Alliance Residential Launches $1 Billion Senior Living Pipeline

A new entrant in the high-end senior living development space plans to rapidly become a major player in some of the nation’s most competitive markets, thanks to the leadership of an industry veteran and the resources of a long-established multifamily housing company.

Alliance Residential Company — a national multifamily acquisitions, construction and management company with a $9 billion portfolio — could make a big splash as it enters senior housing: It expects to deliver $1 billion or more worth of projects in the next three years.

To lead this effort, Alliance has tapped Dale Boyles, formerly a vice president with Emeritus/Brookdale Senior Living, to be managing director of senior housing. Prior to Brookdale, he was a co-founder of Monarch Senior Living and a vice president of operations with Sunrise Senior Living. His expertise will help make the Alliance entry into senior housing a quick one, he tells SHN.

“They could have tried to convert a multifamily expert,” he notes.

Even before Boyles came on board three weeks ago, the Alliance team was at work identifying opportunities for senior housing development, with a focus on independent living, assisted living and memory care. Alliance is interested in developing properties “in some cases” that include all three types of services in a single site with a continuum of care, President and COO V. Jay Hiemenz stated in a press release.

Boyles now is evaluating these prospects and expects to move forward on the first deals in the next 60 to 90 days, aiming for “three good deals” within six months.

The initial plan is to develop and build senior living communities in major metropolitan areas and other high barrier-to-entry, competitive markets, Boyles says, with developments likely following the footprint that Alliance already has throughout the country. The Phoenix-based company is a buyer, builder and manager in 19 states and 29 metro markets in the Northwest, Southwest, South-Central, Southeast, Mid-Atlantic and Northeast regions.

Acquisitions may become a larger part of the senior living strategy down the road, the company says.

Alliance anticipates that financing will come largely from existing capital partners.

“Alliance has nearly two dozen capital partners, including some of the most active and sophisticated in senior housing, such as Prudential, AEW, The Carlyle Group and others,” Hiemenz wrote in an email to SHN.

In terms of potential operators, Boyles knows what criteria he will use to evaluate candidates.

“One reason they brought me in with my background is to identify the best in class operators,” he explains.

He will consider operators based foremost on their quality of care, he says. Other important factors will include staffing, ability to partner with home health and acute care, embrace of technology and strong programming that meets the expectations of a discerning consumer.

“I’m looking for operators that are thinking on three or four different levels, not just three meals a day, housekeeping, and the three B’s, as we used to say: bingo, bus rides and Bible study,” he says.

Another multifamily housing company that recently made the move into senior housing is Drever Capital Management. Drever is positioning itself to provide housing to members of its middle-income consumer base as they age; similarly, Alliance’s senior housing division likely will build on the company’s track-record in serving a particular type of customer. In this case, it is a more affluent individual.

“The market will dictate where we’re going to be, but we’re comfortable as a luxury lifestyle brand,” Boyles says.

The decision to expand into senior housing was based on an analysis of demographic trends and consumer and investor demand, Hiemenz stated in a press release.

There is “a lack of investor alternatives for sophisticated sponsors on a national scale,” he noted.

The new senior housing division will unveil its branding in the next two to four weeks, Boyles tells SHN. While it will not be called Alliance Senior Housing, he says the division will “layer and partner” with Alliance’s multifamily operations.

Written by Tim Mullaney