Pioneering female seniors housing leader and proud mother of two Green Berets, Kathryn Burton Gray, Founding Partner at Seniors Capital, shares insights into the history of capital markets from her 35+ years of industry experience. She also discusses trends in real estate development, operations, and services, as well as how the new administration plans to address economic deficits that will impact the seniors housing industry.

‍

This podcast was recorded at the 2025 ASHA Annual Meeting. 

‍

Produced by Solinity Marketing.

‍

‍Become a sponsor of Bridge the Gap.

‍

Listen to more episodes here.

Intro

Welcome to season eight of Bridge The Gap, a podcast dedicated to informing, educating, and influencing the future of housing and services for seniors. Powered by sponsors Aline, NIC MAP, Procare HR, Sage, Hamilton CapTel, Service Master, The Bridge Group Construction and Solinity. Produced by Solinity Marketing. Bridge the Gap in three, two.

‍

00:39 - 00:52

Lucas McCurdy

Welcome to Bridge the Gap podcast, the senior living podcast with Josh and Lucas. And a beautiful day here in Arizona. We have a great guest on the program today. I'm very excited about this. Welcome Katherine Burton Gray, founding partner at Senior Capital. Welcome to the show.

‍

00:52 - 00:57

Kathryn Burton Gray

Thank you. I'm really excited to be here. And you can call me KBG I think everybody does.

‍

00:57 - 01:03

Lucas McCurdy

All right, all right, all right. Look out. The KBG is on the way. There you go.

‍

01:03 - 01:04

Kathryn Burton Gray

Be afraid.

‍

01:04 - 01:19

Lucas McCurdy

Very afraid. I know we are a little scared of this, but first thing to talk about, you're just getting started in seniors housing. This is your first year. You're looking forward to it.

‍

01:19 - 01:21

Kathryn Burton Gray

I hope they like me.

‍

01:21 - 01:26

Lucas McCurdy

Obviously, I'm kidding you. You got started at a very young age, and you've been at this a little while.

‍

01:26 - 01:33

Kathryn Burton Gray

11 years old, and about 38, 39, 40, something like that.

‍

01:33 - 01:34

Lucas McCurdy

You've seen a thing or two?

‍

01:34 - 02:10

Kathryn Burton Gray

I have seen a lot of strangeness in our industry. And candidly, when we first started out, if you remember. It was mostly a hospitality model, and then it went to a health care model and then now our combo model. And so, yes, I've seen a lot of changes. And now we're having the next generation come in. So all the people that have started this industry, they're bringing their children in the nepobabies. And so it's exciting because it's coming in with a different perspective, a different lens.

‍

02:10 - 02:21

Josh Crisp

Well, let's talk about that because, I love hearing the stories and the history of our industry brought to modern day. So your entry point into senior living, what were you doing?

‍

02:21 - 02:58

Kathryn Burton Gray

That's a good story. So I started in banking. I went to the University of Arizona, so go Wildcats. So this is really gratuitous to me that we're doing this in Arizona, even though it's ASU territory, but that's another story. So when I started, you never really start to your point, saying, “What am I going to do when I come into this industry?” “Am I going to go into commercial real estate? Am I going to finance the seniors housing?” Nobody even knew what that was at the time. So originally I came in, I triple majored in journalism, creative writing, and poly sci. I thought I was going to go to...

‍

02:58 - 03:01

Lucas McCurdy

Overachiever and not surprised.

‍

03:01 - 11:52

Kathryn Burton Gray

I also taught for the Princeton Review. I taught the MCAT, the LSAT, the GRI, the S.A.T.. So I didn't know if I was going to be a teacher like most of my family. And I decided, “You know what?” “Let me take some more finance classes.” So I took all these advanced accounting and finance, and I decided to go into banking. And so I started in banking. And from there, I started on the credit side, which I think any business development officer should always start in banking and understand the numbers, because that's what it is. But it's also about relationships. Then I had an opportunity to go with a company called Finova Capital. I don't know if you guys remember, that company is actually here in Phoenix, and it was Greyhound Financial.

‍

And when I went there, they were starting a healthcare group, but they were thinking they were going to do healthcare in terms of receivable lines. And I said, “You know, why don't we start doing commercial real estate?" Because you're a finance company. You have that capacity.” So I started doing construction loans development. Do you know why?

