The 2026 Retrofit: Why Your "Stabilized" Assets Are Actually Hiding Your Renovation Budget
If 2025 was the year of "Wait and See" regarding new construction, 2026 is shaping up to be the year of the Retrofit.
With interest rates still squeezing development yields, many Operations Executives and CFOs are pivoting their growth strategy. Instead of breaking ground on new dirt, they are doubling down on their existing portfolios. They are expanding wings, remodeling common areas and upgrading 15-year-old communities to compete with the shiny new entrants down the street.
Before you sign that General Contractor agreement or finalize your CapEx budget for the new year, there is a hidden layer of your building you need to address.
In September, I wrote about The Hidden Telecom Costs in New Senior Living Builds. The feedback from that post highlighted a specific anxiety in the market. Identifying costs in new builds is vital, but the real challenge lies in the communities you have owned for a decade or more.
The answer lies in identifying your "Ghost Infrastructure" and eliminating the "Loyalty Tax" you are unknowingly paying. If you are planning a renovation in 2026, these two factors are likely haunting your budget.
The "Ghost Infrastructure" Problem
When you look at a 15-year-old "stabilized" asset, you see a reliable revenue generator. When I look at it, I see potential technological cholesterol.
Over the last decade, the average senior living building has likely accumulated layers of telecom services that were never properly decommissioned.
The dedicated fax lines for a nursing station that moved three years ago.
The alarm circuits for a security system that was replaced in 2022.
The "Zombie" data circuits that are still billing hundreds a month because the cancellation ticket got lost in a staff turnover.
This is Ghost Infrastructure. It is invisible to your facilities team and often incomprehensible to your AP clerk.
The "Loyalty Tax" of Legacy Agreements
While Ghost Infrastructure is a major issue, the majority of the savings we find actually comes from active services that are trapped in bad legacy agreements.
We frequently see communities paying 2018 rates for internet and voice services simply because the contract auto-renewed. In a previous blog, I defined this as the "Loyalty Tax." You are essentially paying a premium for staying loyal to a vendor who is happy to keep billing you at obsolete price points rather than offering you current market rates.
This creates a massive opportunity. The gap between the 2018 rate you are paying and the 2026 market rate you should be paying is often significant enough to fund other areas of your renovation.
Why Capital Recovery is Your "Pre-Construction" Partner
This is where our Capital Recovery service shifts from just "finding savings" to becoming a part of your funding strategy.
Consider a typical scenario where an operator budgets for a major Wi-Fi overhaul during a wing renovation. They assume they must dip into cash reserves to pay for the cabling upgrades.
However, if they were to run a Capital Recovery audit on their "stabilized" telecom expenses first, the picture changes:
Eliminate the Loyalty Tax: We renegotiate those auto-renewed legacy contracts to bring them in line with current market pricing.
Identify the Ghosts: We locate the legacy circuits that are effectively dead but still billing.
Recover the Cash: We work to identify overcharges dating back years where carriers failed to disconnect services or apply correct rates.
The Result: The refund checks and monthly savings secured through this process don't just pad the bottom line. They can help offset the cost of the new cabling install.
The 2026 Mandate
In October, I warned you about the $10,000 Telecom Trap of POTS lines. In 2026, removing copper lines isn't just a strategic choice for clearing a path. It is an absolute necessity.
Carriers have already begun the process of actively disconnecting these copper services. They will soon be unavailable entirely. If you do not address this during your renovation, you are not just risking high costs. You are risking a total loss of service when the carrier inevitably discontinues the line.
You are about to spend millions making your communities look brand new. Don't let your operating budget remain stuck in 2018.
Your Next Step:
Before you finalize your 2026 Renovation Roadmap, let us perform a "Pre-Construction Audit" of your telecom expenses. We work on a contingency basis, meaning our fee comes strictly from the money we recover for you.
Let’s turn your legacy waste into your renovation budget.