CSH Founder Stewart: We Are Targeting Assisted Living, Active Adult in ‘Barbell’ Growth Strategy

Investors are again showing interest in senior living after a cooldown during the pandemic — and Capitol Seniors Housing Managing Partner and Founder Scott Stewart sees plenty more dollars left to be deployed into the industry.

As he looks across the sector, he sees “billions and billions of dollars” of equity on the sidelines waiting to be deployed into the sector in the months and years to come.

“If you’re an institutional investor, this is the sector to come in to produce yield,” Stewart said during a recent appearance on SHN+ TALKS. “These funds are controlled by very smart people who understand what’s going on out there.”


Washington, D.C.-based Capitol Seniors Housing (CSH) has since its founding in 2003 acquired or developed more than 120 senior housing communities and deployed over $2.5 billion, with help from its capital partners Carlyle Group and Bain Capital Real Estate.

Although the company’s bread-and-butter is assisted living and memory care — and to that end, the company aims to be on “every street corner in Northern New Jersey” — CSH also is focusing on active adult, which it calls “active living.” And looking ahead, Stewart sees that sector as among the “most compelling stories” in real estate.

“We’re going into the Carolinas, into Atlanta, to Florida, to Texas, mostly staying on this side of the Mississippi for now,” he said, of the company’s growth plans for the active adult sector.


We are pleased to share the recording and this transcript of the SHN+ TALKS conversation with SHN+ members. Read on to learn about:

  • Why Stewart believes active adult senior housing is among the most compelling real estate segments
  • How CSH is in its “post-pandemic era” and what the company is planning to do next in 2022
  • CSH’s “barbell” growth strategy for 2022 and beyond

Tim: Good morning, everyone. I’m Tim Regan with Senior Housing News. Welcome to SHN+ talks. If you are joining us again, you know that these are live, interactive, and honest discussions with the people who are shaping senior living. Today I’m joined by Scott Stewart, founder and managing partner of senior housing investment firm Capitol Seniors Housing.

Tim: Thanks, Tim. It’s good to be here. Thanks for having me on.

Tim: Scott, I know we’ve got a lot of ground to cover today, so let’s just jump right into it. I know that Senior Housing News has talked with you more recently than this, but I think it’s been a moment since you and I have personally caught up.

Can you walk us through just how the past two years and change have gone for Capitol Seniors Housing? I know you guys have been busy, but what have been some of the highlights and maybe even some of the lowlights, if you can talk about some of those?

Scott: Geez, how much time do we have here, Tim? It’s been a busy two years. I think the highlights are actually in the lowlights if you think about it.

The industry as a whole just went through a really tough time. The industry was flat on its back. At the height of the pandemic, states were shutting down commissions. Costs were going up because, all of a sudden, it became a dangerous place to work, and materials where PPE had been all used up. We had to go to the black market to restock. Occupancy was going down, expenses going up. Those things were headed in the wrong direction.

On top of that, you looked at the news on the front page of every newspaper above the fold, where senior housing was being painted with one broad brush and being characterized as these tinderboxes or death traps for seniors. It was horrible. There was a time when everybody wondered whether the industry itself was going to survive.

What happened was — and this is the remarkable story of it, I think — is that everybody just showed up for work. They kept their heads down. Everybody kept their cool, their calm, and day by day just figured this whole thing out. With that, you just had hundreds of thousands of lives saved in the process.

People realized that this was war, and the war had to be fought. We had to sit there and wait for the vaccine to come. We knew it was going to come. We’re American, we figure this stuff out. Thank God we did. I tip my hat to the entire industry. Every time I’m given the opportunity, I jump on the soapbox and say that. I gladly do

Tim: Development is tricky. How do you thread that needle in 2022? What does it take to make a development project work these days?

Scott: It has gotten a little more difficult, but we’re playing the long game here. I’ll start off again with the good news: Even though we’ve got runaway inflation, even though we’ve got war in Ukraine, even though we’ve got a tenured treasury talking 3% where it hasn’t been in a while, you’ve still got the ‘silver tsunami.’ It’s not coming, it’s here. The first baby boomers are now in active adult living, with 72 being the average age. That is happening. You’ve got the whole dynamic. Even though it’s tough times ahead, you still have 10,000 seniors, Americans, turning 65 every day all the way up until the year 2030. That’s going to carry the day. That’s what I keep reminding folks about.

