Clearwater Living is eyeing growth in the Western US following its latest expansion with Hines

This year, Clearwater Living has gained a foothold in Texas, the result of building momentum last year. Now the company is focusing on other markets.

The company announced earlier in May that it now manages a newly acquired former Watermark Retirement community in Houston with Hines as an institutional investor, bringing the total number of communities to 11, three of which are rental properties.

This past year, Clearwater also opened two additional communities in Glendora and Newport Beach, California. And in 2023, the company transitioned and onboarded four communities in Phoenix that it acquired from Liv Communities the year before.

Today, that portfolio has an average occupancy rate of 94%. According to Danielle Morgan, president and COO of Clearwater Living, most of Clearwater’s portfolio isn’t far off that mark, averaging 91.5%.

The company now plans to undertake a combination of acquisitions and development in “strategic markets” in the western half of the US. According to Morgan, the company is set up to handle the level of growth it expects in the coming years.

“We’re not growing for growth’s sake,” Morgan said. “It has to be an opportunity that we feel confident we can be successful in.”

Growing into Texas with Hines has advanced the company’s overall plans.

The community, previously part of Watermark Retirement’s luxury Elan collection, opened in 2022 as Clearwater in the Heights. It has 220 units for independent living, assisted living and memory care residents, with amenities such as fitness rooms with yoga and other wellness classes, an art studio, an outdoor heated pool, a salon with an on-site spa and a golf simulator. to a press release.

Tony Ferrero, CEO of Clearwater Living, said adding the community to the company’s portfolio was “a great opportunity from a value perspective and fit within our growth package.”

“We were able to take advantage of this based on the timing of how we have been growing painstakingly and cautiously so far,” Ferrero said.

The scheme is now managed by Clearwater which operator is prioritizing and expanding independent living.

The layout and amenities of the units in Houston – including full kitchens, washers and dryers and larger floor plans – attract a more independent resident, according to Morgan. Since the acquisition, Clearwater has changed programming to attract more IL residents and encourage them to age in place.

The company has also changed resident rates for the community and has begun to more easily share these numbers with prospective residents at different levels of service, making it easier for consumers to see what they are paying for. This has “helped significantly” with the sale of Clearwater in the Heights, Morgan said.

So far, Morgan noted that the efforts have worked, and residents are moving in and showing interest beyond the typical five-mile radius, even if the price of the community is higher.

“I think the design and upscale feel of this mid-rise community and the overall independent feel is what draws a resident to the Heights,” she said. “We are leveraging our program and lifestyle offerings, and our culinary offerings have been expanded to provide more options and choices.”

He added that the Houston community came together through the company’s previous joint venture relationship with Hines.

Hines has made senior living a big part of his growth plans. The global real estate giant launched a flagship fund in 2022 targeting $1 billion in equity, including senior housing. Hines has a dedicated investment vehicle with Clearwater called Clearwater Living Senior Housing Fund V.

Now that the Houston project has been rebranded and recapitalized, Ferrero said the company will set its sights on the Western U.S., with Houston marking that area’s eastern border.

“Texas was always part of our target for expansion plans,” Ferrero said.

Looking ahead, Clearwater’s plan is to own the building and continue to expand its footprint. The company plans to maintain the Houston property for the long term, with another possible announcement of another expansion in Texas within the next three to six months. Clearwater is also expanding its regional teams in the area to support more growth.

Future growth and active adult

In addition to growing with companies like Hines, Clearwater’s parent company, InSite Realty Advisors, is looking to expand into the active adult space with an affiliated brand alongside Clearwater.

Ferrero noted that he sees active adults as the fourth phase of senior living, along with independent living, assisted living and memory care. And the product type has kept him busy for decades.

“I have always seen it as a way to provide an alternative lifestyle, where I can continue to live in my own home and thus have a more social and active lifestyle,” he said. “It was built for the higher quality and more luxurious type of community that we typically offer. It is the same cohort for our independent assisted living and memory support, just 10 years younger.”

Clearwater also continues to develop senior living communities, although Ferrero noted that challenges in the capital markets make it difficult to develop these plans.

Clearwater is currently developing a community in Windsor, California, which will add adjacent active adult units to an assisted living and memory care community. That project will break ground in 2025. In addition, Clearwater is developing a community in Huntington Beach, California, in partnership with Hines, which is expected to break ground around the same time.

In the meantime, the company is focusing on refining its talent pool as future growth “will be determined by the quality of its people,” Ferrero said. As the company continues to grow, Morgan said the plan is to expand roles at both the community and corporate levels.

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