Launching new properties in high-barrier-to-entry markets comes with many challenges, including timeline. The wait between site selection and lease up can be a few years.
Or, says Spencer Silver, it can be 10 to 12 months.
Silver is vice president of real estate investment and development firm Silver Companies, founded in 1941 and headquartered in Boca Raton, Florida. The company began its work in independent and assisted living developments in 2007, and today has a heavy focus on memory care, with 10 communities under its Poet’s Walk model, mostly in Texas and Virginia and — this is key, Silver says — three more coming in Frederick, MD; Palm Beach, Florida; and the greater Las Vegas area.
The company has started construction on two of those three, and based on its history, plans to turn over the keys to an owner-operator that can then move residents within a year.
“We do a lot of research on our markets, and we’re so confident that we start while we are searching for an owner-operator,” Silver says. “With the one-stop-shop that we provide, we really paved a golden path for someone to come in and be able to successfully run a facility like this. Our plan is unique.”
Silver Companies positions itself as offering three major benefits to operators that are seeking new opportunities in memory care in these high-barrier-to-entry markets. Here is a look at those three, and how operators can jump on board for Silver’s three newest communities.
A successful model for launching memory care
While the company got its senior living start in IL and AL and is now moving into 55+, memory care is its bread and butter, with a growing portfolio of what will soon be 13 communities across five states.
The company is focusing on memory care in large part because of the growing need: last year, the Alzheimer’s Association projected the number of Americans age 65 and older — many of whom will develop dementia — to grow from 55 million in 2019 to 88 million by 2050.
And while more and more health care services are moving into the home, memory care will remain a community-based need.
With all that in mind, the Silver Companies breaks its process down into three steps. First, the company identifies high-income areas, nearly all metro, where well-off 40- to 60-year-olds live and are inclined to move their parents. Second, they develop buildings that are fully furnished and equipped, including nursing stations.
“The most [any operator] has ever asked to change was a color on a carpet,” Silver says. “From that standpoint, we really believe this is a proven model.”
Accelerated timeline from breaking ground to move-ins
The third and final step in the Silver Companies process is the operator handoff. The accelerated timeline from breaking ground to move-ins is the result of ample pre-development work, Silver says, including purchasing the land, getting it zoned, developing the architectural plans and gaining the permits.
“Anyone else wanting to go into these markets — Summerlin, Nevada; Frederick, Maryland; North Palm Beach, Florida — we know from experience that it’s going to be a few years before they see a building there and start seeing a return,” he says.
An investor that lets you be you
Silver is quick to point out what he sees as a significant benefit for operators working with Silver Companies: well defined roles.
“Operation of the health care business is not our expertise, so we don’t need a say in how these communities are operated once they’re open,” he says. “We want to do what we do best: find the site and take you through the entire development process. We know how to build them and build them well.”
Silver believes that his company’s willingness to take on risk and keep its skin in the game as an investor, while also providing bridge financing, makes the company a strong draw to operators entering the memory care space. The approach to financing is but one example of the innovative spirit and outside-the-box planning that Silver Companies brings to memory care.
All of these efforts are done to reduce the risk for owner-operators, thus creating for these operators a smooth, seamless transition to ownership.
“We kind of operate as their real estate department in a sense — we need each other but can’t do each other’s jobs,” he says. “The groups we’ve dealt with, we don’t like to do just one deal with them. We want to do a lot of deals with them. We look for marriages, with operators as creative and open to new ideas as we are.”
To learn more about the new memory care communities coming from Silver Companies, visit SilverCompanies.com.