That said, we’ve got a recession on our hands. It’s not officially technically a recession yet, but it’s coming. Hopefully, it’s a soft and quick one. I think we’ve got some good people in charge at the Fed who are doing the right moves, and it’s having its impact. With what’s going on with the debt markets, if they haven’t already shut down, they are shutting down. That’s going to change the dynamic of your ability to get loans and construction financing in our case. Right now, you’re looking at 3% to 4% loans or interest rates right now. It’s going to be 6% to 7%. That’s a much tougher nut to crack. Those 300 basis points mean all the difference.

Right now, there’s going to be a shift from non-recourse to recourse. The debt-equity ratio is going to shift to the bad. We’ll see where it goes. Again, we’re very optimistic. The long view, we’ve got four communities that are under construction right now. We’ve got an additional 15 that are in predevelopment. We’re keeping an eye on the cost of things, but at the same time, we’re just plowing ahead.

Tim: How else do you think it might affect the industry or for companies like Capitol Seniors Housing?

Scott: You’re still running a business, and the inflation part is still a real thing. You saw what happened yesterday. It was like 8.3% inflation for last month. These interest rate hikes, there’s a lag effect to them. In the meantime, you still have people that are very expensive to hire, and you’ve got materials on the construction side that are at an all-time high. It’s tough.

We were just talking about this out there. I said, how can you pass those costs along to the consumer before people just say, “Forget it. We’re going to find an alternative to senior housing.” Here too, I think that this is a needs-based product, and people will find a way to cover the costs associated with it, but you’ve got things moving in the wrong direction on a number of different fronts. I am very optimistic that it’s going to smooth itself out. The things we talked about, supply chain issues, the workforce, and how it’s been depleted, those things will work themselves out.

If I can go on a sidebar with that, the really tricky thing and the unsung cause of what’s going on is, during the pandemic, 3.2 million seniors said, “That’s it. We’re retiring now.” Think about that. That’s a huge chunk of people, first off. It’s a huge chunk of the labor force, but it’s also a very experienced part of the labor force. Everybody has the gray around the temples. They’ve seen it all, and they’re very reliable. They show up for work on time, don’t call in. They make it to work. They’ve all moved out.

Now, I think we’ll get a number of them back to be defined as this recession hits because folks will do the math and realize that they haven’t quite saved up as much as they want for retirement. That’s a big contributing factor. There again, I’m very optimistic that all this stuff is going to smooth itself out. We’re going to have a recession that’s going to be one that’s manageable. We’ve got the right people in charge. I’m very confident with our leadership. We’ll get this behind us in a matter of years.

Tim: I’ve heard some people on the development side tell me that they actually like it when things get a little more difficult because it creates higher barriers to entry for more experienced companies. I could see a world in which some of these things, if you can still make your deals work, could differentiate you. Do you feel that way?

Scott: No. You’re right on, Tim. There are silver linings in every scenario, and you just hit on a big one. I think that all the tourists — I call them tourists — who are going to come into these markets, they’re the first ones out. That creates a more favorable dynamic, particularly when you are pursuing markets that have high barriers to entry, which is an absolute part of our game plan. That’s a positive, and it’s a very meaningful one.

Tim: Something that I know we’ve talked a lot about since this pandemic began is what is happening with capital sources and the availability of capital for new projects. I had heard this year that there’s still a lot of capital waiting to be deployed into new development deals and other investments in the industry. Obviously, I think a looming recession might change some of that, or maybe it will spur some of these deals to happen sooner before some of the other effects take effect that you’d mentioned earlier. Do you sense there’s a lot of capital still waiting to be deployed?

Scott: Absolutely. There’s tons of capital out there. This is a very attractive space to come into. It’s high-yielding and it’s recession-proof. It now has a great track record through cycles where it’s demonstrated that this is the place to come. If you’re an institutional investor, this is the sector to come in to produce yield.

