Managing IHC’s Facilities with Volante

Wally Smith:
So with the DSTs for a lot of our viewers, they don’t know how that works. You have a master lease arrangement, and the master lease ends up being the manager of the property. And you guys have a lot of strength in that, in that management of this sector. So do you keep the management when you buy new property generally or is it accretive? You bring it in and fold it into your master group?

Patrick Lam:
Sure. And there’s exceptions to, I think, every rule. But most of the time when we look at a senior housing facility or community, the first thing we look at is number one, how their occupancy is and how are they performing? And if things are going well and they are 95 to 100% occupied, they’re performing well with the rents, the last thing we want to do as a new owner is to come in and disrupt things that are going very well, which is why we created Volante. What Volante does as our operator is they will come in, be the new operator, but they will hire every single staff member from that community. And so what that does is builds consistency for the baby boomers that are living there, but more importantly, it helps us become more efficient in terms of oversight and just cost and efficiencies throughout the communities.

Wally Smith:
When did you create Volante?

Patrick Lam:
We started that about a year ago, and now it’s fully running on full speed. It’s occupying about 15 communities at seven different states.

Wally Smith:
Wow. That’s excellent.