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Episode 108: Rick Matros

Sabra Health Care REIT CEO Rick Matros discusses workplace culture, making an impact on people and Healing Ink tattoos.

This episode was recorded at NIC Spring Conference. 


Lucas: Welcome to Bridge the Gap podcast with Josh and Lucas. We’re at the NIC conference where the energy is continuing to rise here and we are bringing on thought leaders left and right. And this has been, candidly, a bucket list item for me. Well I’d like to welcome Rick Matros, the CEO of Sabra to the show. Welcome.

Rick: Thanks for having me. I appreciate it. 

Lucas: Yes, thanks for taking time. So there’s a lot to talk about and Sabra has been in the news for senior living. There’s a lot of different things, but we want to take it a little bit of a different direction because you’re a polarizing leader figure and we’d like to understand more about your background of what has led you to this point and how you’ve been able to develop a culture in a, I mean, a major league realm of processes and procedures and just kind of your idea of how you’ve done that.

Rick: Sure. So I went to grad school in gerontology and took my first job as an activity director in a nursing home. Actually, we were double hatters back then. I was activities and social services. You don’t do that anymore. But back then and got my administrator’s license. And the first job I had, the company went bankrupt in my third week and, but not like a bankruptcy today. We had debtor-in-possession financing all this. We had no payroll and I was 23 and I’m like, what the hell, right? But I, I really liked it actually. And my whole background had been psychosocial and I still to this day never had a business course. So I just had this acclimation for it that I didn’t know that I had. 

And so then after that I just pursued, you know, kind of turnaround opportunities and things like that and wound up with a company that was pretty entrepreneurial. So culturally it was a good fit for me. That guy who was running it sort of took me under his wing. Then we got acquired by a really large company and that was sort of very traditional, top down, buttoned up corporate culture. And, and I didn’t wear Brooks brothers. I liked European and you know, had earrings and my hair was long and it just, it was tough and, and I did pretty well there, but I just couldn’t breathe. 

And I kind of made a promise to myself that if I was ever sort of in the position to have some level of leadership that everything would always be about the culture. And and in that, you know, our business is a mission-driven business. And if you don’t have a culture where everybody that comes to work every day, it doesn’t what their position is, they have to believe they bring value to the business and they have to believe that you don’t think you’re any better than they are because you’re not, you may be have this position and make more money or whatever. So that may give you some different opportunities in life, but it doesn’t make you a better human being. 

And so I just sort of looked for those opportunities and those opportunities usually wound up in the realm to bankruptcy, bankrupt companies and things like that. So that’s really what I did. And you know, and that was so it was always culture and that was always the centerpiece of everything that I tried to do. ‘Cause that’s, that’s really the only thing that can differentiate you from the guy down the street that you’re competing with is your culture. And so and then so did a couple of bankruptcies and grew to those companies and actually left the industry about 20 years ago after I sold the last one that we had turned around with the team and I got into the dental business and the traumatic brain injury business and started two other companies.

And then, remember about PPS, there were a lot of bankruptcies and so I started getting contacted than I want to go into sun healthcare and we got them out of bankruptcy and we built them. And then about nine years ago, we created Sabra, the Reed. We spun it out ofSun, we took all the real estate and separated the two companies. And then I decided to jump over to the REIT primarily because I mean, I’d given my life to operations operations, as you guys know, it’s 24, seven. And and by then I’d been getting involved in a lot of other just causes and organizations that are important to myself and to my wife. And we knew we’d have sort of grandkids coming in all this, and I just needed, I wanted to have more time. 

And so at a REIT you really kind of a deal shop. And I went from 30,000 employees to seven in one day going from Sun to the REIT, which for most people is enough reason to make the change, you know. But and we’ve gone in nine years, we’ve gone from 700 million in assets to 7 billion. And we’ve gone from seven employees to 32. That’s it. 

So one of the joys, and this sort of goes to the whole culture thing, one of the joys of being at Sabra is, you know, when you’ve got tens of thousands of employees, no matter how hard you try, it’s hard to have that culture consistent throughout. You’ve got a lot of local, you’re a local leadership and everybody’s got their own styles. And it’s, it’s a constant challenge. But at Sabra, we pretty much have almost everybody in one place. And it’s not that many. And the way we structured it was we outsource- I didn’t want any traditional corporate functions. We outsource legal, HR, IT, payroll. We don’t do anything. So the only people that work at Sabra are the ones that are just focused on that mission, you know, investment specialists, asset managers, finance, that kind of stuff. 

