Colorado Real Estate Journal -
This is a big year for Denverbased MorningStar Senior Living. Not only is it celebrating 10 years in business, but also it is embarking on almost $120 million in new developments in Colorado. “That is more than normal” to have in the development pipeline, said Matt Turner, chief financial officer and chief development officer for MorningStar. The company has managed, developed, acquired and/or sold more than 3,000 units of senor housing since Ken Jaeger founded the company in Denver in 2003. “We are in a uniquely good phase and see a uniquely good opportunity for high-quality developments,” Turner said. Jaeger, the CEO of the MorningStar Senior Living, said he and his team took advantage of the Great Recession to prepare for a recovery. “During the downturn in 2009 until late 2011 or early 2012, there was not a whole lot of lending going on,” Jaeger said. “Basically, the banking industry just shut down,” he said. “During that time, we continued to look for opportunities and we were studying the demographics, so we could lock up the very best locations,” he said. “Our strategy was that we would be ready to go when the market turned,” he said. Turner agreed. “We were able to aggressively seek out and secure what we believe to be the best sites in the area,” he said. New centers will be built in RidgeGate in Lone Tree, Fort Collins, Boulder and Littleton. In addition to Colorado, MorningStar has been involved in developments in the Midwest, other states in the Rocky Mountain region and on the West Coast. In Arizona, it has four projects in its pipeline with a construction cost of $93.1 million. In other words, it has more than $200 million in projects moving forward in Colorado and Arizona. It currently owns, operates or has under development a portfolio of more than 1,300 units in 16 communities in Colorado, Arizona and Texas, with a total stabilized value of approximately $400 million. A total of seven new communities are planned in 2014-2015. Jaeger is a veteran of the senior and memory-care housing world. “I worked in the senior housing corporate world for 16 or 17 years before starting MorningStar,” he said. “I learned a lot, primarily in operations,” Jaeger said. “I worked for a company that was building and delivering about 300 new properties a year across the U.S.,” he said. Jaeger concentrated on startups on the West Coast, but his territory included Denver, Seattle, San Francisco and Seattle. “I had lived in Denver since 1983 and I decided I wanted to design, develop and deliver high end senior housing communities,” he said. But he didn’t want to do huge communities. “I felt like there was a void in the demographics out there,” he said. “I had this specific prototype of wanting to develop and operate 85- to 100-unit communities,” he said. “Our first project was MorningStar Assisted Living of Littleton, right in our backyard, off of Kipling near Belleview,” he said. The group has sold some of the projects it has developed, but continues to manage them, Jaeger said. “One of the things we do is operate them like they were five-star resorts,” he said. MorningStar can provide a wide range of services, from independent living to assisted living and basic care to Alzheimer’s support. MorningStar’s continuum of service allows residents to extend their stay until a diagnosis calls for 24-hour nursing. MorningStar also opens its homes for short-term stays through respite care and day programs. It typically costs between $4,000 to $6,000 per month to live in one of its facilities. “Without a doubt, some people experience sticker shock” when they learn of the cost, Turner said. “But they need to understand that they receive a lot of value for the money,” he said. The cost, he said, includes all of their meals, transportation and the level of service they have signed up for. “We build them as self-contained communities,” Jaeger said. “They have libraries, and clubs and theaters and spas. Basically, you never have to leave, if you don’t want to,” he said. “If you do need to go to a medical appointment, for example, we provide the transportation.” Often, residents have sold their single-family homes and are using proceeds from the sale to pay for assisted living. In many cases, their children have moved their elderly parents to the facilities in order to be close to them, he said. Other times, the seniors themselves make the decision to live in one of their communities, he said. “Certainly, there is some correlation between the general housing market and the demand for our product,” Turner said. “But, largely, we find the demand is on a need-based nature, especially when it comes to memory care,” he said.