With that, there’s billions and billions of dollars; numerous funds — you need two hands to count them — that have billions of dollars of equity on the sidelines just waiting to be deployed into the sector. Now, these funds are controlled by very smart people who understand what’s going on out there. They’re wary of situations where more equity has to go into it. It obviously has an impact on returns. They all shy away from recourse, of course.

That equity has got to follow the moves of the debt market. The debt market, I think, is still figuring itself out, but it’s not really headed in a favorable direction. I look at debt, that’s the first one to leave the party, and they’re the last one to come back.

Tim: Get out your crystal ball. What do you see in construction ahead?

Scott: I think construction’s going to continue to be tapered. Again, all the newbies or the, ‘Hey, let’s build a senior housing community’ tourists — I think they’re completely checked out. That’s a favorable dynamic. I go back to the underlying driver, which is the silver tsunami. Folks continue to get older, and they have to go somewhere.

The demand is outsourcing supply dynamics in senior housing, particularly in active adult, which is I think the biggest and most compelling story in all of real estate. That’s just not me saying that. It’s a lot of folks who are deploying into that sector. That’s going to be the first stop for the baby boomers coming in.

There’s been a fundamental shift, which has been very favorable to the sector, whereby the whole ‘I need to own my property’ desire has changed. A lot of folks who bought their house in Arlington, Virginia, for $35,000 in 1962 and are selling it for $1.1 million, $1.2 million — A 2,000 square foot house — and are now sitting on a pile of money and taking $2,500 to $3,000 a month and living with folks their own age and doing activities with them and enjoying their third act.

That’s been a wonderful dynamic that I’ve seen evolve in the past, call it five years, and it’s just getting better. While there’s a lot of noise, a lot of headwinds that are getting in the way of that supply meeting that demand, I think ultimately it’ll be solved. We’re showing up every day for work doing just that at CSH.

Tim: What difficulties do you see in trying to cater to the desires of the baby boomers, given that they’re still sort of mysterious? How do you make sure that you’re building what they want?

Scott: Yes, that’s a great question. I wish I had the answer to that. That’s an answer that we grapple with all the time. It shifts per market that we’re going into. Our strategy for the active adult is to get in the pathway of growth. For assisted living and memory care, you want to be in an infill location. You want to have generations upon generations living there.

For active adults, it’s different. We’re building a community in Gwinnett, Georgia. It’s coming along great. It’s this huge development. Since we broke ground, we haven’t opened yet, but Top Golf has come in. A pickleball facility has come up with 10 pickleball courts. A kindergarten school has opened in the area as well. All these things that were dirt before coming out of the ground are actually surpassing us and getting open. That’s just going to be a wonderful thing for folks who want to live with people that are like-minded, like-aged, and that have a draw to have their kids, and more importantly, their grandkids come to see them.

You have to pay attention to what’s in the four walls, but you also want to make sure that your surroundings create a very warm environment for folks to live. Being adjacent or walking distance to restaurants or the grocery store, those are very important things. That’s where we’ve headed. As far as within the four walls and the room size, it’s always a trade-off. You want to make sure that you’re building economically so that your rents are conducive to the market that you’re in. You also want to make sure that you’re moving away from having too many studios and not too many bedrooms. We’re finding that is more the thing. This is not assisted living or memory care where the rooms are smaller. You have a center for folks to go out and enjoy all the common areas. Here, you need a little more elbow room. You need storage room, you need closet space because most folks are coming from a much bigger place that they lived in for decades, and downsizing is a tough thing to do.

Tim: This is maybe a silly question, but I heard someone at a recent conference say that pickleball, obviously, is still very popular. Now they’re seeing every community come with golf simulators. Someone said to me, “Maybe golf simulators are the new pickleball.” What do you think about that?

Scott: I think golf simulators are definitely there, but I don’t think they’re going to be used as much as the pickleball course. That stuff’s fun. It gets people together. That’s what it’s all about. People want to get together and they want to have fun. It’s not like people have very strong opinions on what they want to do with, what I call again, their third act. That’s evolved to the good, I think, wonderfully. Even within the past decade. It’s a great thing to see.

