The LaSalle Group isn’t exactly the new kid on the block—it’s been around for a while and was involved in various types of real estate transactions until 13 years ago, when it saw the tremendous—and growing—need for memory care.
Since then, it’s been in the business of establishing memory care communities under its Autumn Leaves brand. The group’s comprehensive approach encompasses all aspects of a new community, from real estate development to financing to construction and then finally to management of its memory care communities.
The LaSalle Group has rolled out a few new projects in recent weeks, so we caught up with Chief Financial Officer Brenda Brantley, who talked about The LaSalle Group’s current projects in the pipeline, the benefits of taking a start-to-finish role in developing new communities, and why it might not be a good idea for too many players to enter the memory care market.
Senior Housing News: The LaSalle Group is involved start-to-finish, it seems, in the process of establishing a new senior living community. How has that worked for you?
Brenda Brantley: We get a lot of efficiencies [from being involved in establishing communities from start to finish]; there’s a lot of collaboration by having us all here together. We have our own development team that’s responsible for finding sites and doing due diligence. By the time we close on the land, we’re ready to do construction.
We own the construction company, Lake Superior Contracting, and they build all the communities together. Constant Care/TLG Family management does the actual caregiving, and we have common ownership in that. We don’t do any third-party management. Our construction company can do other jobs, but our priority is Autumn Leaves.
All three companies offices are together here in headquarters in Irving, Tex. We do a lot of collaboration. When we’re looking at potential new sites, we have all the disciplines here around the table. We can all look to see if everything has been tackled and there’s no missing piece.
SHN: What are you working on right now? What’s in your development pipeline?
BB: Right now, we’re at a good size and a good steady pace to where we can add six to seven new Autumn Leaves communities a year, comfortably. There are five currently in construction, bringing us to a total of 25 communities.
Our sole focus is on memory care. All of our Autumn Leaves communities are designed to meet the needs of our residents. We’ve been building the same prototype for almost 13 years. We’re in a business where we feel we’ve built a prototype and a business that works and provides a quality of care.
SHN: You have or will have eight Autumn Leaves communities in the West Houston metro area; what’s your strategy behind that?
BB: We want multiple projects in one general area. We have a regional staffing model, and it makes sense to have multiple locations. It helps with brand awareness. The more you have in an area, you have people driving by who notice it and become familiar with it.
We try to keep each community residential in look and feel. We work really hard to make sure it feels like a home. The buildings are about 26,000 square feet and have, on average, 46 beds.
SHN: How is your model of care and services different from other players in the memory care space?
BB: It’s a family-based and owned company. Even though we’ve grown to over 700 employees, it’s about family caring for family. We’ve worked hard to keep that culture. We’re building our portfolio so we can help more and more families.
Some of our competitors, they’re building to get a big portfolio, to sell it, and then start over. For us, it’s our reputation. It’s our name behind the Autumn Leaves brand.
We do some very detailed assessments of not only the residents, but also stay in contact with the families as much as possible. We assess where they are from an acuity standpoint. We have a detailed life enrichment program that we can cater to each individual’s needs. As they progress through the disease and their needs increase, we can adjust to that.
We also work to reduce the amount of medication they’re on, which can improve their quality of life.
Everyone who comes to our communities has some sort of memory impairment. Spouses could come with different levels of impairment, and we have different room sizes to cater to a variety of different care needs; there are multiple couples located throughout our communities.
In the communities where our properties are located, we try to bring awareness to care providers that we offer day stays and respite stays, and allow them to get a break. And then they can see how well their family member would do in an Autumn Leaves community.
SHN: Have you seen any sort of trends in terms of the number of people using these temporary services?
BB: There’s been no trend or any one service particularly picking up. The only thing is, we want to make sure we can care for the number of people in the building. We’re caring for and feeding everyone in the building, so we need to make sure we don’t put so many people in there that the quality suffers.
On occupancy: We have been very pleased with how well our communities have done in the Houston market. We went into Houston three years ago, and we’re really amazed; we’ve been able to get eight projects going in that period of time. There’s a huge need; we were careful to look where the competition is.
The bottom line is, it is a business, so we need to look at the bottom line.
There’s a huge disconnect in supply and demand in this space; there are a lot of people who need our help. We also want quality of care—that’s our top priority.
SHN: What have been your experiences in finding development financing?
BB: We were able to get construction loans done in 2009 and 2010. Did we have to expand our [financing] relationships? Yes. But there are banks out there lending. It’s the strength of the borrower that gets the banks comfortable. If you have a strong balance sheet and you’re a profitable business, they’ll be more willing to lend to you.
SHN: What is your strategy for development?
BB: There is not a finite number of these to be built. There’s a huge disconnect in the number of people who need this care, and the care that’s out there. We look in the major metro areas where we see excess demand; we do a lot of homework before we start a project and invest 6-12 months in a location before we pull the trigger and think we can be successful here. Our number one priority is quality of care.
SHN: What’s your outlook on the senior housing/care industry, regarding where the greatest need is?
BB: On memory care, the Alzheimer’s Association keeps coming out with daunting statistics about how many people need care today and how many will need it. Memory car, for sure, is going to be in high demand.
We’re doing it right and doing it for quality, not for just the bottom line. That’s my biggest fear: that there will be too many competitors coming in who don’t know what they’re doing.
[There’s also an opening for] active adult; with baby boomers coming around, you’re going to see a bigger want for that, but it’s also more of a discretionary decision, whereas memory care is more of a need-based business.
Economics will come more into play with active adult communities; what markets are still suffering from the housing bust, or having financial hiccups? It’ll have a tougher time in that market.