Watermark Retirement Communities’ luxury-focused senior living communities have weathered the pandemic — and now leaders with the company are setting their sights on further growing that portfolio.
The Tucson, Arizona-based company is deepening its focus on luxury with two nearly identical brands: The Elan Collection, which currently numbers five communities in three states; and The Elite Collection, which is facilitated through a partnership with Silverstone Senior Living and currently numbers two communities in Virginia and Texas.
In terms of services and features, both brands are very similar, with resort-style amenities and high-end programs catering to a more affluent clientele. Each Elan or Elite community charges rates that are, in most markets, about 10% to 15% higher than the highest-priced local senior living rental community. And for new residents, the communities come with one-time “membership fees” that can range from $30,000 to $70,000.
In essence, Watermark’s new communities are designed to compete with high-end continuing care retirement communities (CCRCs), according to Chairman David Freshwater. The luxury brands represent the company’s current focus with regard to new development.
“We are developing virtually only Elite and Elan communities. Our new developments are almost all that,” Freshwater told Senior Housing News.
In addition to its new development projects, Watermark also has a handful of projects that involve repositioning older buildings to become luxury communities.
That includes Watermark at Westwood Village in Los Angeles (pictured below), a recently opened community that is a redevelopment of a former UCLA dormitory originally designed by renowned architect Dan Palmer and built in the 1960s. The community is located directly across from the UCLA campus, and comes with amenities such as several upscale restaurants, a salon and spa, library and lounge and a wellness center.
Watermark currently has 65 open properties in 21 states, with eight others under development in Alexandria, Virginia; Rockville and Largo, Maryland; Coral Gables, Watersound and West Palm Beach, Florida; and Austin and Houston, Texas.
Underpinning Watermark’s new luxury brands are wellness and culinary offerings that cater to the incoming baby boomer generation.
For example, Watermark at Westwood Village is working with UCLA’s Longevity Center. The relationship will give residents of the community access to “research-based enhancement classes” to help them learn more about the science behind memory and enhance their own cognitive abilities.
Another example lies in The Hacienda at Georgetown, an Elan Collection community slated to open next year in Georgetown, Texas. As planned, the community is slated to include four dining venues conceptualized by Stephan Pyles, a celebrity chef who has also worked with Buckner Retirement Services.
Freshwater said these kind of offerings are key for providers who want to attract baby boomers, who by and large “refuse to age.” And Freshwater would know — he’s a boomer, himself.
“If you’re just doing care and food and service, I don’t think that will resonate in 10 years when we are serving almost exclusively baby boomers,” Freshwater said. “We have to have a value proposition where they see that we truly get them as a person.”
Helping to lead that charge is Aras Erekul, a former corporate director of experience development with wellness and resort pioneer Canyon Ranch, who came aboard in 2019.
In addition to specific offerings, Watermark’s leaders are also focused on integrating wellness into the fabric of Elan and Elite Collection community operations. Under this approach, Watermark seeks to help residents live their best lives, whether that’s eating a special diet or training to walk a mile a day.
“We are committed to them thriving at their optimum level, whatever that level is,” Freshwater said. “That’s our definition of wellness.”
On the culinary side, the company is planning unique restaurants and eateries with menu items that residents ask for, such as organic fare or even delicacies such as Kobe beef. But instead of giving residents a set number of meals every month, the company is instead giving each one monthly “spend-downs” — between $500 and $650, depending on the market — to use on any of the community’s amenities and services, from beer and wine to personal training at a 20% discount. Residents can pay out of pocket for meals or services that exceed that amount.
“We’re doing it as a revenue center, as opposed to a cost center,” Freshwater said.
Looking ahead, Watermark is planning more Elan Collection communities with capital and development partners that include The Blackstone Group (NYSE: BX), Kayne Anderson Real Estate, Hines Development, ZOM and Oppidan Investment Company. Already, there are five new Elan communities in the works, and another four more under construction or in design in the Elite Collection with Silverstone and its capital partners.
Helping to fuel that growth is the fact that many Elan communities have performed relatively well during the pandemic, Freshwater added.
That includes the newly opened Watermark at Westwood Village, which is “getting a lot of really good traction” despite the pandemic and its pressures, he added. Other Elan communities, such as The Hacienda at the Canyon and The Watermark at Napa Valley, “did extremely well with pre-leasing and converting those to move-ins, even with Covid,” Watermark’s Chief Investment Officer Bryan Schachter told SHN.
Another community, The Hacienda at the River, “filled very quickly” in assisted living and memory care — and, Watermark is currently converting the community’s skilled nursing units to independent living, with half of those new units already pre-sold.
That’s not to say there haven’t been some challenges along the way. Watermark’s Brooklyn Heights community, which opened at the end of last year, is still getting on its feet amid New York City’s slow return to normalcy, Freshwater said.
Freshwater, like others in senior living, believes the industry will grow to resemble the hotel industry, with many brands catering to a wide variety of customers. And beyond the Elan Collection, Watermark is searching for ways to cater to other cohorts, such as the middle-market, which is a “discussion in progress.”
“There could be a portfolio that comes onto the market …that is more middle-income … maybe it’s the sole assets of an operator who’s just done a phenomenal job on them,” Freshwater said. “We’re not out looking, but we’re just keeping our eyes open.”