Tim: I’ve never actually played pickleball. Maybe that’s why. Another question on construction and then I want to move on. Before the pandemic, we talked a lot about oversupply. That was a real industry fear in a lot of markets. Obviously, those fears subsided a lot with the lull in construction, given Covid. Over the last few months again, I’ve heard a little bit of talk about, in certain markets, construction ramping back up, and the fear that we are going to return to potentially oversupply conditions. Are you thinking about that?

Scott: It’s always on the radar. You’ve got to keep an eye on the fundamentals. The fundamentals are demographics. Demographics are a key one. Do you have enough folks living in the area that will want to come to your community? Enough caregivers? What’s the median household income? What’s the median household value? Those are huge.

Then you want to take the next step, which is to do a competitive survey. Who else is in the market within a five-mile radius? How old are they? What’s the comp set occupancy? It’s critical. If it’s 75, the market doesn’t need you. Why compound the problem by having people beat their heads against the wall and competing and dropping rates? We’ll just politely walk away from that opportunity.

If you have a market where the fundamentals are good, the demographics are good, and the competitive landscape is one that’s favorable, then that’s where we’ll want to go as long as we have all those other things we were talking about: Access to retail, access to other amenities outside of the four walls of the building, that sort of thing.

We keep coming back to this, but I think it’s important. A lot of that has slowed. It slowed a great deal. I think that that’s going to make that demand-outstripping-supply imbalance more favorable to folks like us who want to get out there and find more good locations and develop more high-quality communities.

Tim: Switching to acquisitions, I’ve heard a lot more people talk these days about acquisitions than development. On the acquisition side, what opportunities do you see out there? Has that changed at all in the last 30 days?

Scott: I don’t think it’s changed that much in the last 30 days. It’s changed markedly over the past decade. When we started out with the Carlyle Group, we used to be called Carlyle Seniors Housing. We changed the name to Capitol Seniors Housing a while back. That was the frontier of opportunistically buying communities at a discount to replacement costs, and then executing a business plan to help it hit its potential, whether it’s a fresh coat of paint, new FF&E, a change of operator, more marketing, better sales folks — whatever it took — to lease it up and get the NOI up and then harvest that value at the appropriate time. That was great.

For private equity, that was a much more favorable landscape. The reason for that is, with private equity, you’re always looking to recycle your capital. You don’t want to fall in love with any building and hold onto it for a period that’s typically longer than five years. You can do that with opportunistic investing. When you buy an existing property, you have taken away two of the three risks of development. One, you’ve taken away the development risk, and you’ve taken away the construction risk and you’ve taken away most of the lease-up risk. Therefore, your business plan is a lot more expedient.

When you’re developing, you’ve got to go through a lot of bigger and fiery hoops, and you’re rewarded for that risk. We miss the days when there were a lot of opportunities out there to do opportunistic investing. I’d like to say that all those buffalo got shot. If people are doing well in a particular industry, regardless of what it is, then you’re going to have more folks getting into it. That’s exactly what happened here. This is circa 2005, before the great recession. It was a wonderful climate for that. Now, we still look at opportunities to buy, but we just scare ourselves out of them because the yields are so low because there’s too many competitors out there driving up the price.

Tim: Here’s an audience question: “What makes this especially tricky and delicate is the systemic losses upon our health systems. $340 billion alone in 2020. When you have an industry which dovetails with healthcare systems and both are reliant on each other, how do you think this will be further impacted by a recession? What suggestions does Scott have on how to weather this in the short-term?”

Scott: That’s a good question. I wish I had a better answer than to say that there’s a lot of evolution in all of healthcare and it’s all mostly positive. With technology becoming more efficient, that efficiency is being deployed in other areas of life a lot more readily and more visually. In healthcare, I think that that’s happening. Again, this is a recession-proof industry. People get old, people get sick. That’s not going to stop. I think the demand for what we’re doing is always going to be there. I hope that answers your question.

Tim: I want to talk with you about Bain Capital Real Estate. How did this partnership initially come together? Who picked up the phone and called who? Since then, what have you been able to accomplish together?