‍

Because they always look good. Because they're all pro forma written. And so I knew I would get immediate success. Sorry, I'm gaming the system, but I absolutely loved the idea of building this business. Because if you remember, in the 90s, when we first started out, there was very few developments, and then it became like an overload of development, where every developer who developed a shopping center decided, oh, these assisted living facilities sound really interesting.

‍

So let's do that. And we got a flood of product really fast, but there was never really a definition of what the product was. Is it kind of a hotel model? Is it, hybrid of skilled higher acuity? And so we went through that sort of peaks and valleys of figuring out there was overbuild. And then what was happening was the stronger operators were the ones that were rising to the level. And then bigger is not better in this industry. And we've seen companies like Sunrise, and I'm using them as an example. They started out really as a kind of a management company. They bought Carrington and then they expanded and they said, “You know what, we need to own our real estate.” And so they were one of the very first to say, “We need to own, we shouldn't just be a management company because Wall Street is not giving us the valuations that we think we could have.”

‍

And from there, other companies took root. The companies who were skilled were saying, how can I capture the residents earlier and not when the hospital's discharging them? And so that built more higher acuity assisted living, the Belmonts or Merrill Gardens. And then we went back to hospitality. It was like, “Well, let's add independent living. Let's add oh, let's add memory care.” Because that's an interesting product. We can get more money for memory care. And so there were a lot of operators just adding that into their mix because you could charge twice as much for that product. But they didn't really have any concept of how to manage this.

‍

What am I managing and to what type of outcome? And that brought in operators like Silverado. Loren Shook, who is one of the best in the industry. He came in and he said, no, this is the way we're going to do it. We're going to measure this. We have different divisions of memory care. We're going to have sort of early on stack. We're going to work with those that are progressing the disease. We brought in schools like USC that have a gerontology group. We brought in other people from outside the industry, maybe more hospital-like settings. Anyway, this is where we're kind of like I said, we've been evolving throughout this whole process now, which I think is really interesting, as we have active adult and active adult has found its way with the multifamily sector.

‍

So there's kind of that hybrid of seniors, multifamily, and I welcome that. I'll tell you why. And I know that we're very insular in our industry. But the reason I welcome it is because I think we need a new lens in how we build products. And I'm speaking as a baby boomer, I don't want to age myself. What we're developing now is something that my generation wants, and I'm on the end. Candidly, I'm on the end of the baby boomers spectrum. I mean where I'm really Gen X and I think we're still building for like, the Silent Generation, it seems like I really want our industry to step back and look at other consumer companies, whether it's Amazon, whether it's Disney, whether it's Google, something that understands what people want.

‍

We don't ask what people want. We just assume that it's been done this way before. We're going to develop it. The same way the spoke and hub is what we want? Because I think my generation, who are wanting to go in eventually, they're going to have to make decisions. And I think the decisions they're going to have to make are going to be predicated on, do I really want to keep up my house? Do I want to keep up my car? You know, the landscaping, all everything that's associated with sort of the maintenance as you get older? I live on two levels. Do I really want one level? But then they're frightened because I don't want to go to a nursing home because everything becomes a nursing home and you don't really want that.

‍

And so what I love about active adult is it's been sort of a transition. And a couple companies I think I shared with you guys, I'm the chairman of UCLA's Senior Housing Council. So I really love inviting outsiders in to tell us the story. And one that we did have was the developer of Jimmy Buffett's Margaritaville. And I think that's a really good brand in terms of I think that's where we're headed, lifestyle branding, where you are with your same community.

‍

You're bringing them in. I'm not saying everybody wants to get drunk at 3:00 in the afternoon, but a lot of them may want to. So they have that option. But I think that's where my generation is going to look at experiences. I think we see that all over the country. Right. You see that, I'm going to use like, Van Gogh, you go to Las Vegas and you have the Van Gogh. I think that's what we're going to get to. It's going to be an experience. It's going to be a theme. Now, we also had a presentation by an operator that does sort of gay and lesbian lifestyle. And, I thought that was really interesting. I think it's a limited market. You have to be in certain states that would be acceptable.

‍

But, I like the idea of serving a community. The other one is, I think there was one for sort of Asian communities, Indian, that they hire a chef that's familiar with the type of food they like. I think people are comfortable in their community. And that's the one thing that I think is the driving choice. Besides maybe downsizing. We want to stay involved. And I think retirement is really hard. And I think that's why I'm still in this industry. It's because I don't want to retire. I enjoy this so much. I get to see the younger generations coming up and I get to see your point, I was the third woman, probably at the first NIC.

