EXPERT OPINION: A Conversation with Bill Kaplan

In this "Expert Opinion" interview, Bill Kaplan, Co-Founder and Chairman, Senior Lifestyle Corporation, discusses shifts in seniors housing, REITs, seniors housing values, market rate properties, acquisitions, and more......

Bill Kaplan Senior Lifestyle CorporationWatch the video      Read the transcript

William B. Kaplan is the Chairman of the Board of Senior Lifestyle Corporation. He has been engaged in the seniors housing and development and management business for more than 25 years. Mr. Kaplan and James B. Klutznick co-founded Senior Lifestyle Corporation in 1985 to assist in meeting the increasing demand for quality seniors housing throughout the country. In 1993, with its portfolio growing, Mr. Kaplan launched Senior Suites Chicago Corporation. Developed in cooperation with the City of Chicago’s Mayor’s Office and its various departments, Seniors Suites provides affordable retirement apartments for income qualified residents in various neighborhoods throughout Chicago. Through Mr. Kaplan’s leadership, Senior Lifestyle has grown to be a nationally recognized owner and operator of over 84 communities throughout 19 states. Mr. Kaplan has served on numerous boards and committees and has received several awards, including: President, Meals on Wheels, Chicago; Chairman (2004-2006), Vice Chairman of the American Senior Housing Association (2000 – 2001) and Chairman of the American Seniors Housing Association (2002-2003); Member of the Institute of Real Estate Management, holding their Certified Property Manager Designation; Member of the Board of Directors of Shelby Williams Industries, A New York Stock Exchange Company; President Emeritus and Member of the Executive Board of the Chicago Fund on Aging and Disability; Former Vice Chairman of the Board of the YMCA Lawson House, Chicago's largest single-room occupancy hotel; Recipient of the City of Chicago's National Council on Aging's Distinguished Achievement Award; and Recipient of the City of Chicago's 2001 Luminary Senior Award and Seniors' Hall of Fame.
 

 

Contact Information:
William B. Kaplan
Co-Founder and Chairman
Senior Lifestyle Corporation
bkaplan@seniorlifestyle.com



 
Watch the video of the interview: 
 

 

Read the interview transcript:

Steve Monroe
I’m sitting here with Bill Kaplan, he's the founder and chairman of Senior Lifestyle Corp. Good to have you with me, Bill. You've been in the senior housing industry a little over 25 years now, you've seen pretty much everything, several cycles. Is today a good time to buy, build or sell?

Bill Kaplan
Well, I've been in the industry now 27 years and you're right, I have gone through so many cycles. If you look at the demographics today, the senior population, you know in the next 10, 15 years, there's going to be a senior explosion. Now, the question is what are the opportunities today? Personally, and as a company, we're looking at getting back into development. And we're heavily into a development mode.

In addition, we have acquired in the last about six months over 3,000 units. And there are still opportunities out there. So we started as a developer, we then made the next transition into acquisition in addition to development.  And now, 27 years later, we're doing both, acquisition and development.

Steve Monroe
For 2012, we haven't finished our number crunching yet, but through September 30th, we were at a record high for average prices in the senior housing market. What do you think of the high values today? 

Bill Kaplan
There's no question we do see the high values. As a result, we have taken advantage of these high values by selling approximately 20 of our properties to a REIT. So, what we did was a recycling of our equity dollars. We're liquidating, we're taking back management. We are taking those dollars that we've generated and putting it back into acquisitions.

Steve Monroe
Well, talking about dollars, you've done traditional mortgage financing. As you just said you've done REIT financing just in a couple of large transactions. You've done agency financings. Capital markets have come back fairly strongly since the Great Recession. Do you think capital markets are going to be ready to fund the demand of the baby boomers for seniors housing?

Bill Kaplan
I think there are opportunities out there in the capital markets. For example, we have a number of banking relationships in the Midwest, where we're based. Many of these relationships have come to us and said "We're now ready to get back into senior housing." And these are individuals or these are banking relationships that probably were on the sideline for the last three, four, five years. But now they feel comfortable and confident that there's a real opportunity going forward.  But, again, you have to look at the borrower and the relationship between the borrower and the financial institution.

In addition, we're finding there are pension funds. We just broke ground on a very large assisted living, memory care, Alzheimer's community in Northbrook, Illinois. It’s very high end. And we found the debt with a state pension fund. They provided 50% of that debt and, based on that relationship going forward, they have indicated that they're willing to do more.

Steve Monroe
Well, we'll see what happens. Now, you are best known for your market rate—at least in the industry—for your market rate properties. But unlike many of your market rate competitors, you've gotten into the affordable senior housing business. How's that going for you?

Bill Kaplan
It's going very, very well. It's a process. I started out in market rate housing. Then, in the mid-90s, I got into affordable senior housing. I never expected that sitting here in 2013, that we would have built 24 affordable senior housing communities, with two more under construction.  In the mid-2000s, we also did middle market senior housing. So we're the only senior housing company, in my opinion, that has done market rate, middle market and affordable and now we have a new product type, we just got into SLPs or better known as supportive living communities.

Steve Monroe
That's in Illinois?

Bill Kaplan
Yes, that's in Illinois. 

Steve Monroe
But why do you think some of your competitors, or pretty much all of your competitors, have not also joined the affordable senior housing bandwagon, because that's where the growth is going to be.

Bill Kaplan
Two reasons, maybe even three. It's very political, it's about relationships. From a competitive standpoint—and I know many have come to me and looked at it—it's not as profitable as market rate. This was an opportunity for us to get into that business and give something back. Now, we don't lose money. It's profitable, but not in comparison to—on an apples to apples basis.

Steve Monroe
Good luck on your new development program. I'm sure you'll be as successful as you've already been.

Bill Kaplan
Thank you and this is a new opportunity for us, because I just acquired a development team that was in the industry. It was, I don't know if you know Matt Phillips?  From Integrated?  Well, we just acquired his company. He has been focused for the last five years on development. He and I have developed this new prototype for assisted and memory care and we're going to be rolling that out throughout the country. In fact, we're ready to roll out five communities that are ready to break ground and we're close to financing that.

Steve Monroe
All right, well, good luck.

Bill Kaplan
Thank you very much.
 

 


 

 

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