Developer Douglas Wilson Partners with HCP, Milestone to Make Senior Housing Debut

Douglas Wilson Companies (DWC), a noted San Diego-based real estate developer, has officially entered the senior living game by opening Sienna at Otay Ranch, in partnership with two well-known names in the industry: Milestone Retirement Communities and HCP Inc. (NYSE: HCP).

DWC plans to open additional senior living communities throughout the western U.S. over the next decade. The firm currently is at work on one other project and is looking at several other parcels for land acquisition, Chairman and CEO Douglas Wilson told Senior Housing News.

Founded in 1989, the firm made its reputation in high-end condo development, particularly around San Diego’s Petco Park baseball stadium. DWC went on to specialize in receivership situations and has handled more than $15 billion in troubled properties across a variety of asset classes. In 2015, the firm announced that it would enter the senior living sector, had secured a site for development and partnered with Milestone as the operator. With a portfolio of more than 90 communities, Vancouver, Washington-based Milestone is one of the 20 largest senior living providers in the nation.

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At that time, Douglas Wilson Companies was still seeking another capital partner for its first project. It found that partner in Irvine, California-based real estate investment trust HCP, one of the largest owners of U.S. senior housing properties.

DWC could not immediately provide details on HCP’s financial stake in the Sienna at Otay Ranch project, and HCP did not respond to requests for comment from Senior Housing News.

The total project cost for Sienna at Otay Ranch ran to $32 million. Milestone also has an ownership stake in the venture.

Sienna at Otay Ranch is located just south of San Diego, in Chula Vista, California, on a plot of land that was previously owned by a church, Calvary Chapel. The two-story building consists of 85 assisted living apartment and 26 memory care units.

Airy common space at Sienna at Otay Ranch, with chairs, tables, couch Sienna at Otay Ranch

The property includes a wellness center offering services such as optometry, dentistry and podiatry, with a nurse practitioner regularly scheduled to be on site. However, the community is fully amenitized, with a resort-like approach to design and programming.

“Today’s generation of healthier, more independent-minded seniors is unwilling to settle for facilities built 20-30 years ago,” Douglas Wilson said in a press release issued Monday. “Their expectations are higher, and the range of care they need fluctuates dramatically. To meet this demand, we’re planning more properties like Sienna, which we’ll add to DWC’s build-and-hold portfolio.”

While it has been about three years since Douglas Wilson Companies first announced its senior living plans, this project was not beset by any significant setbacks.

There were some delays in licensing, due to changes enacted by the state of California, Milestone CEO Paul Dendy told SHN. However, in terms of the construction schedule, the project came in on time and on budget.

“The Douglas Wilson Companies are a pleasure to work with. They are very experienced in all facets of development from site acquisition forward,” Dendy told SHN. “During construction, their attention to all construction, draw and relationship management on the project was second to none.”

Residents began moving into Sienna at Otay Ranch in late 2018. Lease-up has been going well, with occupancy exceeding expectations, according to DWC’s press release.

Going forward, DWC is primarily pursuing in new development but is also interested in acquistions, Wilson told SHN.

As the portfolio expands, not every DWC project will bear the “Sienna” name.

“Each community development by Douglas Wilson Companies will be named individually and representative of the community and context in which the senior living community resides,” Wilson said.

Drawn by attractive demographic trends, the senior housing sector has seen an influx of new developers and investors in recent years, raising some concerns that inexperienced parties will flood the market and create unsuccessful projects. Douglas Wilson was aware of these concerns as he led his company into the space.

“I think that’s a legitimate concern in a lot of businesses, if you have not ready for prime-time players getting involved,” Wilson told SHN in 2015, adding that he was focused on aligning with experienced senior living industry partners.

The approach has paid off, according to Milestone’s Dendy.

“Though Sienna at Otay Ranch was their first seniors housing community, the amount of learned knowledge about seniors housing obtained prior to their committing to this development proved to be a significant help in the process,” Dendy said.

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