And, by watching and listening to Paul, it’s clear to see that he is fully committed to following his mission through to the end – even if it means never turning off his cell phone.
Recipe for Success Sunrise Senior Living wants to spread it message of choice for seniors as far and wide as possible. But that doesn’t mean it will go into markets where it can’t succeed. As the company grew through the late ’90s, Paul and Terry Klaassen, the founders of the company, and their management team followed a strict formula for success – develop in areas that have high number of 45- to 64-year-old adult children (preferably daughters), avoid the Texas and Florida markets, build in the top 30 U.S. markets, and plan construction three or four years out, in case there are problems in the development process. So far, this strategy has worked, though its recent acquisition of Marriott Senior Living Services will push it into some places it has not developed in, such as Florida and Texas.
It’s decision to focus on locations that have large numbers of adult children is quite simple – they want to be around their parents. “Adult children are a huge influencer of where mom and dad live,” Paul says. This is the main reason Sunrise won’t look to build in Florida. It doesn’t have enough people in that age range. As for Texas, he says it’s so real estate friendly that it’s overbuilt.
The company likes to develop in clusters of six, 12, or 20 communities in markets that are large enough to efficiently use its management, quality assurance, sales and marketing, and regulatory staff. Having a number of sites grouped together also helps because the first Sunrise community will raise awareness about the company and create markets for subsequent communities. Because of this, the company decided to go to Europe instead of smaller U.S. markets, which couldn’t support these clusters. The company has three communities open in London and two more on the way. It’s also building four communities in Germany.
Once Sunrise finds a market and site that it likes, it budgets two years for zoning and one year for construction in the development process. Paul says this is necessary because land is almost never zoned for senior living, meaning that the company must fight not-in-my-back-yard (NIMBY) issues when it wants to build a new community. “It only takes one or two neighbors to oppose something, even if a community is 95 percent in favor,” he says. “nimby-ism, when combined with a willingness to spend legal dollars, can stall a project. But we wait it out and be patient.”
