Cadence Living Invests in People, Waits for Real Estate Cycle to Turn

Two years after its founding, Cadence Living is playing the long game with regard to growth, and to do that it needs top industry talent.

The Scottsdale, Arizona-based senior living developer, owner and operator has in recent months beefed up its corporate leadership team to include Treva Whalen, a former regional operations director for Pacifica Companies; senior housing operations veteran and PruittHealth alumnus Mike Dollander; and Lisa Bernard, who has a sales and marketing track record with previous employers Pathway Senior Living and Brookdale Senior Living (NYSE: BKD).

At the same time, the company is growing, albeit at a more measured pace. Cadence currently is expanding its footprint throughout the U.S., with six owned or managed communities up and running, five more officially under development and a handful of others in the works.

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Most recently, the company acquired a three-community, former Elmcroft Senior Living portfolio in Nashville, Tennessee and Atlanta.

If it seems like the company is biding its time on the acquisitions front, that’s because it is, according to Cadence Co-founder and Principal Rob Leinbach.

The idea is that, with the rate of new supply as high as it is, there will naturally come a day when some projects fail to meet expectations, making the cost of acquiring those properties more agreeable for senior housing owners. And when that day comes, Cadence will be there to invest in the new opportunity.

“Our entire thesis is to build a really strong operator in terms of the people, and then wait for the cycle to turn and make the acquisition opportunities to be more attractive,” Leinbach told Senior Housing News. “We do not believe that the bid/ask in the current state of the cycle is favorable to the acquirer. But, we’re not in a rush.”

Getting its rhythm

Leinbach, along with Cadence Living Principal Eric Gruber, founded the company in 2016. The firm was born out of a third-party manager named Sierra Pointe Management, which itself rose out of Southwest Retirement Corporation, a company that at one time owned or managed 3,000 senior living units across Arizona, Minnesota and Texas.

“The name Cadence refers to music,” Leinbach said. “We want all of our communities to have that rhythm, that beat, that cadence.”

These days, Cadence has its sights set on three main regions: the West Coast, the Mountain states and the Southeast. The current goal is to become a strong regional player in all three of those markets.

“Philosophically, we believe that local regional operators are more successful,” Leinbach said. “It’s a high-touch industry, and we believe very much in high-touch personal services.”

Looking ahead, Cadence will selectively grow over the next year. The company will likely explore more opportunities in California, Arizona, Colorado and the U.S. Southeast.

“Our goal is to grow smartly, strategically and not too aggressively,” Leinbach noted. “We hope that we’ve learned from some of the other historical examples out there of getting too far ahead of your skis.”

But scaling up, even carefully, comes with a host of challenges, finding good employees chief among them. To that end, the operator believes its collaborative company culture will help set it apart from competitors.

“We are listening to everybody in our company in terms of their ideas, and trying to implement their best practices,” Leinbach said. “I think people get excited about being on the front end of a new operator and creating something new as opposed to working at a place that has everything set.”

Development on deck

While Cadence waits for the senior housing acquisition cycle to turn more favorable, it’s also embarking on some development projects.

These projects include Inspira Arrowhead (pictured above), a 165-unit senior living community in Phoenix, being created in partnership with Scottsdale, Arizona-based developer P.B. Bell; and Acoya Scottsdale at Troon, a 135-unit community in Scottsdale backed by Minneapolis-based Ryan Companies.

Overall, Cadence favors communities that have more than 100 units total and “age-in-place” independent living, assisted living and memory care neighborhoods. The operator also prefers to focus on amenities like dining and flexible spaces that can host many different kinds of events. Some of Cadence’s recent projects also include high-end perks for residents such as a golf simulator or a cigar bar.

“Finding core locations in nice neighborhoods, and really building strong amenity packages is where we’ve been focused in creating new senior products,” Leinbach explained.

While each of the communities has its own unique style, all of Cadence’s projects focus on getting residents out of their rooms and into communal spaces where they can mingle.

“The thread that keeps [the portfolio] together is our emphasis … on social interaction programming and making sure we are enhancing the lives of our residents through those interactions,” Leinbach said.

Written by Tim Regan

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