Scott: We maintained two great partnerships with our capital friends. One is with the Carlyle Group, and one is with Bain Capital. Everybody knows these two great partners. They’re wonderful, so I can’t talk about one without the other. We started off with Carlyle. We continue our 18-year-plus relationship with Carlyle, we’re crossing a dozen years of working with Bain. It’s always good to have two capital partners. When the pandemic broke out, there was a lot of panic out there. We had a lot of communities where we had just cut the ribbons on them. They were in the early stages of lease-up.

Well, guess what? You’re not leasing up when there’s a do-not-enter sign that’s been slapped up there by the state, so that obviously made a big impact on our pro forma, on our trajectory. Both groups were like, ‘Okay, what is this? What do you think this is going to mean to us?’ We came up with the optimistic, the realistic and the pessimistic scenario, and presented it to each one separately. We’re talking tens of millions of dollars, right? Tens of millions of dollars of capital that we’re going to have to deploy in order to get the train back on the rails after this thing is over. God love them, both of them just stepped up and very calmly said, “All right, that’s what it’s going to take. We’re in, let’s go.” That was a wonderful thing. I’ll never forget that, with each of them having that same kind of mindset: Finish the job, it’s going to hurt to do it, It’s unexpected hurt, but let’s go.

Back to your question. We were exclusive with Carlyle for the longest time, we just thought it was prudent to take on another capital partner, and that was through a relationship that I had with a fellow by the name of Dan Cummings who had made the move from at ironically from Carlyle over to Harvard management company, which runs the largest university endowment on the planet. There was about $37 billion at the time.

They were looking to really grow their real estate platform under Dan. We told them to walk them through what we had been doing for the past eight years or so. It was a good platform and we started executing with them. We were just coming out of the Great Recession, and that’s when we shifted over to a development platform.

Tim: I know that you had sold a seven property portfolio with Bain last October. What made them the right time to sell those and fast forward to now, what are you seeing right now in terms of how communities are being evaluated?

Scott: Yes, those seven and another eight, so we had 15 communities that we were poised to sell in 2020. They were in some form of either under contract or LOI. It was going to be a banner year at CSH in 2020. Well, we all know what happened there, and all 15 of them went poof. Understandably so. I mean, the value of the assets was impacted. I totally get it.

The buyers don’t want to inherit headaches, so there are a lot of folks I’m sure that had very similar stories of deals that they had effectuated that went that were terminated. We forgot about selling anything in 2020, and even in the first half of 2021. We went to work and kept our communities operating as best as we could, kept them clean, kept everybody safe; the workers, the residents.

Then we started to see that build back. The vaccine comes, and hallelujah, the pent-up demand is released. We experienced that to a large magnitude, even had some lingering effects of it, which is great. Didn’t get us all the way to where we were before, but it was a good shot in the arm, no pun intended. So we started the build-back, and at the right time approached the folks who were actually buying those communities from us. A lot of them stepped back into the batter circle and said, yes, let’s do it. There was some rejiggering of purchase prices and those kinds of things, but they still made sense and that was the deal that you’re referencing.

We sold seven communities in the fall of 2021, which was great on a number of different fronts. I think it helped the industry re-establish itself and really feel like they’re moving past the pandemic. Obviously we got hit with another slug of Covid towards the end of the year, but that one wasn’t as dramatic as before. I think that if you ask most folks in this industry, they’ll say that we have returned to more of a normalcy than we have before the pandemic.

Tim: Are you seeing any general trends out there in pricing or valuations? Or anything that has returned to more normal conditions?

Scott: Well, just when we’re normalizing after Covid, now we’re dealing with all this inflation monkey business, and then the war in Ukraine. And, you can’t discount that impact of the supply chain, and the workforce. You throw them in the stew, and that has a negative impact on cap rates. It’s not just for senior housing, it’s a lot of industries, maybe not as much in multifamily or in industrial, which continue to experience booms through as a result of Covid-related issues. I think senior housing is not immune to all these negative dynamics that are out there that are really not controllable.

The impact that it’s going to have on cap price, but that’s the bad news. The good news is keep going back to that silver tsunami. That train is rolling along. As I’ve mentioned, it’s not coming, it’s here and it’s just getting bigger and bigger every day. I genuinely think that that’s going to rue the day for this industry. There’s just so many seniors who love senior housing. Before it was like, “It’s too expensive, and I don’t want to go to the home.’ That dynamic, that mindset, has shifted and I think that just spells good news for this industry.

