Watermark Owner Keppel Taps Hsiao to Lead Senior Living Investment Push

Keppel Corporation — the Singapore-based international conglomerate that holds a 50% stake in Watermark Retirement — has tapped industry veteran Kai Hsiao to lead an expansion of its senior living portfolio in the United States and other global markets.

Hsiao joined Keppel Capital as CEO of Senior Living US in January 2022. Most recently, he was CEO of Eclipse Senior Living, until the provider ceased operations late last year, with its 90-property portfolio subsequently divided among several operators. Previously, Hsiao held a leadership role with real estate investment trust HCP (now Healthpeak) and served as president and CEO of independent living giant Holiday Retirement.

Keppel Capital — the asset management arm of Keppel Corp. — has a presence in more than 40 cities around the world and manages office REIT Keppel Pacific Oak US. Overall, Keppel Capital has about $35 billion of assets under management in real estate, infrastructure, data centers and alternative assets. The firm has a goal of reaching more than $75 billion AUM by 2030.


“Senior living is definitely a piece of that puzzle,” Hsiao said.

Hsiao’s road to Keppel traces back to Tucson, Arizona. That’s where he grew up and earlier in his career worked for pioneering wellness organization Canyon Ranch. At that time, he played basketball with David Freshwater, the chairman of Tucson-based Watermark Retirement, which today operates nearly 60 communities.

The two forged a friendship that was solidified when Hsiao joined the senior living industry — up until that time, he had never really known what Freshwater did for a living, Hsiao recollected during an interview with Senior Housing News at the recent NIC conference.


After Watermark opened its Hacienda at the Canyon community in Tucson, Hsiao was touring the property with Freshwater and “got to talking” with Keppel representatives who were also on site.

“They said, we’d really like someone to lead the charge on doing more senior living,” Hsiao said. “I’ve been keeping in touch with them, and when January rolled around, we said, let’s give it a shot.”

He is taking an expansive view of potential opportunities in the sector, considering investments ranging from active adult through memory care. And Keppel may work with operators beyond Watermark to broaden its reach into various geographies and demographics. But Hsiao emphasized that he and other leaders at Keppel are “aligned” on the importance of partnering with high-quality operators.

“At the end of the day, the value is driven by the operators,” he said. “Having a stake in the operator is really essential in driving that, and you always want to ensure that the operators have the resources to continue to grow and drive that value.”

Keppel’s involvement in the space could include development projects where operators share an equity stake, for example, Hsiao said.

Though pleased with the number of opportunities that have arisen since he joined Keppel, he also noted that a bid-ask spread continues to complicate deals. But with occupancy recovery taking place, he believes that the spread is beginning to compress.

There are other operational challenges at the moment, including a severe labor crunch and rising inflation.

On the labor front, Hsiao is encouraged at seeing how operators have “evolved” their recruitment and retention practices, approaching the process more like the sales funnel by analyzing metrics such as how many applications are coming in, how many interviews are occurring, how many offers are being made and how many new employees are showing up on day one.

In terms of inflation, Hsiao sees higher-end operators being able to raise rates to help offset costs. This is harder for providers targeting a middle-market consumer.

“That’s where I think you’ve got to get a lot more efficiencies on the expense side, and I do think scale is going to help there,” he said.

But bigger-picture, he thinks that it will take an industry-wide push to change public policy to address some of these issues. For instance, he believes new immigration policies are needed, and he pointed to international markets where providers have a greater ability to tap labor from nearby countries. He believes Keppel can play a role in spreading practices such as these, as the company builds a worldwide senior living presence; in addition to Singapore and the United States, Hsiao noted Canada, Europe and China as markets of particular interest.

Hsiao also envisions a “GI Bill” to support education for health care workers in the United States, noting that the overall labor pool has to grow.

To advocate for these and other aims, he questions the effectiveness of having two similar trade organizations in Argentum and the American Seniors Housing Association (ASHA). Acknowledging that he might receive industry blowback for making this case, he said, “I don’t think one plus one equals three.” Rather, having two different groups can be confusing to lawmakers.

“I would say hey, ASHA, Argentum, both the executive teams, let’s meet in a room and figure this thing out,” he said. “If we really want to put the industry in front, I think [we] need to have that conversation.”

Hsiao expressed his own commitment to the industry in the wake of the high-profile shutdown of Eclipse. He did consider leaving senior living and entertained opportunities in sectors ranging from affordable housing to funeral homes, he said.

Ultimately, he decided that no other option offered the same chance at “doing well by doing good.”

“I think people in this industry have a care gene in their DNA,” he said. “It’s in your blood, and that’s why I wanted to stay in the industry.”

Companies featured in this article:

, , , , , , ,