And so I’ve been able to do everything that I always wanted to do for my employees. You know, everybody gets equity in the company. No one’s on the clock. Two thirds of our workforce is millennial. And so that kind of culture kind of suits that group. And we’ve had the same senior and middle management team since day one. No one’s left the company. And so it’s been two thirds of the workforce is female and it’s just been, it’s great. And we do things, you know, at the end in December, I take the, I take all the employees to Cabo for a couple of days just to have fun and thank him for the year. There’s no education, there’s no agenda. All my employees get invited to every one of our quarterly board dinners. So, you know, there’s no difference in benefits for anybody. It’s all, everything’s kind of the same. So, you know, it’s, it’s really been fun.

Josh: And so you just gave us a lot of history and a lot of success stories that I know there’s a lot of details behind. I appreciate the details you gave us on like what, what culture kind of looks like right now. Yeah. One thing, we’ve got a broad growing group of listeners that are leaders at a variety of different capacities and levels. Can you think of just from a pattern standpoint of all these different success stories that we had in a lot of different types of businesses and even different areas within our industry that you’ve been successful, what are some guiding principles that have been consistent that you’ve kind of deployed that you could kind of boilerplate for that maybe that young leader that’s saying, hey, from the experience, these are some principles that no matter what you’re doing these work to building great teams.

Rick: Sure. So one I think is you can’t be afraid to fail. You learn more from failure anyway, but you just can’t be afraid. And it doesn’t mean that you take thoughtless risks. You can take thoughtful risk and and what’s really the downside? If it’s thoughtful risk, it’s not going to destroy the business or anything. But it’s important if, if you really want to have that mindset, you’ve gotta be in a culture, in a company that actually supports that mindset. But that, that’s to me really critical because that’s what builds people’s confidence over a period of time is, man, I messed up and what I’m going to learn from it and be better for it. You know? And that part’s really cool. 

The other is is just really staying humble and you see people that become successful and you know, they just think they’re the smartest person in the room and all that sort of stuff. And for me, I always surround my, I looked at people that are smarter than me all the time to have my team and have completely different skill sets and all that kind of stuff. And I think you can’t, if you want, if you’re, if you’re successful at all, I mean, everybody that’s got any level of success with no matter what they’re in, whether it’s sports or academics or whatever, you’ve got a healthy ego. But that doesn’t mean you can’t be humble. And I think that humbleness is important. And when you lose that, I think that’s when you lose sight of what makes things work. And when you’re in our business, you’re not humble in our business? 

Josh: Right. 

Rick: Right, I mean, stuff happens all the time and you’re responsible for people’s lives. I think that, you know, if you’re fortunate enough to have any level of success, you have to have, you have to be self aware enough to make sure that you don’t let that stuff, you know, kind of get your head. Yeah. So those are just some guiding principles.

Josh: Yeah. That’s great. And so you mentioned you have I think, think you said you had a healthy number of the younger workforce, millennials and what are some things that you’re doing to attract that kind of group? Because obviously we need a lot of those folks. We had a student from Cornell on previously and he gave us a great perspective from a millennial’s perspective, which is great. We need to be hearing about that. But as an experienced leader, what are some of the things that you’re doing to attract them? Because they seem like they want a little bit different culture to work in. 

Rick: One I think, I think it’s somewhat, he’s with me, cause my wife says I’m a mental millennial, which I think is a shot. But you know, I’ll tell you, I think it’s a compliment. She thinks she’s, you know, giving me her shot, you know. But I think a couple of things when we bring them in and we talk about the job and all that kind of stuff and I try to meet everybody before, you know, they get their offers and all that kind of stuff. We talk about having an environment that is collaborative and we really trust them. You know, they’re not on the clock that we want them to be able to have balance in their lives, which is really a super, it’s a really big super big issue for them. And so, you know, there were cycles where, you know, in any business it’s 24/7, but then it’s not, and if you want to take a couple of days off and go hang with whatever or go do something, we don’t care. You know, we don’t care. 

And so I think having, having a culture where they know that they can make some of those decisions as long as they get the job done. You know, I think, I think it really helps. And I think the fact that we organizational structures are there to keep some semblance of order, but that doesn’t mean you have to go up and down to get things done. So that sort of cross communication, just go and talk to whoever you want whenever you want in the company. It’s the same thing with having employees, all of our team at the board dinners. I’m not going to be paranoid about my board members talking to whoever they want to talk to in the company. They can talk to whoever they want in the company, you know? And I think most people that have been around for a long time aren’t used to that.

