Alliance Residential is slowly but surely executing on its more than $1 billion senior housing pipeline — and while Covid-19 isn’t halting its plans, the pandemic is informing how the company moves forward.
The Phoenix-based company is among the largest multifamily managers and developers in the U.S., with a $20 billion portfolio spread across 36 major metro areas as of last year. It made a splash in the senior housing world in 2015 when it announced a billion-dollar pipeline of senior living communities.
Five years later, Alliance is making good on that plan. In January, Alliance opened its inaugural senior housing community, an active adult property called Marvelle at Southcenter with 166 units in Tukwila, Washington.
But in November, the company is set to reach another important milestone: the grand opening of its first property with independent living, assisted living and memory care. The project, Atria Almaden, is a 200-unit community in San Jose. As the name suggests, the operator is Louisville, Kentucky-based Atria Senior Living.
Once it officially opens, Atria Almaden will represent the first entry in Alliance’s “bread-and-butter” product line of service-enriched senior housing communities, according to Marco Vakili, managing director of senior housing at Alliance.
The community carries an emphasis on physical wellness, with a dedicated open-floor exercise room and a large fitness facility. Other amenities include a golf simulator with extra seating, a theater, conference room for telehealth and small lectures, art studio, card and billiards rooms, a bar and sky lounge, multiple dining venues and a pool and spa. The community has other features that include the use of antimicrobial paint in common areas, a visitor management system with temperature screening, and a concrete and steel construction for both fire protection and sound mitigation.
Of the 16 projects that make up the company’s $1.3 billion pipeline in Oregon, Washington, California, Arizona and Florida, 14 are traditional senior living communities offering independent living and/or assisted living and memory care.
“Our slice of the pie that’s dedicated to senior living [versus multifamily] has been growing, and the partners have viewed it as a more-recession proof segment to be in,” Vakili told SHN.
Including Atria Almaden, Alliance has four senior living communities under construction, with three other operating partners in addition to Atria: Milestone Retirement Communities, Allegro Senior Living and The Arbor Company. The company’s capital partners are USAA, The Carlyle Group, PGIM and AIG.
Although “things are moving a touch slower” due to the Covid-19 pandemic, Vakili said, the pandemic has not stopped any of Alliance’s projects from moving forward. In fact, the pandemic has only strengthened the company’s belief in the industry.
Vakili believes that, as older adults isolate at home, they’re likely missing out on opportunities for socialization or wellness. This presents a chance for senior living providers to make a compelling case that their communities are actually safer, healthier places for older adults to live than at home.
“The fundamentals of senior living … have not changed,” Vakili said. “We’re actually more bullish on the value that senior living communities bring to the table because of the pandemic.”
In the last eight months or so, Alliance has also identified several opportunities for improvement in design and operations amid the global pandemic. The company recently authored an internal white paper with three of its partners — THW Architects, Ankrom Moisan Architecture and Direct Supply — detailing some design strategies to stop or delay the spread of the novel coronavirus. They include a specially made grommet with a divider that can be attached to a reception desk, and more flexible common spaces that can be used differently if a community is in lockdown.
“Imagine sitting down in front of an adult daughter and her mom, and they’re looking across the table at you a sales meeting and saying, ‘What have you done to make this community a safe place to live?’” Vakili said. “And we need to be able to answer that question in a compelling and honest way.”
The company has also learned a thing or two about operating a community in the middle of a pandemic. At Marvelle at Southcenter, the company has been able to maintain lease-up in accordance with its budget, even throughout the worst days of the pandemic, according to Dale Boyles, managing director of senior housing for Alliance.
“I really thought, like a lot of us in the industry, it would hit more of a wall,” Boyles told SHN. “But it’s chugged along … as proof of concept for our first active adult building.”
With much of its pipeline yet to open through 2022, Alliance has its work cut out for the foreseeable future. Beyond that, the company will focus on markets where the company can bring significant resources to bear, and where its capital partners want to be.
Geographically, that means the company will focus on the West Coast, Southwest, Northeast and Florida.
“We grow and stay focused on where the company has a solid footprint and resources,” Boyles told SHN. “Where we are today is solid, and will provide us opportunity for the next couple of years.”