Senior Living Newcomer Bullish on Competitive Dallas Market

Despite bubbling concerns of overbuilding and increasing competition, a newcomer to the senior housing industry still sees a vast opportunity in the Dallas market for its first foray into the space.

A robust local economy, underdeveloped pockets of land and a need-driven demand fueled by aging demographics are all signaling the green light for Dallas-based developer AG Ventures to get into the senior housing business.

The signal shines brightly for the commercial real estate developer, so much that AG Ventures has already committed approximately $25 million toward the development of its first project, a 120,000-square-foot senior living community in the suburban Dallas market of Carrollton, Texas.

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Established this year by Amish Gupta, who previously worked as an investment professional for The Carlyle Group (NASDAQ: CG), a private equity firm with $199 billion of assets under management as of March 31, 2014, AG Ventures doesn’t have plans to become an overnight giant.

“We’re not trying to be Goliath tomorrow,” AG Ventures Founder Amish Gupta told SHN. “We’re looking at this from a long-term perspective.”

Project plans for the Carrollton development call for a 135-unit community that will consist of two separate wings on 4.5 acres, the first of which will be three stories and include 100 units with a mix of assisted living and a number of independent living residences. A 35-unit memory care wing will comprise the second wing of the development.

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The community, which has an anticipated construction start for later this year, will be located on the corner of Texas State Highway 121 and Creek Valley Boulevard in Carrollton. The location is one of the few pockets of underdeveloped land AG Ventures saw as an opportunity to join the ranks of the highly competitive Dallas-area senior living market.

“Although there is an increased overall halo amount of development, at the same time there are still pockets of areas that are underdeveloped and have not had development over the last 10 to 15 years,” Gupta said.

In the aftermath of the Great Recession, Texas has fared among the best for economic recovery. In April, the Lone Star State was home to four of the top-10 metros ranked for best performance in terms of having recovered to pre-recession economic levels, according to the Brookings Metropolitan Policy Program.

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More recently, the Dallas-Fort Worth metro has made steady progress in its post-recession recovery, according to Zillow’s second quarter Real Estate Market Reports, which indicates the area is only 0.5 years from home values returning to their pre-recession peak.

“The overall economic impact has led to a lot of the development thus far, but the magic is finding when the threshold will be and figuring out when is it too much?” Gupta said.

Pairing with AG Ventures on the development is a regional operator who the company has yet to make public, as it is still hashing out finer details.

“A regional operator is very advantageous to us,” Gupta said. “They have a strong knowledge and provide us with the attention we need since we’re not a national developer at this point.”

The company has also paired with architecture firm Rees Associates, Inc., which has a Dallas office, and is currently in the process of selecting a general contractor, which AG Ventures plans to announce in the coming months.

Looking ahead, AG Ventures plans to build its foundation by doing anywhere from two to five projects per year as it looks to develop and strengthen its track record in the years to come, Gupta said. The company is reluctant to disclose how much it plans to invest in the sector for future development.

“We don’t want to handcuff ourselves with goals like that,” Gupta said. “Our goal is to be more qualitative than quantitative.”

Written by Jason Oliva

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