‍

And there's a funny story about that, you know, being one of the two other women, one of three women. We've come a long way. So, you know, what could I say? Anyway? I've talked too much.

‍

11:48 - 11:52

Josh Crisp

Well, no, you haven't. So that's a lot to follow up on.

‍

11:52 - 11:54

Lucas McCurdy

Incredible history lesson. There.

‍

11:54 - 12:43

Josh Crisp

It really is. And you know what's exciting to me about it is because you have had the experience and the success and you've seen the evolution, the progression of our industry. You have such a unique perspective and also represent your generation, to speak directly to, “Hey, I am a voice of this generation that we're all trying to figure out what is the product, what is the service, how are we going to fund it? How are we going to develop it? How do we position it?” So you have part in these initiatives. But I would like to hear how the industry has changed, when you look at your first NIC event to where we were on the heels of another event coming up, where is our industry compared to where it used to be? And does that give you energy? Does it excite you about what you see happening?

‍

12:43 - 13:10

Kathryn Burton Gray

It does. I think we could learn a lot. Well, since we're really a real estate operating business, right? First and foremost, it's an operating business. The operating business drives the real estate value to your question. But what's going to pull the people? These are their homes. So what is it that we need to do that's going to attract?

‍

And so to your point I'm interested in the developers also. I think they have something to say. And unfortunately sometimes they get snubbed by bankers like, oh, you're a developer. We only do business with operators. I think there's been a lot more collaboration that I'm saying where there is building, it's slow because banks are they have their hands full with a lot of asset management, but it's it's coming along where there's a collaboration, where there's an investment by the developer who doesn't just want to do one development, they want to progress the industry to say, how can we make this easier for the consumer?

‍

So as an example, some of the changes I have seen, you have open architecture. So you come in, it's like a hotel, right? You have to walk in and you're not walking into a lobby. You're walking into this community table where people can sit and work on their computers. They're not in, wheelchair or just there's conversation. You have a breakfast bar where you can actually serve yourself, or sometimes there's a collaboration with a restaurant that will come in and actually operate, which I'm a big fan of, by the way.

‍

Operators, you cannot do everything. I find experts in the industry, find people that are best in class and bring them in and create that. That resonates with people. What do they want? And we don't ask our residents what they want. One of the things I did do, I think it was on a NIC panel a long time ago, is when we had the developer, we had the operator, we got the banker, and then we had about 4 or 5 residents, and we had the children of the residents. So there were, say, six people as far as residents and children. And it's interesting what the residents wanted were a little different than what their children thought they needed. And it really was eye opening for the operator. It was eye opening for the developers. So to your point, I think that conversation still has to happen. I think we need that.

‍

Those are the things that I'm seeing that are different. We're seeing operators who have been in here a long time. I want a new vision for our industry, you know? Sure. I want your generation to say they have to start thinking about it now that that's the change I'm hoping will happen. Because to your point, I don't want to walk through a brand new building, and it looks like a building that I walked through in 1997.

‍

15:51 - 16:18

Lucas McCurdy

A lot of them look that way and there's a major opportunity there. So I have a question about affordability. This is something that has been kicked around for a long, long time. And I'm not talking about, you know, Section 8 housing. You know what I'm talking about. We're talking about attainable, something that people can afford many of our parents, are not going to be able to, you know, afford these rates every single month. Is technology the answer there? How are operators going to build that product that's in the more affordable category?

‍

16:26 - 18:21

Kathryn Burton Gray

Well, I think technology will have a place. Absolutely. The smart rooms, the smart buildings. But to your point, we haven't solved that yet. Now we try to solve it with bond financing. We try to solve it with different variations where you're getting government funding, you're getting state funding, maybe some municipal funding. There have been some operators who have tried to do one from Chicago, and they thought, “Okay, here's what we're going to do.” We want the building really inexpensively. They decided to do the food service, to try vending machines or the kind of warming your. Yeah. How exciting does that sound? Airplane food.

‍

The challenges are that the cost structure is so high. To your point, that is something that I am all over and I keep ringing that bell. I don't have the answer, but I think that's a conversation when you interview more people, you need to ask them what their thoughts are. I think we really need a think tank to say, “How can we do this?” Because to your point, we're building for the 1 to 2% of the industry and our occupancies, and you'll get the data. I think they're kind of starting to dip a little bit. And it's to your point at what point is the decision going to be based on, you know, maybe I, I have champagne taste, but a beer pocketbook.

