Those who believe senior housing needs more high-quality operators might welcome a new entrant helmed by a former executive with industry giant Brookdale, backed by an investment firm with bona fides in the sector.
Nashville-based Vitality Senior Living currently is pursuing new development in several markets in the Midwest, Northeast, and Southeast, and expects to announce its first firm contract within 60 to 90 days, says Chris Guay, the new provider’s president and CEO.
Vitality also is interested in acquisition opportunities. The plan is to begin by constructing or acquiring assisted living and memory care communities in the 80- to 120-bed range, although “flexibility” is a guiding principle for the company, Guay tells Senior Housing News. Ultimately, the goal is to expand into other asset types, perhaps including independent living, home care, and continuing care retirement communities.
Learning from experience
Guay has some expertise when it comes to building a company with multiple services; he previously served as Northeast Division President for Brookdale Senior Living (NYSE: BKD), overseeing 275 communities across 18 states for the nation’s largest provider. Prior to that, he was a senior executive with Emeritus Corp., where he led the company’s Nurse on Call acquisition. He believes that Brookdale has done well with integrating ancillary services with its core senior living business, and thinks Vitality ultimately can benefit from similar “synergies” across the care continuum.
Guay is joined by Elliott Westerman, who is Vitality’s senior vice president of acquisitions and finance. Westerman previously was vice president of asset management with Holiday Retirement, and before that was the primary underwriter for Emeritus Corp.’s Nurse on Call and Sunwest acquisitions.
Vitality is a portfolio company of West Partners, LLC, which has committed to an initial $100 million equity investment. Vitality intends to combine this capital with traditional financing to pursue its strategic developments and acquisitions without becoming over-leveraged with debt, Guay says.
West Coast roots
San Diego-based West Partners invests in private companies, and all its capital comes from the West Family, which includes the Gary and Mary West Foundation, West Health Institute, and affiliated entities. West Partners has no time constraints on its investment horizon—a point that Guay empahsizes.
“The idea is not to build something and sell in five years,” he says. “It’s a long-term play.”
West Partners’ first investment in senior housing created WESTliving, which was formed in 2009 and now has 10 communities in California, with another under development. The decision for West Partners to invest in senior living made sense, considering that Gary and Mary West are dedicated to the cause of successful aging, and that is a focus of their philanthropic enterprises, says Marc Harper, CFO of West Partners. Partly because the Foundation works on aging-related projects with several universities across the country—including the University of North Carolina at Chapel Hill, Vanderbilt University in Nashville, and the University of California, San Diego—West Partners became interested in expanding WESTliving nationwide.
However, the leaders of WESTliving wanted to remain focused on the West Coast, leading to the creation of Vitality Senior Living, which will be a sister company of WESTliving. The two operators will not have any communities in the same geographic areas, according to Harper.
Leaving a legacy
Vitality is a for-profit company, but the goal of West Partners is to fund the West Family’s philanthropic ventures in perpetuity. This creates a unique arrangement that will be reflected in a “philanthropic spirit” at the Vitality communities, says Guay. Other defining characteristics of a Vitality community will be a focus on technology, particularly in its ground-up developments.
“The goal is to be paperless on day one,” he says.
Other priorities include an ongoing connection with university-based research; access to the outdoors, including for its memory care residents; an overall design that supports the particular needs and desires of its residents, and that will be flexible to shift for future needs; and amenities such as bistros and all-day dining that have become increasingly popular in high-end senior living.
Vitality will start with a private pay model, but over time Guay would like to offer a more “all-encompassing” model that includes affordable options.
The leaders of Vitality know it will take time to realize their ambitions, but that’s okay with them. They are not rushing, particularly given the high price of acquisitions in the current market as well as concerns about overbuilding in certain areas across the country.
“We can be patient, that’s the key,” says Guay. “The integrity of what Vitality will be really lies in these first couple moves and how we start out, we want to make sure we do it right.”
Written by Tim Mullaney