SAN DIEGO—The need for wealth-transfer services by disinterested third parties and the development of highly amenitized assisted-living communities near the adult children of residents is growing, Douglas Wilson Cos.' president John Morrell tells GlobeSt.com.

The firm plans to work with legacy asset stakeholders and their professionals to assist in developing an action plan that best maximizes the value, use and return of these portfolio assets when they are transferred to beneficiaries. The plan's goal will be to set forth the most feasible, value-maximizing course of action, or its alternatives, after the portfolio is assessed and legacy stakeholders have input. In appropriate circumstances, DWC will assist the stakeholders in implementing the selected plan. Also, in appropriate circumstances, DWC will utilize its expertise to continue to assist stakeholders in ongoing portfolio management or disposition.

In addition, after several years of due diligence, DWC is entering the market-rate senior-housing business with the first of six to eight projects in the San Diego area. The firm broke ground in July on its first senior-housing project, a complex of 111 units of assisted living in Chula Vista, CA. The $30-million, 4.5-acre development is located at 1290 Santa Rosa Dr. on the final piece of developable land in Otay Ranch and consist of 85 apartments for assisted living and 26 units for memory care. Completion and grand opening are anticipated in late 2018.

We saw a connection between the two initiatives in the aging of Americans and the upcoming silver tsunami, so we spoke with Morrell about them and why the company is moving in this direction.

GlobeSt.com: What issues do you see with regard to wealth transfer and real estate currently?

Morrell: Properties will have to transition in ownership by virtue of the acquiring generations aging out. Real estate is different from stocks and bonds since holding it is a much more intensive arrangement, so you need to understand how and what you're going to do in the future with regard to ongoing governance of the portfolio. What we're doing in our legacy asset business, besides the business I'm spearheading, are four stages of a segmented service area. The first three services are defined by a fixed fee up front, and each segment is independent but leads down to the fourth—time and materials.

The first segment is an analysis of the portfolio: what is it today, what could it be and what are the opportunities in the portfolio. Often, real estate portfolios have been amassed over a long period of time, and as the creators are aging out, the process of reinvesting it slides down over the last 10 years of the time period. We go in and determine what it is and how the owners could do better by it, whether it's repurposed, traded or developed. We analyze uses to make it more value-added for all the stakeholders. Segment two is, once that information is obtained and a detailed written analysis provided, we're brought in by professional service providers working with the family to decide what will happen. We provide a written analysis, meet with the professionals and stakeholders to try to assess the best fit for them; what do the creators want to see happening to it, and how is it going to be sliced and diced? Generally, the different stakeholders have different aspirations. We meet and come up with a format of what the aspirations are and how we meet the assets with the aspirations.

The third segment is a written plan for future governance of how is this plan going to be implemented and who the decision makers and authority holders of the future are going to be. This is where acrimony in families really manifests itself. Stakeholders don't want to alienate their kids from themselves, so we act as a real help, a resource for the principals. We give our historical and expert professional advice in the context of being a fiduciary.

The fourth phase is something for which we may or may not stay on; this could be repurposing or developing or liquidating. We can provide those services to stakeholders, but that is on a time and materials basis, not on a fixed fee.

GlobeSt.com: How are private investors protecting their investments for their descendants?

Morrell: The biggest thing they can do is provide a coherent and defined course of action so that there isn't dispute about their intentions. Those things need to be articulated and codified, documented so there's no ambiguity or misunderstanding. That's what leads to disputes, which adds to squandering of the value of assets.

GlobeSt.com: Why is your company making a major investment in the senior-housing sector?

Morrell: We have a long-standing history and pedigree in the development of real property. All developers are affected by the consequences of the real estate cycles. There's the up time and the down time, and the timing is always critical. You want to be getting in and buying the land on the upcycle and then liquidating out before the cycle changes.

When you're in a long-term cycle like this one, post-great recession, it's natural to ask, “Are we in the late innings?” If not, we're close to it. The cycle's going to change. Land is becoming very expensive, labor is super expensive and so are materials; that indicates that the cycles are coming to crescendo.

We've refocused our development; we've wound down single-found housing and traditional development, and we're focusing development on senior housing and senior living for the same reason our legacy asset services business exists: it's driven by demographic cycles. There is not enough senior housing built to deal with what is coming.

What we're doing is highly amenitized assisted living. It's being built to have a community where you and I would like to see our parents be—not like old-fashioned rest home, but very accommodating to the residents and the adult children of the residents—it's near where you and I work or live and where we would like to take our parents. There will be sports bars, a highly amenitized restaurant with a liquor license, a nice setting in a nice environment to meet and visit with your family. We have three in the pipeline, and we're under construction on the first.

GlobeSt.com: What else should our readers know about the silver tsunami and real estate?

Morrell: Development will be closer to transportation systems, and we'll see more dense living; less home in the suburbs with the big yard. There's not much demand for this in the future. The big-time estate-properties market is very soft because people don't want to live like that anymore. They want fewer responsibilities with their real estate as they get older.

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