‍

That means I'm going to have some compromise. Let me go into an older building. I may not have that many amenities. I think that's an important discussion, because maybe what will happen is they'll stay in the homes longer or they will live with their adult children. And I think that becomes a whole host of issues in terms of the caretaker and how they age in place. I don't have an answer, Lucas, but it's something we need to keep asking.

‍

18:21 - 19:24

Josh Crisp

Well, I'd like to know your opinion on this. So, to set this up for you, you know, we're here at ASHA, we've already heard the largest attendance in history, which that in and of itself is exciting and I think speaks to the excitement of our industry, the growth of our industry. We've talked to our great partner NIC MAP. And we look at the 2024 closing date, what the indicators are for 2025 and it generates excitement. Just hearing about that growth in our industry. And then now we just so happen to be at the start of a brand new administration. And they you know, there's talking points there with the environment that we're going into for the next four years and how that may impact the economy. Capital markets. What is your opinion on what the opportunities that our industry is going to be able to embrace over the next four years? Is this sounding like the perfect, good storm of opportunity, or should we just be cautious?

‍

19:24 - 24:20

Kathryn Burton Gray

What I love about the new administration is they're very business focused. So I'm big about business no matter what it is. I'm also big on how we are going to finance. And it goes back to his question about looking at this question about affordability. So in some states you have a Medicaid waiver state. So they will get supplemented up their cost of daily living through Medicaid waivers. I think what's going to happen is the government is going to take a close look at all the spending they've made, and I think they're going to have to make some serious decisions on what's going to be important. So I'm optimistic because it's always refreshing when somebody new comes in with a different perspective. I'm also worried about certain states.

‍

I come from California. I'm worried about their ability to fund programs, which would all affect our industry. I'm also worried about where the money goes that we're paying in taxes. Is it being siphoned into other areas that are not really helping our senior community? I don't have the answer for that. But as you well know, and I'm excited, I feel the excitement in the air. I feel the excitement here. I like the opportunity that we're making less government and more accountability. I think we need to have people that pivot because of you. You talked about AI. I think that's going to play a big part, especially with Elon, who is, you know, I'm a big fan just because I think he's brilliant. Hopefully we're not going to spend it going to Mars. But what do we do here on our planet? But I think it's somebody that can speak to that technology. You know, coming from California, I'm in the entertainment world. And part of the strike last year that you heard about had to do more with AI and plagiarizing. You know, it's amazing. We call it deep fake when you get you see, actors are saying something, but they're really not.

‍

They were very worried about what was going to happen with the entertainment industry. Are they going to take my likeness and put it in a movie? And then they don't have to hire actors. People can say what they want, but that's what the strike was about. So the question is, while I'm excited about AI and how that's going to change, and having somebody within that administration that understands that sector and knows how to sort of harness that a little bit, I'm really excited about it.

But even more so, we talked about this. I just heard this morning that there's a new app that's coming out from China that they were very worried about, that it's going to render out ChatGPT basically, it's going to unfortunately be over past that. And that's an American company. I'm all about, having two Green Beret signs that I shared with you. I want everything to stay in America. But I think if we don't make things less expensive, if we cut our costs, we need to train people how their jobs are going to change. And let's talk about banking as an example. I think that eventually underwriters are going to be maybe a thing of the past. Maybe you bring me your transaction and I put it into an AI format, and it spreads everything and tells me whether I should make the loan or not.

‍

I think those are the changes that are coming. So I think people need to be aware of what's the buggy whip in their current jobs and what they can do to adapt to it, because I think AI is going to be a big, big deal. And, you know, I look at our cell phones, we talked about this. This cell phone is more powerful than the first computer. Triple the power of the first. You know what I'm going to say, right? The first computer that went to the moon. We have more capability in this. And I finally, you're going to laugh, but I finally got a new I think my iPhone was like from 2019. And at some point it was so slow. I was like, I can't even play solitaire on it anymore. So I went in and bought a new one. I am amazed at the capability of what is available on this. In fact, some of the facilities that people are going into, they give them iPads, they give them iPhones, and all of that is all hooked up. I think we're going to get to a point where we're going to be able to tell, like, I wear the aura ring, so it tells me in my sleep, but I think we're going to see more of these within our phones are going to tell our heart rate.

‍

It's going to tell us we need to move more. It's going to be, you know, your blood sugar is high. So all of this I'm really excited about and I, I don't know how it's going to adapt to buildings, but all I can think of, it's going to get smarter.

