‘talk Of The Town’: How Charter Senior Living, Frontier Grow In Smaller Markets

With smaller labor pools and limited base of potential customers, secondary and tertiary markets are not for the faint of heart. But that doesn’t mean operators are overlooking them.

Operators including Frontier Senior Living and Charter Senior Living are targeting smaller, more fragmented markets for growth with the belief that they can succeed with a strong brand and higher-quality services.

Smaller markets are opportunities given that they often carry more available land for development and fewer competitors, according to Greg Roderick, president and CEO of Dallas, Texas-based Frontier Senior Living. The company operates in markets such as Green Valley, Arizona, located south of Tucson; and Garland, Texas, near the Dallas metropolitan area.

“The competition there may be a bit older, so if you bring a new product in you’re the talk of the town and maybe a little bit more of a superior asset,” Roderick said.

Charter Senior Living President and COO Jayne Sallerson said the company has found success in markets such as Paducah, Tennessee, where the company was able to grow a community to 95% occupancy within its first 14 months after opening.

Sallerson said that expenses, such as wages, are lower in such markets, meaning operators can achieve a return on investment and revenue per occupied room (RevPOR) that is just as strong, or even stronger, than in primary markets.

Expanding into these smaller markets isn’t without its fair share of challenges, however. Although there are typically fewer competitors to contend with, that stems from the fact that smaller markets can only realistically support so many communities. And if operators aren’t careful and detail-oriented, they could find smaller markets aren’t always worth the trouble.

Opportunities in smaller markets

Supporting operators’ growth plans in secondary and tertiary markets is the fact that such locales are not as crowded as the 31 primary markets tracked by the National Investment Center for Seniors Housing and Care (NIC). As of the first quarter of 2025, construction in secondary markets fell to the lowest level NIC MAP has recorded since it started tracking the data in 2007.

Between 2018 and 2024, the number of annual property transactions increased 33% in secondary markets compared to 21% in primary markets, according to NIC MAP data. The number of transactions over the past few years only widens that gap further. Between 2022 and 2024, annual property transactions increased 68% in secondary markets compared to 45% in primary markets, NIC MAP data shows.

Naperville, Illinois-based Charter Senior Living communities in smaller markets have a wider reach than those in the more densely packed primary markets, and sales teams can reach outside of their traditional bubbles to connect with prospects, according to Sallerson. In most primary markets, Charter communities have an effective radius of around five miles for attracting prospects, Sallerson said. Secondary markets, on the other hand, can extend up to 15 miles.

“These secondary markets are often surrounded by smaller towns that lack access to senior housing. Therefore, it’s crucial not to limit your sales and marketing efforts to the traditional five-mile radius,” Sallerson said.

Roderick added land is often cheaper and easier to build on in smaller markets, helping to make projects pencil out at a time when doing so is tough. Smaller markets also usually have older buildings with fewer modern amenities and services – another opportunity for operators like Frontier.

“We can build a superior product in an underserved market with strong rental rates, a great employee base and it’s easy to market,” Roderick said.

That philosophy is evident in the fact that the company’s Garland community is nearing 90% occupancy after around a year open.

The community is now in the process of adding 110 active adult cottages for an expansion, which Roderick said are leasing quickly this year. Another community in Spring, Texas, reached 100% occupancy within 11 months of opening, he said.

Smaller markets that can support new senior living communities aren’t always easy to find. Charter looks for markets near an existing footprint of communities to share support. Markets additionally need “strong financial demographics and a current and growing demand for senior care,” she said.

Due to lower amounts of competition in these kinds of markets, Sallerson added it allows Charter to “drive higher rates post-opening and position ourselves as the top community in the market.”

Waltham, Massachusetts-based Benchmark Senior Living doesn’t have many locations in secondary markets, but CFO and Executive Vice President Jerry Liang added achieving a rate sufficient to cover expenses at an appropriate margin is one of the key challenges for these markets.

“Often in these markets you need to target a larger geographic catchment area, which sometimes can be effective if penetration rates are sufficiently low,” Liang said.

Liang noted Benchmark spends additional resources educating both prospective residents and employees about what the operator has to offer across its New England to mid-Atlantic spread of communities.

Looking ahead, Roderick said Frontier plans to continue growing in secondary markets, aiming for being within 20 miles of nearby metros. At the moment, he said he is evaluating two locations around Nashville, Tennessee, and several other locations in Texas. Maintaining that distance is key to overcoming staffing issues and keeps transportation within 30 minutes or less.

While Benchmark has no plans to develop in these markets for the time being due to construction costs, Liang said the company would look to acquire “when the cost of entry is aligned with performance.”

Charter has goals to identify and evaluate markets similar to its Paducah location.

“With the support of our existing development partners, we aim to expand our footprint and capitalize on the potential these markets offer,” Sallerson said.

Staffing still the limiter of growth

Staffing is a top challenge that senior living operators face, particularly for leadership positions. That is already a challenge in primary markets, let alone smaller ones, where there is a smaller labor pool and fewer competitors from which to hire talent.

In order to overcome staffing challenges, Frontier has incorporated a variety of travel benefits and reimbursements for gas, carpooling and public transportation to accommodate staffers’ longer commutes to work. Implementing measures like those in Frontier’s Arizona markets gave the operator another tool help attract employees rather than increasing wages, according to Roderick.

“We don’t have to do it anymore, but at least we know how to do it in the event that gas prices go very high again one day,” he said. “It’s a thoughtful way to make sure that the employees that come to work aren’t stressing over gas prices when those do surge and it keeps them coming.”

Both Roderick and Sallerson stressed the importance of grassroots marketing efforts by connecting with local businesses and the communities these properties are in to generate more steady leads.

A community’s reputation also becomes particularly important in smaller markets due to the lower level of competition.

“These smaller markets are particularly sensitive to any adverse events or poor customer experiences within the community. Negative reputations tend to spread quickly and are more challenging to recover from compared to larger, more urban markets,” Sallerson said.

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