Fresh off the acquisition of senior living management company Encore Senior Living, LCS is beefing up activity outside of its traditional continuing care retirement community sweet spot.
One of LCS’s top strategic objectives is to achieve diversification within the senior housing space, says executive vice president and chief development officer Joel Nelson, a strategy the company embarked on in 2010.
Currently around a third of the company’s portfolio consists of non-CCRC senior living communities LCS either manages, owns, or is involved with. The company has 118 properties under management, broken down into around 75 not-for-profit CCRCs as a third-party manager, around a dozen for-profit CCRCs as a third-party manager, and around 30 non-CCRCs.
“We’ve spent the last two years building an infrastructure—on top of what was already a fairly robust infrastructure—for owning and managing senior housing assets,” says Nelson. “As part of that growth, we’ve gotten to the point of scale, with 30-plus assets in our non-CCRC group, to have designated divisions for the two groups.”
Peter Muhlbach, Encore Senior Living’s principal, will lead the non-CCRC management division.
While LCS’s core business has always been and is expected to remain third-party management, Nelson says the company may add more focus to ownership.
“With Peter Muhlbach’s experience and ours combined on the non-CCRC product, we’re really taking what we did in the 1980s, when we started growing our portfolio where we had ownership interest in CCRCs, and now we’re doing that with the nonCCRCs,” he says.
Most of Encore Senior Living’s nine managed communities are either freestanding memory care, or a combination of assisted living and memory care, although there is one property that is predominantly independent and assisted living.
Encore has also been retained by an existing client to manage a freestanding memory care community that’s currently under construction once it’s completed.
LCS has an extensive 2014 pipeline in conjunction with multiple partners consisting of nearly 20 communities—including a CCRC—that are currently under construction or will break ground this year, totaling more than $750 million, according to Nelson.
“LCS remains very focused, disciplined, and bullish on the CCRC product,” he says. “However, we believe that the Encore acquisition along with our strategic plan pre-Encore positions us well for going down the path of having two operating divisions for both CCRCs and nonCCRCs.”
Written by Alyssa Gerace
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