Seniors Housing Business

ASHA 2018

Seniors Housing Business is the magazine that helps you navigate the evolution of the seniors housing industry.

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2018 ASHA 50 17 AS H A 50 2018 ments, start construction, and build out the project in phases. We build larger-scale communities, so it could be 10 years for a project to be completed. A long-term vision has always been how we view the business, and it has proven to be a great investment. Is building the project in phases one of the tough lessons Erickson learned through the bankruptcy process and the lean times caused by the Great Recession? Butler: Yes, but there were several lessons learned during that time period. We knew that we had to bring more discipline and rigor to the entire decision-making process. In applying those principles, we have been more deliberate about matching the pace of our con- struction to the pace of demand. We always want to make sure we have sufficient inventory to meet the needs of prospective residents, but we want to be sensi- ble with the timing of new buildings. What's in the works now? Butler: We opened a new project in May. Windsor Run is located in Matthews, North Carolina, near Charlotte. We also have five communities in various stages of zon- ing and entitlement. Our new project in Naples, Florida, will have a sales center open by the end of this year. We anticipate breaking ground on that development next year. A project outside of Richmond, Virginia, could start as early as next year. Projects in Maryland and northern Virginia should break ground in 2020. We also have land in New Jersey for a new commu- nity. In addition to new development, we continue to invest aggressively to enhance our existing communi- ties. We have allocated approximately $400 million over the next five years to ensure we continue to provide first-rate facilities and amenities for residents at our existing communities. Do you focus only on ground-up development? Butler: Yes, for the most part. Acquisitions tend not to work for us for several reasons, the first of which is scale. A typical CCRC might have 200 units, but the minimum size we build usually has 400 to 500 indepen- dent living units. We do have a 350-unit project in Palm Beach Gardens, Florida, but that's an exception and it fits that high-end market. It's hard for us to build on a small scale without a high price point, and that does not fit our brand or business model. Secondly, a small community is programmatically different. It's hard for us to implement and execute the Erickson Living service model on a small scale. Lastly, For years we've helped investors, lenders, operators and developers make informed investment decisions in the healthcare and seniors housing industries. How can we help you? Valuation | Consulting | Litigation | Feasibility | Tax | Transaction Support BIRMINGHAM | BOSTON | DENVER | LOS ANGELES | SARASOTA | 941.363.7500 WE KNOW YOUR MARKET Do You? H E A L T H T R U S T

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