‍

24:20 - 24:56

Josh Crisp

Well, you know, to have your success and your history, your time in the industry and for me to hear. And since you're excited, that gets me excited so selfishly, here's a question for you to answer selfishly. At this point in your career, in your life and the success, you've gained a lot of leverage to be able to pretty much choose what you want to do and spend your time, right. You're choosing to spend it in the industry, and you have a lot of opportunities. So what is most exciting and what are you planning to spend the majority of the balance of your career doing now with all of that opportunity that you have?

‍

24:56 - 25:31

Kathryn Burton Gray

Well, that's a really good question. Thank you for asking me that. Josh. I think what I want to do is to make people healthier and happier. And doing that is my life mission to be honest with you. And you say, well, what does that have to do with the seniors? I'm older, and when I look at my grandmother, what she looked like at my age, I'm looking pretty good. Without having a facelift, I have not had a facelift. So anyway, I and I live in Southern California.

‍

25:31 - 25:34

Josh Crisp

That's bonus content right there. That's great.

‍

25:34 - 27:41

Kathryn Burton Gray

So yeah, I think it's important that we don't all just look good. I want people to feel good. And one of the things that I want, I want to happen and I want to be part of is helping operators achieve that through their programing, through longevity, through, you know, I take a whole bunch of vitamins a day. I wear my Apple Watch. I can tell how many steps I've taken. That's what I really want to get back. You know, all these ladies not at our conference, but in Southern California are all on Ozempic. They're all trying to lose a lot of weight. To be really skinny. It's more important that you're healthy, not just skinny.

‍

I want people to be healthy. I want them to make healthier decisions. Because if you look at where most of our healthcare is spent on, it’s adverse selection, the reason why your health insurance is so expensive is because people smoke. Still. Yes, they still smoke. They are not exercising. They are under tremendous amounts of stress. I think that we all need to reflect that. I think in this industry, when you look at some of the caretakers, they're out of shape. They're in a high stress capacity. They have to be at their best. I want to make them healthy because healthy is happier. So that is one of my mantras. Wow. And like I said, having two Green Beret sons who carry 75 pounds, you know, in Iraq and Afghanistan and all the other places they are in, they have to be in shape.

‍

Their life depends upon it. Our life depends upon it, too, and it makes us happier and healthier. And I think if we could have a healthier U.S. population, the cost of health is going to start to decrease and people are going to live happier longer. It's not that you don't want them just to, you know, put them in a residence and say, you know, good luck, have a good life. You want them to really be engaged. You want them to have a sense of purpose. And I think we need to work harder at doing that.

‍

27:41 - 28:21

Josh Crisp

What a worthy mission. And it seems like, you know, that going back to, you know, talking about the opportunity we have over the next four years, it seems like there is going to be a spotlight on getting America healthier, getting our industry healthier, and getting humans healthier. And also, I just want to point out, you know, with all your success, congratulations on the success of two Green Berets. What an accomplishment. Two heroes in the same household. So a heck of a mom. On top of everything else that you've done in your career. So thank you to those men for their service. Continued service.

‍

28:21 - 28:48

Kathryn Burton Gray

Thank you. And everybody, every time you see a service, please thank them for their service or service. Woman. Thank them, because that's a huge commitment they're making to our country. And I'm a huge patriot. So I'm very proud to be here and proud to be part of your success. You guys are really elevating this world. And thank you for what you both do. And Sarah behind the scenes. So thank you all. This is awesome.

‍

28:48 - 28:57

Lucas McCurdy

Well, that means a lot to us coming from you. And I know our listeners are going to want to engage, and get in contact with you and continue this conversation. Are you active on LinkedIn? 

‍

28:57

Kathryn Burton Gray

I am.

‍

28:57- 29:09

Lucas McCurdy

Okay, great. Well, that's a perfect spot to connect. Also, btgvoice.com has all of our content and you can connect with us on LinkedIn. There are show notes. We're going to list contact information there. Thank you for your time today.

‍

29:09 - 29:12

Kathryn Burton Gray

Oh you guys are awesome. Thank you.

‍

29:12 - 29:15

Lucas McCurdy

And thank you to all of our listeners for another great episode of Bridge the Gap.

‍

Outro

Thanks for listening to Bridge the Gap podcast with Josh and Lucas. Connect with the BTG network team and use your voice to influence the industry by connecting with us at btgvoice.com.

‍