CHICAGO—As reported in GlobeSt.com last week, ChicagoPacific Founders has just launched a senior living platform called CPFLiving Communities, and officials with the new company saythey plan to invest about $250 million in senior living assets overthe next three to four years. And Rick Shamberg,the managing partner of Cerulean Partners LLC anda consultant to CPF, tells GlobeSt.com that it's an opportune timeto invest in senior-focused properties.

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“There is a great deal of new development going on across thenation,” he says, but some of those projects, even oneswell-located and well-constructed, could falter. And those projectscould provide CPF with opportunities.

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“Sometimes class A product in good locations will not have theright management or is ill-conceived in some way,” Shamberg adds,but with the depth of experience at CPF, he believes the group canpick up such properties for low prices and turn them around. “Wecan find some diamonds in the rough that others have not beensuccessful at.”

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The Chicago- and San Francisco-based CPF team includesJohn P. Rijos, a founding operating partner andthe former co-president and chief operating officer ofBrookdale Senior Living. MaryTolan, also a founder and the managing director at CPF, isthe former chief executive officer of Accretive HealthInc.

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“This is a good time to jump into this business,” Shamberg says,because even though the population is aging, “the real boom is notcoming for a few more years,” at least until the baby-boomgeneration begins to retire. “This is going to be a high-growthbusiness for the next 20 years, and this will be the first ofseveral funds” that CPF will launch.

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In addition to launching this platform, CPF Living just acquiredits first two senior living properties. The company boughtEchelon Senior Living, an independent livingcommunity in Las Vegas, and the Atrium ofBelleville, an independent living community in suburbanSt. Louis. Both properties have another quality that CPF Livingwill look for: adjacent land that the company can use to add otherservices such as assisted living and memory care.

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CPF Living also acquired a majority stake in Minneapolis-basedGrace Management, Inc., which manages seniorliving communities. “This allows us to own the hardware and thesoftware,” Shamberg says. “The coming generation of seniors willwant additional amenities and services, and an owner that usesthird-party management will not have enough control” to implementchange.

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Shamberg says that many of their best opportunities could comeabout if the coming senior living building boom attracts developerswithout the proper experience to run these communities. Mostexperts say this was common during the 1990s construction boom.“Many of these owners did not realize just how significant of anoperating business it was; you're delivering healthcare and you'redealing with the emotional needs of seniors and theirfamilies.”

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CPF Living is interested both in newer facilities and theseolder properties, he adds. “We're not afraid to buy legacy assetsthat may need a makeover, especially if it's in a good location.Grace has a great reputation as a turnaround company, and, frankly,that's where we can get the best returns.”

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Brian J. Rogal

Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.