In this Voices interview, Senior Housing News sits down with David Knight, President of GSI, to talk about the evolution of the nonprofit continuing care retirement community. He discusses the development cycle, risk and opportunities for nonprofits, and he explains the importance of having a full development team on your side. He also shares insight into some of the key challenges facing providers today, as well as how GSI is helping communities overcome them.

Editor’s note: This interview has been edited for length and clarity.
GSI is a developer, owner and operator of nonprofit senior living. Our mission, the reason we exist, is to support the growth of your mission. We understand the history, nuance, governance issues and opportunities for nonprofit providers. Give us a call to develop a forward-thinking plan.
The Voices Series is a sponsored content program featuring leading executives discussing trends, topics and more shaping their industry in a question-and-answer format. For more information on Voices, please contact sales@agingmedia.com.

Published: October 2, 2023

Q: Senior Housing News: What career experiences do you most draw from in your role today?

David Knight: Over the course of 27 years, my career has progressed from the grassroots, caring for residents as an administrator, to diving deep into numerous development budgets, master plans and projections. I’ve tackled issues in troubled assets, navigated mergers, acquisitions, and dispositions, and steered diverse boards and leadership teams from ideas to fruition.

I’ve had the privilege of affiliating with two significant multisite nonprofit organizations, including 20 years at Covenant and 7 ½ years at Transforming Age/GSI. These experiences have given me a panoramic view of the industry from observing financial ebbs and flows, shifting market forces and various leadership responses to such evolutions.

Collaboration has been key. My achievements aren’t solely my own. At GSI, a stellar team exists, boasting industry frontrunners in nonprofit CCRCs, for-profit active adult and affordable senior housing. United by a shared ethos of servant leadership, I’m honored to be a team member.

Q: What makes GSI different from other consulting groups in the senior living industry?

David Knight: We belong to Transforming Age, an expanding nonprofit developer-owner-operator. Our engagements stem from a heart of service and genuine collaboration. Our role as trusted advisors frequently extends past mere infrastructure development to encompass areas like operations, clinical affairs, IT, HR, finance and legal.

We serve under a forward-thinking CEO and a board driven by purpose. This fosters greater mission alignment with our clients and gives us the freedom to offer them more adaptability, from our resource allocation to compensation structures.

Q: What are some key best practices you employ in every new project that you wish you would have done back when you first started?

David Knight: Change management is key, and it is imperative to delve deeper into the distinct governance, decision-making dynamics and politics of each situation. Development endeavors span long durations — often a decade — and they range from strategic planning, master planning and project design to financing, construction and occupancy. These represent some of the most consequential decisions a client can undertake.

Achieving unanimous agreement is rare, and a single shift in board composition can profoundly influence the decision-making trajectory of a project. This journey demands continuous education and consensus building, engaging a wide array of stakeholders — from residents and leadership to the board. This engagement has always been rewarding, and gaining such experience and insight has been both an honor and a privilege.

When I was younger, I put more emphasis on the product and financial outcomes, and while they’re still vital, I am more focused on education, consensus building and adept change management today.

Q: What do most people overlook when it comes to big consulting, acquisition and development projects like the one you just wrapped up?

One of the most overlooked components of big consulting, acquisition and development projects are the intricate nuances of the full development process, and the sophistication of the team required. It’s alarmingly common for boards to dive headlong into projects without a meticulously crafted plan that covers vital areas like operations, programs, financials and market assessment.

A classic pitfall in this journey is the premature hiring of an architect. Fueled by excitement and ambition, boards may rush through design and entitlement phases, only to realize later that they lack the financial foundation to achieve a financing event, or worse, haven’t accurately gauged or developed their target market.

Equally concerning is the scenario where a project, driven primarily by mission, such as launching a state-of-the-art health care facility, exhausts the balance sheet. When the generated return falls short of revitalizing this financial bedrock, other parts of the campus can languish, becoming obsolete as they no longer meet market demands. This drives home the principle of “no margin, no mission.”

Moreover, the importance of a well-defined upside, downside and exit strategy cannot be overstressed. Every venture must have a clear vision of potential outcomes and the means to adapt if needed.

It’s crucial to develop a multiphase master plan that’s firmly anchored in financial and market realities. Take, for instance, some of our recent developments such as Parkshore Juanita Bay in Kirkland, WA, where the prior program and buildings had outlived their useful life in an ascending market. We went through a thorough planning process and are now over 80% pre-sold and about to break ground on a brand-new Independent Living community. Another is phase 1 of the Bethany repositioning in Ripon, CA. That process took 7 years and we are now under construction on an 82-unit Residential Care Facility for the Elderly (RCFE). The new addition increases the value of the campus continuum by expanding the level of care offerings with an age-in-place option. And we are nearing the end of construction on phase 1 of the eliseo campus in Tacoma, WA.

While development and expansion projects promise growth and progress, a meticulous, grounded and well-thought-out approach is paramount to ensure success and sustainability.

Q: How has your partnership with Transforming Age positively impacted the work you do?

Our partnership with Transforming Age has helped us maintain a keen focus on operations, directly influencing the lives of residents and continuously expanding the missions we hold dear.
It has also developed our collective expertise since we’re connected to a vast network of subject matter experts with insights and knowledge that enhance both the breadth and depth of our engagements.

Transforming Age’s alignment with our ethos ensures that we can tailor our assistance based on the unique challenges and requirements each organization faces, and it also embodies what we often refer to as “patient capital.” Their approach isn’t rooted in seeking immediate returns. Instead, they are purpose- and mission-driven with a long-term vision. This growth mindset underlines every decision, ensuring sustainability and impactful results.

Today, our team is better positioned to offer a range of services, from pro bono assistance and fee-for-service arrangements to full-fledged partnerships and balance sheet support through affiliations. Not only has it broadened our horizons, but it has also added purpose and versatility to our work, making every engagement more meaningful.

Q: What do you see as the biggest driver of innovation in the industry today?

The biggest driver of senior living innovation can be understood through the interplay of several crucial factors.

First and foremost are demographics. As the senior population grows in number and becomes more diverse in terms of background, needs and financial capacities, their expectations of senior living facilities are also undergoing a transformation. Today’s seniors are more informed consumers with distinct needs and demands, seeking personalized experiences.
Adding to the complexity is the challenge posed by staffing. The growth of the population has been on a decline since 1992, lagging behind job growth. As a result, there’s an impending staffing crisis, especially when you consider that our societal burden of care is set to skyrocket. The staff-to-senior ratio is becoming increasingly disproportionate, which can affect the quality of care.

However, amidst these challenges lies the solution that drives innovation — the efficient delivery of care that aligns with the escalating consumer demands. The intersection of scale and technology has paved the way for on-demand care solutions. As technology continues to evolve, senior living facilities are leveraging it to deliver timely and efficient care, ensuring that seniors have access to the services they need, precisely when they need them.

Q: In a couple of words, finish this sentence: “In 2023, the senior living industry is being defined by…”

…staffing, construction cost, cost of capital and consolidation — and for many nonprofits, that means affinity group to affiliation.

Editor’s note: This interview has been edited for length and clarity.
GSI is a developer, owner and operator of nonprofit senior living. Our mission, the reason we exist, is to support the growth of your mission. We understand the history, nuance, governance issues and opportunities for nonprofit providers. Give us a call to develop a forward-thinking plan.

The Voices Series is a sponsored content program featuring leading executives discussing trends, topics and more shaping their industry in a question-and-answer format. For more information on Voices, please contact sales@agingmedia.com.