Wolff Brings Silicon Valley Investors to Senior Housing

Another big player in multifamily housing is entering the senior housing sector, with plans to stay. 

The Wolff Company, a middle-market real estate private equity firm based in Scottsdale, Arizona, recently announced its plans to develop several senior living apartment communities during the first quarter of 2016. The first six developments, located in Washington, California, Nevada and Colorado, are expected to break ground over the next three to four months.

Ultimately, Wolff is hoping to become “a leader in the design and development of senior projects,” Mike Milhaupt, Wolff’s vice president of senior housing, told Senior Housing News. 

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The sheer amount Wolff plans to invest in senior housing is certainly indicative of that goal. According to a press release, the company is planning to invest between $300 million and $400 million per year in the development of independent and assisted living communities, in addition to buying existing communities.

From the start, Wolff, which previously dealt only in multifamily assets, expects to stand out from its senior housing competition.

The company is “going a little bit against the grain and designing more all-independent living communities, or more independent living than assisted living,” according to Milhaupt. 

“Our initial developments are going to be licensed for assisted living, but primarily independent,” he explained to SHN.

Beyond its first six developments, Wolff is considering developing highrises with both multifamily and senior living, Milhaupt said. The company is looking at future projects in urban areas, as well as in the suburbs, and it is open to acquiring and modernizing existing senior living communities.

“We are very close to reaching an agreement on a site in Los Angeles County, one near Sacramento and another one in the Las Vegas area,” Milhaupt told SHN, adding that Wolff also plans to look around Denver.

“We are looking to build everywhere from Colorado, west,” he said. “Our goal is to build six to eight projects every year, and also to buy. We’ve bought two senior apartment communities, and we’re looking at buying one or two more.”

Wolff also expects to hire two or three third-party management companies to run the senior communities, he added.

Most of Wolff’s equity comes from Silicon Valley, including high-net worth individuals or funds, Milhaupt said. Keeping in line with the Silicon Valley mindset, Wolff is aiming to embrace technology in a way that is beneficial for its senior living residents.

“We’ll bring no predisposition on design,” Milhaupt told SHN. “We don’t want to be satisfied doing what’s been done before—we want to innovate on the physical side.”

In that same vein, Wolff is not trying to repeat the mistakes of the past. 

“We’re not going to be stupid with 20-30 projects a year, like the late 90’s,” Milhaupt said.

Eventually, Wolff would like to have an evergreen portfolio of senior assets, Milhaupt told SHN. He thinks it makes sense to hold the properties long-term, but noted the company will do whatever makes the most sense.

“Our intention is these are not build and lease and sell in two or three years,” he said.

Wolff joins several other prominent, established real estate developers and investors that are now entering the senior housing sector, including Alliance Residential, Drever Capital Management and Douglas Wilson Companies.

Written by Mary Kate Nelson

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