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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AS H A 50 20 2018 ASHA 50 2018 additional services. Typically, we build approximately 100 healthcare units, with a mix of assisted living, memory care, rehab and skilled nursing beds. We try to have the healthcare building up and run- ning in two years. We have learned that if you build the healthcare component too soon, then you are likely overly dependent on admissions from outside of the community. But the timing is thoughtfully considered because the residents want to have confidence that continuing care service levels will be available if and when they need it. How would you characterize Erickson's market position? Butler: Erickson Living is among the top leaders in our industry. We are a large-scale developer focused on value for the price paid. We target the middle- to upper-middle segment of the market. That said, we do build some projects on the higher end, depending on specific market dynamics. In Naples, for example, we will have higher entry fees than other projects in our portfolio, but we will still seek to fulfill our value-for- price-paid commitment. Our standard fee-for-service contract is appealing to today's seniors. How do your contracts work? Butler: Erickson Living's financial model includes a 90 percent refundable entrance deposit and a monthly service fee. Pricing varies depending on a community's geographic region, as well as apartment size and style. How are sites selected? Butler: We look for home values that make sense relative to the cost of construction. Specifically, our entrance deposits are expected to align with the home values in the primary market area and the anticipated cost of construction. We are also looking for a high density of age- and income-qualified people. Even if a community is underwritten for 1,000 units, we plan and build it in phases. This approach enables us to have smaller communities that are profitable and still provide the Erickson Living service model. We are comfortable that if the market or economy changes, we can stop or slow the pace of development and still operate as the Erickson Living brand. That flexibility is an important dynamic for us. Q&A with Alan Butler What happens inside our communities matters the most. That is why we craft financing solutions and provide industry-leading business intelligence tools that help care providers optimize their business. WE INVEST IN RELATIONSHIPS.

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