Tim: I know that CSH was sort of an earlier adopter of what I’ll call the active adult craze. I know that you guys call it active living. Tell me more about how you see the active adult sector evolving.

Scott: It’s a new frontier. It’s nice for you to say that we’re early adopters. I think we were at least third-inning perhaps, but here, too, I think if you really burrow down into it, this is the most compelling … in all of real estate.

Apparently, there’s going to be a need for 60,000 new units each year for up until for the next decade or so. We’re chipping away at that, but we’re only going to produce, if we’re lucky, over 1,000 units each year because we’re not a factory, we handcraft. The product itself is one where it’s very, very simple. Folks want to do activities with each other, they want to live with each other. They want to have baked potato Thursday, as hokey as it sounds. They want to play pickleball, which you never played, Tim.

Tim: [chuckles] I have to start now.

Scott: You have to start, yes. You’re not getting any younger.

You make these communities that meet their needs as far as the space, as far as flow, and as far as amenities in the community go. You also want to have a clubhouse which will be the nerve center, the brain of the community, and you want to have a community director that’s very creative, that knows all the folks, and is making this a responsible and frankly fun place to live.

The competition is multifamily, but most folks don’t want to be in their Champion, baggy sweats on the treadmill next to somebody in Lululemon who’s got a five-degree incline and running seven-minute miles. You have very little in common. The other really interesting thing about this is, we talked about how difficult it is for staffing. Everybody’s got staffing woes. You ask any operator today, what’s your biggest challenge? They’re going to tell you about staffing and what they got to pay folks. Well, with active living, you have essentially five or six employees, and that takes away a giant, giant, giant headache.

Tim: It’s almost like you get the best of multifamily and the best of senior housing.

Scott: Exactly. Yes, and just to put a cap on that, I’ll go back to what I think is a really interesting shift of folks in this generation who needed to own their own property because their dad did and they had deeds and mortgage-burning parties and all that old-school stuff. That time has come and gone, and now there’s a housing boom that so many people took advantage of and liquidated their homes and have now set themselves up for funding the rest of their life.

The last really compelling thing about it — and maybe I’m burying the lead here — is the length of stay. Your folks are staying five to six years, whereas in multifamily it’s less than a year, something like that. And that’s a really, really compelling thing for institutional investors to have that stickiness of your population. That’s what’s got a lot more intelligent capital coming into the sector as a result.

Tim: Do you see active adult as a natural way to meet some of that middle-market demand?

Scott: I think that it is not only a way to meet the middle market, it could be the only way to meet the middle market. If you go the other direction for assisted living memory care, there’s a lot of estates out there that call the middle market a myth. How can you have a middle-market product when you’re still paying $5,000 to $6,000 on the low end per month for your care. That’s expensive.

I think that in the system and memory care, the only way to truly hit the middle market is you’ve got to have some subsidization. You have to have government involvement to bring the cost down or some of these denominational communities, faith-based communities that kick in. The alternative and we’ve seen this a lot is to go down to independent living, where it’s $3,000 a month, but you’ve got a very, very frail population.

A lot of folks who are in independent living shouldn’t be in independent living. They should be in assisted living, but that’s where they are because that’s what they have to afford. We see that it’s inevitable. We’re going to see that dynamic in active adult. The thing is, it’s just so new that you’re not seeing that as an issue.

Tim: I have seen some companies that are getting into the space and creating these platforms with access to health care. How do you feel about those arrangements, and do you think that represents maybe one possible future for this sector and how this might work as people age?

Scott: I do. I think the technology is going to come in more than it has with people being able to just monitor their own health off of their smartphones and such. I also think that physically the community center we talked about, the care or physical therapy room is going to get bigger.

As we all know when you’re in a, say, a CCRC in the independent living section there is a physical separation between that and assisted living and memory care. If you bring it back to active adult, you’re creating communities that are centering on caregiving, or that have acuity creep. You’re going to change the personality of your building. It depends on who you want to attract, and who you want your resident base to be.