My board members weren’t, they weren’t like used to that, you know. But for, you know, younger individuals for, you know, people in their twenties and early thirties to have, you know, that kind of exposure and trust. I think that’s really what it is. It’s a whole exposure and trusting. You know, I’ll sit around and talk to them that Pat, whatever. It doesn’t even have to be about the business that sometimes they just go through some crap and they just want to talk about it. And you know, sometimes it’s easier to talk to someone that’s older that isn’t your parent. Right. And so we have a small enough group, I think that why not do all that stuff

Lucas: You read about leaders struggling with actually, you know, you take on the problems of, of your team a lot of times and you almost have to be a psychologist and you have that background in training. It seems like that those have really been inner woven to create a successful team.

Rock: Yeah, no, that’s, that’s a really good point. I think I’m, I was a psych major in college and kind of psych and gerontology in graduate school and I think that’s, that has really helped me a lot. And you know, it’s helped me to trust my instincts. You know, you can look at deals and you can look at things and you’ve got all these numbers, but at the end of the day you’ve got to just feel like it’s right. You know, and it’s the same thing when, like when I interview people that come onto the team, I don’t want to have a conversation with them about their abilities because they’ve already interviewed with two other people so I know they’re technically competent. I just want to have a conversation so I can get some sense just from a chemistry perspective, if I think they could fit in the culture. There are some people that flourish in environments that are more prescriptive and there’s nothing wrong with that, but if that’s what you best function, you’re just not going to make it with us, you know? So it’s just, that’s where I think it’s helped me with a lot of that.

Josh: So peel back the layers a little bit. You know, it’s fascinating to me. You’ve got so many irons in the fire, so many success stories leading a huge organization as with a lot of deals and, and making a lot of things happen now. How do you stay fresh? How do you stay hip? How do you stay cutting edge and how do you keep these fresh thoughts?

Rick: I think a couple of things. I practice yoga every day and never miss a day, whether I’m on the road or not. Not that actually helps a lot. And I don’t just love tattoos. I’ve been getting tattooed for 30 years, but I’m involved with a project called Healing Ink. where we bring really well known tattoo artists from the States to Israel every year and they tattoo survivors of terror attacks, IDF vets that have physical wounds and PTSD. The same group was just in Virginia in December. It was a one year anniversary of the massacre there. We had tattooers at the Post Disco in Orlando with a shooting, shootings where, so it’s a way for people to reclaim their bodies and heal in a way they didn’t think they could. 

And so there’s a point to all this and so I’m being involved. So I’ve gotten really involved, like I know a lot of tattooers and we’re really good friends and all that kind of stuff, which is the opposite. I just came from the City Bank Conference and I was at the Wills Conference last year to talk about groups that I interact with that couldn’t be like more different, right? 

Josh: That helps keep you fresh. 

Rick: It does help keep me fresh. And we were, we were in Israel with a group in November and we’re sort of in the van and, and one of the tattooers, his name is Southpaw, is playing these songs and they’re like, what is that? I’m like, Oh, that’s from De Baby’s new album. They’re like, what? Like everybody, and everybody in there was like in their twenties and thirties, right? Okay. That’s the baby’s new album. 

Lucas: You’re in the know. 

Rick: But I, you know, I make recommendations to my kids all the time. So I, you know, I buy new music every week and that, that really helps it. Yeah. You know, ‘cause I never really understood how people hit a certain point and they don’t listen to anything after that. You know, you can see that with younger generations if you know anything before, you know, 1995 right? And know anything about it. And I just, I love music. So every week I look at everything new that’s coming out and I pick stuff and- 

Lucas: -you taste, you’re curious. 

Rick: Yeah. That makes sense. 

Josh: I love that. Well, and it’s, it’s refreshing to see. Honestly you know, I’m just sitting here and I’m looking at these tattoos and I’m thinking, I bet every single one of these have some kind of meaning or there’s something, some significance in a story you’re able to tell through that and sounds like the, I would call it a ministry what you’re doing in Israel with that mission of Ink as you referred to it. That, that’s pretty awesome.

Rick: Yeah, it’s It’s really, you’ll see really cool stuff in the story. You’ll play, you’ll see videos. You’ll just, you guys will cry, you guys will definitely cry. 

Josh: I’m definitely gonna check that out. Yeah, we’ll have to talk offline. My dad is about over there about six months out of the year, so I have a great appreciation for Israel and I’ve spent a little time over there myself, so that’s fascinating. I’ll definitely have to connect with you on that. 

Rick: Yeah, I get there a lot. I work with a lot of different groups there. 

Josh: That’s awesome.

Lucas: So do you have a favorite tattoo or one that’s really kind of, kind of like, it’s hard to say like you can’t pick your favorite child. 

Rick: It’s usually, but this one is actually one of my favorites. It’s the sacrificing. You’ve got Abraham, Isaac, the lamb, the angel. 

