WRC Development Continues to Expand Towne Club Senior Living Brand

WRC Development Partners started building senior housing out of necessity, but solid returns have led to a robust platform.

Today, the affiliate of New York City-based real estate investment brokerage and construction consultant Whitestone Realty Capital has operational partnerships with three highly regarded operators, a deep development pipeline and an eye on exiting the properties upon stabilization, WRC Managing Partner Michael Zukerman told Senior Housing News.

It is a strategy to which WRC Development Partners has stayed true since it developed its first senior housing community in 2007, and it is a strategy that keeps it from overbuilding or taking risks in markets where it will not see the returns it seeks.


Post-recession audible

Whitestone Realty Capital’s first foray into the senior living space was assisting two developers secure financing for two Atlanta-area senior housing communities. Financing for one of those properties, Towne Club at Peachtree City, was secured in 2007 through HUD, which was one of the few institutions still lending at the time. The community opened on September 16, 2008 — one day after investment bank Lehman Brothers filed for bankruptcy.

Towne Club at Peachtree City had trouble leasing in the years immediately following the Great Recession. In 2010, Zukerman put together an investor group including an equity investor and an EB-5 investor he represented for many years, bought the note on the property from the lender for $11.25 million and invested another $5 million in improvements, leased the property to stabilization and sold the community for $33 million in 2012.

The success of the Towne Club at Peachtree City turnaround laid the foundation to WRC’s development and exit strategy, Zukerman told SHN. The company looks for good locations in what it calls “brand markets” where the Towne Club brand can attract interest. WRC builds strictly independent living and lower acuity level assisted living with some memory care, and seeks out well-known operators as investment partners and to manage the properties.


Currently, WRC has operating relationships with Princeton, New Jersey-based Solvere Senior Living, which operates seven communities; Boston-based Beacon Communities manages one community; and Des Moines, Iowa-based Life Care Services, which operates two communities. WRC is also in discussions with a fourth, unnamed operator.

The combination of good locations, brand awareness and solid operational partnerships has allowed WRC to see solid yields upon exiting a community. The returns on investment remain solid, even if there is cap rate compression in a sale, Zukerman told SHN.

“If we do senior housing right, the spread between what we can build it for and what we can sell it should be at least 300 basis points,” he said.

An ambitious pipeline

WRC Development Partners is looking to bring the Towne Club brand to other in-demand markets. It has three projects breaking ground this year, with another nine sites under control and working through entitlement processes in New York, Georgia, Florida, New Jersey, Connecticut, Maryland and Ohio.

Two of the sites — in Norwich, Connecticut and Hackensack, New Jersey — are in opportunity zones, and WRC is working with opportunity zone funds as investor partners. The company is also in talks with a couple institutional funds to partner on projects, and is looking to use EB-5 funds for a couple others.

Moving forward, Zukerman wants to see WRC break ground on four to five new developments per year, but only if the numbers make sense.

“If we can’t get a return on our costs, we’re out,” Zukerman said.

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