Image Courtesy: OCBJ
After the 2007-08 financial crisis, Nexus Companies PresidentCory Alder—together with CEO Curt Olson—went on the hunt for new building opportunities for the Santa Ana-based real estate developer.
With Orange County’s population aging, they studied hundreds of senior living facilities in coastal towns like Newport Beach and Huntington Beach, where they discovered a surprising fact.
“There was only one building that was less than 40 years old,” Alder recalled. “I couldn’t believe how bad it was. The food was awful, the places smelled poorly.
The buildings “were old and depressing. That was when the light bulb went on.”
That light bulb led to an expansion of the firm’s senior living portfolio, including the recently unveiled $130 million Vivante Newport Center, a luxury retirement 99-unit apartment complex with views of the Pacific Ocean and within walking distance of Newport Beach’s Fashion Island.
Bolstering Nexus’ strategy was a recent agreement with Hoag Memorial Hospital Presbyterian to staff wellness centers within Vivante’s two local senior facilities.
In 2021, Hoag began a program called Hoag at Home, in which physicians visit seniors at their homes. The unit has grown to 210 workers and now has a 9,000-square-foot facility in Irvine.
Vivante approached Hoag about six months ago to keep their residents healthy, said Hoag at Home Executive Director Jeff Hammond.
Hoag now has physician offices and gyms for physical therapy at Vivante’s two facilities in Orange County. It offers on-site doctor visits, physical and occupational therapy, neurological evaluation and assessment of dementia, along with other medical services including clinical trials for cancer screening.
“We can really do pretty much all of primary care here,” Hammond said. “Then residents don’t have an excuse to get treatment. If they do delay, typically things can get worse and you get worse quickly.”
Chief Executive Olson joined Nexus in 1981 and acquired the company in 1984. Alder, who previously developed 1.5 million square feet of industrial and commercial space while at SDC Development, joined Nexus in 2003.
The developer, which has its own in-house general contractor, has built across the product type spectrum, including Anaheim’s 352-room Cambria Hotel & Suites, Irvine’s MacArthur Business Center, and South Coast Metro’s two-building Skyline complex, the tallest residential towers in Orange County at 25 stories, and holding 349 units.
“We’ve built everything except hospitals,” Alder said.
Alder wasn’t initially keen on building facilities for seniors, citing bad experiences he had visiting them as a child.
“A lot of people have this stigma of what senior housing has been,” he said.
After his research on the state of OC retirement homes, Alder changed his mind and aimed to build a complex on a 7-acre property in Costa Mesa that previously housed industrial buildings.
However, securing financing was a challenge in the aftermath of the recession.
“We went to 37 banks and everybody said no because we had never done it before,” Alder recalled.
The reluctance was due to senior homes being an operating business rather than real estate.
“You have oversight of food and transportation and activities and medical care,” he said.
Nexus ultimately secured financing and in 2013 opened the Vivante Newport Mesa, a 296-unit assisted living community on Monrovia Avenue, a few blocks from Hoag’s Newport Beach hospital.
“We became pretty popular pretty quick because we were serving much better food and we had really dynamic activities,” Alder said. “We built a much better building where every unit had a full kitchen. There was an indoor pool with a Jacuzzi, tons of activity.
“The industry started taking notice and we had people coming from all over the world looking at what we were doing.”
Nowadays, the senior housing field is littered with developers from other sectors, Alder said.
Nexus entered an industry with high turnover rates due to relatively low pay and the stress of dealing with residents who may have lost spouses, and who may be in poor health.
The company made it a point to pay higher salaries and better benefits. Its Costa Mesa facility now employs 200 and the Newport facility has another 75, including part-time workers.
“All we were doing was spending more money and taking care of the seniors. Our model was if they’re happy we’ll get what we need on the top line versus the industry which focuses only on expenses and not necessarily on what makes the residents happy,” he said.
Vivante Newport Center opened in November and is now about 30% occupied.
The site was previously home to the former Orange County Museum of Art; Nexus paid about $25 million for the parcel in 2018.
“It’s definitely the most rewarding type of project we’ve ever done,” Alder said (see story, this page).
Nexus is still bullish on the senior living sector, and plans are in the works for a 198-unit project in the Dallas area.
“We actually get to know the people and their families. We make a difference in their lives and that’s pretty cool,” Alder said. “Not everybody can say that.”
Senior Housing Remix
The entrance to Vivante Newport Center looks like a luxury hotel with a French Mediterranean design.
“A lot of people walk in and say this looks like a Montage hotel,” said Cory Alder, president of developer Nexus Companies. “It’s really like a hotel, spa type of living, for seniors and they dig it.”
Alder gave the Business Journal a tour of the new senior living complex that includes an indoor pool, a beauty salon and an art studio with a kiln and pottery wheels.
Of course, it has the requisite shuffleboard, which is next to cabanas with fire pits, a pizza oven, barbecue grills and views of the Pacific Ocean. The facility also has a dog park.
There is a “fun floor” that includes a golf-simulator room, a movie room with two daily showings and a bar where clients can watch television, sing karaoke or play games like bridge.
It has a two-lane bowling alley.
“We were told no 85-year-old bowls,” Alder said. “But all their family (members) do. You sit grandma down here on a couch and let the kids go nuts.”
The entrance has a coffee bar and plenty of chairs and tables for meetings.
“We try to tell the residents’ families, ‘Don’t go toStarbucks or Peets Coffee. Come here to have a cup of coffee and hang out with mom and dad for 15 minutes. Those are the little touches.
“I can see myself 20 years or 30 years from now and this is what I would want,” Alder said. “That’s how we designed it.”
The apartments range from 750 square feet for a one bedroom to a penthouse totaling 2,400 square feet.
Rents range from $15,000 to $22,000 a month and up, which includes meals in the restaurant on the main floor.
While it sounds like a stiff price, Alder noted that many Newport Beach homeowners can rent their homes for higher prices and live at the apartment complex.
Unlike other facilities, renters can cancel after one month’s notice.
“When you’re 85 you need more flexibility, not less flexibility in your life,” Alder said.
Those extra touches—from services to amenities—cost the company about 20% more than typical for a senior home.
“The industry laughed at us and said, ‘why are you spending a lot?’” he recalled.
“It’s a sales pitch for the family to get mom to believe that this is a real alternative. At other facilities, nobody wants to visit. How does that make them feel? Like they’ve been put away in an outdated place.”
—Peter J. Brennan