After more than two decades on the financing side of senior living with Piper Jaffray, Mark Appelbaum founded development firm Makado Group in 2012. The Minneapolis-based company recently opened its second senior living community and is gaining momentum on a pipeline of future projects.
Though he feels “very positive” about his time with Piper Jaffray, Appelbaum always had an ambition to be in real estate development, he told Senior Housing News. Considering his age and that of his children, the timing finally seemed right to make the move, and he started Makado.
His first project wasn’t a senior living community, however.
“I was hustling and talking to everybody I knew, and an opportunity walked in the door to purchase 30 acres of farmland and turn it into a 56-home community,” he said.
Makado ultimately worked with national home builder Pulte and three local home builders to create the residential community in Maple Grove, Minnesota. As that was in process, Appelbaum continued looking for senior living opportunities, and became aware of a well-located site in the community of Rosemount, south of the Twin Cities.
In 2016, The Rosemount at Steeple Center opened its doors. The community has 92 units of independent living, assisted living and memory care, and is now fully stabilized.
The operator of the Rosemount is Cassia, the Minneapolis-based organization that resulted from the merger of Augustana Care and Elim Care. Cassia is looking to grow its senior living portfolio by adding both owned and third-party managed communities, CEO Bob Dahl recently told SHN, adding that he is pleased to be a management partner for Makado.
Indeed, Makado and Cassia partnered up for a second project, which opened in January. This property is a 91-unit building offering independent living, assisted living, memory care and respite care. It is located in the town of New Prague, Minnesota and is called Praha Village (pictured above).
“The intelligent design that Mark put into that building was really impressive,” Dahl said.
Recommended SHN+ Exclusives
The design was informed by New Prague’s strong Czech heritage, Appelbaum explained.
“I prefer to do developments in communities that have a real strong sense of themselves and identity, where we can come in and be a part of the fabric of who they are,” he said.
Makado conducted six listening sessions with stakeholders in New Prague as the community was in the design phase. The goal was to truly understand the nuances of the local area and reflect those nuances in the senior living building.
Praha Village not only achieves this through its building materials and through the inclusion of maker spaces and arts and crafts areas, but in the operations. For example, Makado learned of a nearby hotel with a chef who had written a well-regarded cookbook of Czech and German recipes. Now, the dining program periodically features those recipes.
In addition to these touches, Makado invested in environmental efficiency features, full backup power in case of an outage, and in upgraded materials for memory care and other parts of the building.
“We develop with a long-term mindset; we’re not a merchant developer,” Appelbaum said. “That gets reflected, we feel, in decisions we make.”
Sites have been hard to come by in recent years, due to a combination of labor challenges, cost concerns, zoning wrinkles and other factors, but Makado currently has several projects that are close to being finalized, Appelbaum said. He anticipates that some could break ground this year.
The goal is to add two to three communities a year, which could involve going outside of Minnesota. However, Appelbaum does not want to compromise on site selection or quality of construction in the interests of expanding the portfolio. His mindset is informed, at least in part, from his deep experience as a financer.
“Sometimes I think it’s easy in a bull market for developers to put things up that aren’t quite thought-through,” he said. “Especially if you have a long-term view, you will have to live through down markets. We always want to be the differentiated, value-add option in the market.”