We are actually looking at opportunities where active living is close to hospitals, not too far away from assisted living and memory care, that kind of stuff. Moving it on one campus that’s a statement. People ultimately make that statement, but it’s just got to evolve to that.

Tim: Earlier you said something interesting that I want to revisit. I think you said there is smart capital coming into the active adult segment that maybe wasn’t there before. Do you feel like the segments are at an inflection point right now where “smarter” investors are really giving it serious thought and we might see a lot more companies jumping into this in the next months and years?

Scott: Yes, they’re already doing it. Multifamily, those giant mega companies, they’re already doing it. They looked at it and said ‘It’s a decent leap over to active adult, we know how to build multifamily and we have smart people here to tweak the mouse trap into something that folks are going to want and staff accordingly.’

I don’t think that multifamily groups still 100% got the memo on what it is and what it takes for caregiving for seniors. Rest assured, they’ve got the engine to go and create communities that are cost-effective to build and therefore can charge rents that are attractive to folks. They’re getting into it. We’re getting into it. A lot of private equity groups are getting into it. Again, you get that 60,000 units per year of unmet demand to hit the supply, that’s a compelling story.

Tim: You said you had projects in development and in the works. Can you lay that out again? Tell us your strategy for growth this year and what we can expect to see out of you guys in the remainder of 2022 and beyond?

Scott: We have a barbell strategy. Our bread and butter still assisted living and memory care. As well, we are building assisted living memory care in really strong markets. When I say strong, they’ve got top-tier population densities of seniors and of caregivers, high frequency in median household income and median household value.

We want to be in every corner on every street corner in Northern New Jersey, and we’re effectively doing that. That’s our most prolific market because it checks all those boxes. Then there’s Westchester County, there’s Western Long Island, there’s the Boston suburbs, there’s our own backyard in D.C., and on and on. We see a lot of opportunities that still exist because while there is a lot more product than there is the active adult world, that product is aging. When we build a brand new shiny community that’s spectacular, we tend to hit the ground running.

Then the other side of the barbell is the active adult. We’re going into the Carolinas, into Atlanta, to Florida, to Texas, mostly staying on this side of the Mississippi for now. We’ve got a much keener eye on our costs. We know that what we build it for is what we can to give us a cushion of what we have to charge for rents.

Tim: This is a question that I’m sure you’ve gotten a lot over the past couple of years, but keep that crystal ball out. How do you think the overall senior housing recovery from Covid is going to play out over the next year? What are you preparing for? I guess as you look ahead, what worries you, and then what makes you excited or what do you feel good about?

Scott: Our mindset at CSH is that we’re in a post-pandemic era, and I think if you talk to a lot of folks, they’ll tell you that their communities are at levels that are better than pre-pandemic, which obviously is a great thing. That’s a function of running a good show, providing a good product. Also the fact that the cohort of seniors is the fastest growing one in America, it’s really that simple. They need a place to go.

I think that we did get the surge, as I mentioned before, with pent-up demand coming back into the communities. I think that the entire industry has done a fantastic job at reestablishing this product as one that’s safe for their loved ones, for their moms, for their dads. One of the things I love about this industry is it’s new. It’s 40 years old. Before that, you had seniors who were in the back room of the oldest daughter typically, or else they were in a hospital or skilled nursing and it was horrible.

They felt physically horrible because they’re aging, they also felt they were a burden on their family. Fast-forward to today, we have these ideal country club settings where folks are living longer, happier, healthier lives because they have better nutrition, they’ve got preventative healthcare, they’re making friends, they’ve got stimulating activities, they’re safe, and through that, dignity has been restored. We continue to carry that flag every day.

Then you look at, again, the silver tsunami, that is so compelling. 10,000 Americans every day to the year 2030, are you kidding me? What other real estate industry can boast that? Others are worried about shrinking populations. Well, in senior housing we’re not. We have enough space for folks to go.

There’s really no compelling or better story in real estate than senior housing and I’m proud to have dedicated my entire career to it.

Tim: Great. Scott, those were fantastic words to end on.

Scott: Thank you, Tim. It’s always a pleasure talking.

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