truck and ended up in Anderson, South Carolina. Two Bostonians with heavy accents in Anderson, South Carolina. We were the therapy group. After we worked in therapy for a while, they changed the reimbursement rates and they weren’t really favorable. We weren’t excited about it. Chris Gay left, became an executive director in a building in Hendersonville, North Carolina. He called me, needed a salesperson. And this is the part that bothers me to this day. And Chris, if you’re listening, I love this story. I filled the building, he got promoted. How does that work?

Josh 02:45
You know, no comment there, no comment.

Damon Thomas
Yeah. And I know Chris is gonna say, it’s not true. It’s totally true.

Lucas 02:52
Well, you continue to rub shoulders with your buddy, Chris. I think you guys then moved on Emeritus, there was Brookdale. You’ve really gotten to seeing a lot of different experiences with big operators. You’re now in a new role at elegance. And we’d love to dive into that in, in just a moment, but give us some perspective because you’ve got that, right? Is that things have changed. And it’s not just two years of COVID. A lot of things have changed. The relationships between owners and operators, REITS and operators, private equity and operators. There’s a lot of change in the marketplace. Can you unfold some of that, of your personal experiences?

Damon Thomas
So Emeritus and Brookdale is the start of my career predominantly about 16 years. And the day the announcement of the mega merger was my wedding.

Damon Thomas 03:46
You know how when you walk at the aisle, pick a side. So we had one side of Emeritas, one side of Brookdale. It was a very interesting wedding to say the least. We had a lot of fun, but that’s where it all started. And I love the relationships that I had, I got a lot of great education. And after the mega merger, it became really difficult. I saw a lot of great people, this isn’t a dig on either organization, but a lot of great people get pushed to the wayside. And some of them, quite frankly, it was great, right. We talked about Chris Gay, as an example with vitality, we talk about Chris Hyatt as an example with new perspective. I could go on and on but everyone in their own way Chris Belford went to a REIT I believe he’s back in the ALF world.

Damon Thomas 04:39
Justin Hutchins was in involved in that, he’s in the REIT world now. Right, right. So it went from, after that mega merger were exploded our industry. And so you have the big, you have the small, you have the just dabbling in it, and then you have the, a lot of people also playing in the the referral business as well. So, so lots and lots of changes. And then you hit on it briefly is the change in the REIT, in the private equity, in the relationships, in the field and the way those are structured. Yeah, it’s been a lot of fun over the last couple years to say the least.

Josh 05:25
Well, talk about that, the relationships a little bit, because I feel like that’s becoming kind of this under the surface bubbling, you hear it in maybe the hallways talking about the relationships and the improvement in the relationships that need to happen between and operators, ownership and management. But we’re still not hearing a whole lot of it out actually in panel discussions or publicly talked about. So can you elaborate a little bit on that from your experience and maybe what you’re hearing hearing, and maybe some of the insight, I mean, you’ve got so much experience. How do you see a path where we can improve some of that?

Damon Thomas 06:05
Well, it’s tough, right? One of the reasons why you don’t hear about it a lot is because you’re sort of, you’re damned if you do, you’re damned if you don’t situation. It’s you know. However, if you go into the relationship with a good conversation and you come to a lot of those early agreements early they can be very good relationships. In the earlier part of my career, when this was all new I mentioned Justin Hutchins earlier, Justin I think was the one who, who launched out into the world on the REIT side first with NHI. And then if I remember correctly, and I think this is mostly accurate when Justin left, Eric Mendelson went into NHI after Justin. So now you’ve got two ALF guys with experience in the REIT world. And then Justin just exploded. He’s with Ventas now, he did some things across the sea or whatever.

Damon Thomas 07:03
So wow. That really disrupted the business because now our capital partners have a lot of knowledge that they didn’t have before. If you remember, if you remember in the past, the way it was was that we get a certain management fee or however it’s done. And then they drive away. We take care of it. Boy, those are the good old days. Now, if if you get Justin across on the on the other side of the phone, I had Brian Voss who was also Emeritus. I had Chris Belford who was also Emeritus. It gets a little bit more challenging. Now, those great, those fellows are great. Okay. But it’s an interesting discussion when they know what the heck they’re talking about. You can’t just come to the conference call thinking you’re going to BS anybody.