Josh: Oh yeah. 

Rick: There’s a lot going on. 

Josh: There’s a full story going on there. Yeah. 

Rick: Yeah. And this was done by Wassim Zuke who’s got a tattoo shop in the old city in Jerusalem is the oldest tattoo business in the world. His family started it in the year 1300 in Egypt and it’s been passed down from generation to generation, so over 700 years. 

Josh: Wow. That’s unbelievable. 

Rick: Unbelievable.

Lucas: Incredible. 

Rick: So I’ve got, I think I like five from him. So he’s just, he’s plus, he’s just an awesome dude. So he’s a Christian Arab living in the old city. Yeah.

Josh: So talk about real quick, I know we don’t have much time left, but you know, we talked with a couple of different REITS and it seems like rates are the traditional rate model. They’re having to get a little bit creative with the changing of times. Are there things where you, you have some initiatives or some things that you’re trying to do in partnership with operators to, to try to work with the changing culture and environment of care?

Rick: Yeah, so I think, so a couple of things. One, we’re a little bit different than our peers in that I’ve spent my whole life as an operator, my CFO’s from the operating side. My whole asset management team are operators. And that’s not typical of a REIT. You know, most REIT asset managers are super smart. So the MBA… 

Josh: Financial market guys, right? 

Rick: And so we speak the same language and we understand the ups and downs. And so I think there’s just from again, going back to culture, from a cultural perspective, and when I was running, when I was on the operating side, I had leases with every REIT. So I kind of knew kind of who I liked too. It didn’t like, you know, and all this kind of stuff. And so so there’s that part of it that we were, it’s easier for us I think to get involved in doing some different things with them.

But then outside of that, we are, we’re in the first REIT in the behavioral space. We’re in the addiction space. The addiction space is a brand new space, really. It’s very young. And we just formed our first two relationships on the addiction side. And fortunately our country too many years too late, policy is changing and there’s a level of awareness that mental health issues are real and the addiction issues are diseases and so that’s a spin. Those are spaces that are relatively new to us and as I said, no one else has really in them. It’s a little bit hard to grow in them because there aren’t that many tried and true operators. So it’s going to take a while. I think it’ll be incremental. And in the addiction space, there’s a lot going on with trying different models. You know, everybody thinks everybody hears about 12-step is also a really high recidivism rate. So is it, is that program as effective? And, and I mean, you guys are in the business, how many times do you think you’ve put a cookie cutter program together and that’s going to be good for everybody? So, you know, we’re trying to align with operators that are taking sort of a different look of things and, and having things like we would do in our facilities, whether they’re skilled or senior housing where you’re going to tailor things specific to the needs of an individual. So, so we’re really excited about being in those two spaces and you know, hopefully be a good capital partner that will result in some good for folks.

Josh: Well, I, you know, I wrote you, you sparked a thought because I’ve often thought on the addiction space I think most often, at least me when I think of the addiction and those types of care communities or facilities, I think of younger people. But, you know, with psychotropic drugs and seniors, I personally witness a lot of addicted senior adults to medications. It seems like the, do you think there’s ever a spot or a growing sector of within the addiction that we’ll see that specialize towards senior adult addiction?

Rick: Yeah, I think at some point, and you are seeing that in the behavioral space where you’ve got the complete age range that gets treated. And so I do think you’ll see that I think it’s a ways off, but look, the opioid addiction brought a whole different level of awareness and the only problem I have with the whole thing, and this is sort of just be my political statement, it’s because it hit middle-class white America. 

Josh: Sure. 

Rick: You know, no one cared about the crack epidemic, right. Cause it was inner city. 

Josh: Right. 

Rick: And it was imported. 

Josh: Yeah. Right. Exactly. 

Rick: So so that’s why, I mean I’m glad it’s all happening now, but it’s just that kind of stuff is always interesting to me. It’s like, yeah, okay, soccer moms have opioid addictions. We’ve got to put a lot of money into it. 

Josh: There’s a lot of truth to that statement. There really is. 

Rick: But it’s, it’s needed. It’s just, I wish we’d get to a point where everybody’s treated with the same level of importance in terms of services.

Josh: Absolutely. You know, truly it’s a great, it’s a really great point. It is so fascinating. It’s fascinating to see how our industry’s changing the challenges that are creating what we, we like to say with every challenge, there’s a great opportunity ahead and so we’re excited about that. It’s fun to see the culture you created at multiple levels and, and just the whole vibe that surrounds you. That’s really cool. 

Rick: I appreciate it. You have to have fun. Otherwise, what’s the point? 

Well one of the fun things that NIC is involved with that I have the honor of being some influence in with the Future Leaders Council here is a university outreach and we know that that’s actually a big part of what you’re doing at your Alma Mater. Can you talk about that?

Rick: Yeah. So it’s really, I think only been in more recent years that our industry’s really been viewed as a valid career path for well educated people. So I think it’s incumbent upon those of us that have experienced that had been around, whether it’s to our alma maters, if they don’t have any programs like that to other schools that are trying to do that sort of thing and go there and invest in time in there. I do classes every year at the gerontology school, beyond just sort of speaking stuff and all that and some mentoring. You know, they need, students need to see that they could have viable careers and not just viable careers, but be in a job where you really make a difference in people’s lives. 

And one of the things that I always loved about being a nursing home administrator is, you know, you get out of school, you’re 23 or 24 years old and you’re running your own business. It’s got, and you, and you have to learn everything. You have to learn clinical stuff and business stuff and marketing stuff, right? And you’ve got all different kinds of employees with different skill sets and, and it doesn’t matter who you work for, you are the leader in that organization and you’re imprinting it. How many other jobs? 

Josh: None. 

Rick: Right? 

Lucas: Nowhere. 

Rick: And that’s, you know, and if you’re someone who’s got some of that independent streak or you know, you want to be a little more entrepreneurially, whatever, what a great environment to do that. And so it’s, so, to me it’s, there are so many levels on which it should be really attractive to people. And I, I think for the new generation that really likes to have that sort of independence and they kind of want to do it the way they want to do it. I mean, you still have parameters in which you’d work with, obviously, but, you know, I just think, I think there’s some really good opportunities there. So I think, I think we all need to spend time doing that kind of outreach and showing people that, you know, they can have a really fulfilling professional career life.

Josh: Totally agree. And the statement that you made, we need to go there. You know, that’s it’s really easy for us to throw a stone at the educational system and say, Hey, they’re not creating programs to, but I think we kind of do a job, a sucky job at getting out and telling our story. So we got to do more of that. So that’s really encouraging that you have those efforts. We’ve heard that more lately that more people are following that lead and getting out and doing that. We’ve had a little bit of an opportunity to do that ourselves. And the students just are there, their eyes light up when they start hearing about it and they’ve never heard about it before and they’re like, wow, almost anything that I’ve been studying in school business or not business, I can apply that in senior living at some point.

Rick: Yeah. And plus other countries are so far behind and you’ve got huge demographic issues like in Asia. Like one of the things we see it at the SC school is there’s a ton of international students and they really do want to learn and we’re not here just to serve the elderly in our country, we want to just serve the elderly period. And so to the extent you can do anything to impart something to students that are coming here from, from other countries, I think that’s really important. Important as well. 

Josh: Yeah. Fun conversation. 

Lucas: Absolutely. So let’s round out the show with, let’s, let’s talk a little bit of business, Rick. So what’s on tap for a Sabra this year? What are we going to see?

Rick: So for us it’s all about focusing on growth. We we did a merger a couple of years ago. There was a lot of noise associated with it. We knew they would be, but we were trying to reposition the company and, and get it to sort of be a little bigger and stronger. And and so we finished the repositioning about the end of first quarter last year and then the rest of last year was focused on the balance sheet. We delivered. We did our first two investment grade bond offerings and that was part of the result of that merge and getting into investment grade. We redid our credit facility. We have a billion free on the line. And so we just, we finished basically all that repositioning. So now it’s, you know, let’s really focus on growth and plus keeping it simple. The street where public, the street doesn’t like noise. We had noise for about 18 months. It, they’d rather have bad news cause they can model bad news. You can’t model noise, you know. So we’re trying to, even though I like doing value creation things, we’re trying to stay away from all that, just sort of, you know, more predictable stable kinds of things. But it’s all about growth for us. 

Lucas: So good. So good. Well, we’re rooting for that and I’m sure without a doubt the, the successful continue to follow you guys. Well Rick, thank you so much for taking time at a busy schedule at NIC here in your home state. You don’t live too far from here. 

Rick: Newport Beach. 

Lucas: Nice, nice. 

Rick: A couple of hours up the road.

Lucas: Enjoy this incredible weather here. And so we’ll definitely connect with you and your organization in our show notes. I’m sure that our listeners are gonna love this and have some questions. And for our listeners, you can follow us at and all of our social media sites. Shoot us a DM. We’d love to hear from you and thank you for listening to another great episode of Bridge the Gap. 


Thank you to our supporting partners NRC Health, OneDay, TIS, Morrison Living, Argentum, Solinity, and The Bridge Group Construction. 

Episode 108: Rick Matros