Damon Thomas 07:54
So now today, the triple lease you’re seeing thos go away. The performers are a lot different now, everything, the way it’s been written. And the middle part of my career without naming names, there were some really more difficult relationships. Whereas I was over Texas and Florida as an example with an organization and one of the partners wanted me solely for Florida. So I did it for the operator, said, “sure, let’s do this.” And I did it for the operator for the deal, because it was a good one. However my new partner was the REIT and everything wasn’t rainbows and unicorns And so that’s why, so when people say, I bet y’all hear this a lot, “why so much turnover in assisted living?” Well at the end of the day, it’s easy to make moves at at the community level, but what they don’t know is everything else that’s involved. It looks like an ED, a salesperson, or this or that, and it’s pretty simple. Oh, heck no. There’s a hell of a lot more behind the scenes. So as you can see, it’s getting more and more complex on those relationships. So I hope that answers your question.

Josh 09:14
Yeah, it does. And I think you were very generous and kind of the one perspective is there are a lot of the equity side, the ownership side, the REIT side, that there’s a lot of educated folks that understand the business that are, that are now in that, which does….I actually like that, it’s a good amount of accountability. You can’t BS your way through things, right. But on the flip side of that, I think chasing the aging demographic, there’s a lot of capital partners, ownership groups, REITs coming and emerging. And they have a lot of people on the bench that are not educated in the industry. And and I do think that’s also causing some turbulence because you’re having the same kind of conversations except the person across the table.

Josh 10:13
Oftentimes doesn’t know what they’re talking about. And they’re talking with someone like you that is, is running the show, been running the show for years and you understand operations and you understand the decisions that we make today can impact team members, and people’s lives, our resident lives and their family’s lives. It’s a trickle in a domino effect. So I think sometimes there’s very short sided. decisions made from C-suite sometimes and financial analyst views that oftentimes are not good for our industry because they’re not enough balance of taking the operator, the managers perspective into consideration when they’re mainly trying to drive shareholder equity. And I that’s a real balance because we’ve got to drive. There’s a business side to the business. There’s a human side to the business. And it’s gotta be kept in balanced. And I think if we can figure out where those checks and balances need to be, that’s probably some of the secret sauce in there that’s way over my pay grade. But it feels like it. Do you have any thoughts on that?

Damon Thomas 11:21
Yeah. Well I will say everything’s improved tremendously. one of our lenders is Providence One. Our relationship is fantastic. I think it’s you establish the ground rules up front. So for instance, who can call who and when? I mean, we were in a board meeting yesterday, I think it was, we were laughing about, on how a REIT partner won’t get an ED who’s heading from one community to another, an hour or two drive and they’ve got to pull over because they’re going to pick pick a rug color. I mean, come on folks. Or what hat the, what is our occupancy now is? And so there’s a lot of things that have to be ironed out first, those expectations. The calls, when are the calls going to happen? How long are they, what does that agenda look like as opposed to rapid fire? So we’ve really evolved to where we are today, but before it was that. It was sort of like this same, same type of thing, actually. We had the lights, you were sitting there and, and the re would be there. And they just, you know, question after question, after question, and then you’re like, “Whew.” You either did it or you didn’t.

Josh
Yeah.

Damon Thomas
But now it’s a nice partnership a lot. And you made a great point. The fact that we’ve got a lot of players, educated players on the other side now makes it in some way a heck of a lot easier because they’ve done it. They’ve been there, done that. So whenyou ask for forgiveness as we all are with our labor and our struggles, they get it, they get it. They’ve been there to wash the dishes, to, cook the meals when no one else has.

Josh 13:05
So, absolutely. So changing gears just a little bit, a man that wears a lot of hats, you’re on the board for the Florida Senior Living Association. Our listeners can probably hear a ton of excitement, background noise as we’re getting here to actually see things going on. A lot of energy here. This association, the board’s doing a great job, so kudos to you guys. So some of the major challenges facing our industry, I’m sure with as much senior living as happening in Florida, it’s like the epicenter of trying to problem solve some of these. So as a board member, as a board group, what are some of the key things like on your table right now to help your association, to ultimately help your members with right now? Can you speak to that?

Damon Thomas 13:51
As far as what the board, what we’re trying to, what we need to do to help our folks that’s right. Well, let me do, let me do this first if I may. First is I would recommend that anyone who isn’t with the Florida Senior Living Association, that they really take the time to join. And the reason why is because of the networking, the friendship, the leadership the legislative support that we’re doing in Tallahassee and the resources. These guys have an intimate knowledge on what’s going on in the industry so that they are basically are protectors and are advocates. So first off I gotta put that plug in because if I don’t, it would be wasted. Having that been said one of the things that we’re doing right now, one of the big items is that we’r looking into is tort reform.

Damon Thomas 14:45
An average claim, I think this is correct an average claim for an assisted living for a slip and fall or whatever payout is about $250,000 for an assisted living resident slip and fall. Ask me how much it is for an independent. I think it’s 150, excuse me, $157,000 for an assisted in about $150,000 for an independent. So you’d think it would be tremendously less or whatever. So on average, it’s about $250,000. Even if the claim is frivolous. The hospitals this, is what the tort reform’s all about, the hospitals and the nursing homes aren’t paying that for an average claim. So something’s terribly wrong with that. The reason, one of the reasons why it’s that way is the doctors have incredible insurance. The hospitals have multiple lawyers. We’re not, we don’t have the deep pockets and that’s why everyone’s coming at us. So the tort reform is a big issue.

Josh 15:43
Yeah. We could probably have two or three episodes about this. It’s a very complex issue, but you’re exactly right. And what people don’t realize. And I think even largely our show, the listenership is the decision makers, which a lot of them get it in our industry. But a lot of people that don’t get it is the consumer side of the audience, the residents, and their families, because they’re seeing cost of care increase, which means accessibility for them is decreasing. And so what they don’t realize is that a lot of issues like this, that we’re really pushing for is pushing their cost of care just to an unaffordable rate. And that’s what the operators to stay in business are going to have to pass along this increased cost.

Damon Thomas 16:32
Well what about, this was up your alley. What about when everyone had to add generators? We didn’t just go, “oh yeah. Let’s just add a generator.” No offense to former governor Scott, but that was a heavy lift. It got him where he wanted to go. But but boy for the ALFs, it drove out a lot of providers. And that was just one example. So think about these things that keep on getting added to a plate, and I’m just glad to see our industry thriving again. We’ve got a nice runway of success coming on. Our censuses are starting to come back strong. Our rates coming back strong. But we’ve also been through a lot. So after the we’re just shelling out money and then we’re in the pre-pandemic, pandemic, and now we’ve got these layers of COVID that keep coming back. So it’s like we’re just taking one hit after another.

Josh 17:28
Yeah. Well, you know great reason to get on board here with the Florida Senior Living Association, we can firsthand a test. Not all state associations are created equal. And we’ve been very impressed with the content, the education, the networking, as you said, and building those relationships, it’s extremely important, whether you’re an experienced operator, whether you’re, I mean, there is so many new operators popping into the market and it would be scary to think entering into this environment without an association and friends and networking to help with the legislature. So thanks for joining us today. Thanks for having me. Yeah. It’s exciting. We’ll connect our audience to you.

Lucas 18:10
Damon Thomas, thanks for spending time with us today. Vice president of operations at elegance, senior living, and a Bridge the Gap ambassador, thanks for championing the efforts of the entire industry and also the podcast. We’re going to make sure that we connect our audience and all the friends and people that already know you in the show notes. People can go to BTGvoice.com to download this episode, read the transcript, connect with us on social. And thanks for listening to another great episode of Bridge the Gap.

 

236: Damon Thomas