Business Opportunity: Repositioning of Current Facilities; Expansion Project; Construction Financing
WhiteStone is a not-for-profit, entrance fee Continuing Care Retirement Community with 125 independent living units and 100 licensed beds (88 skilled nursing and 12 dementia care). The community was established in 1912, the oldest Continuing Care Retirement Community in North Carolina, as a Masonic and Eastern Star community located on 42 acres. The property was self-managed by the sponsor until 2006 when the board of directors hired Life Care Services®, An LCS® Company, as the contract manager.
The community was the first Masonic Fraternal Home in the United States created solely for the caring of the elderly. In 2007 the board of directors made several strategic decisions to reposition the community in the marketplace. First, they decided to allow people without fraternal affiliation to enter the community. Second, they decided to reposition the campus by enhancing the apartment offering with larger apartments with expected in-apartment amenities. It was also in 2007 that the community started to realize the full benefits of independent management by Life Care Services.
In addition, the community has a long and productive relationship with both the Masonic and Eastern Star foundations. Each foundation has made annual contributions to the community in support of its charitable mission. The community also receives significant gifts from Masonic lodges and Eastern Star chapters, as well as individuals.
Prior to undertaking the expansion, WhiteStone’s board made the decision to shore up core operations. By doing so, the community’s credit profile improved significantly. With the leadership of LCS, WhiteStone recognized an improvement of nearly $3.4 million in the 5-year period ending December 31, 2010.
In 2007, the corporation began the process for planning a substantial renovation and expansion of the community in order to:
- Modernize apartment amenities for services
- Improve accessibility
- Replace aging buildings and infrastructure
- Increase financial reserves and operating income
- Expand charitable mission
Initial marketing efforts at the community were successful; however, as with many Life Plan Communities and housing-related projects in 2008 and 2009, there were delays primarily from economic conditions beyond the community’s control. The board of directors understood the economic reality of the market, and realized that the plans for community redevelopment and expansion needed to be reconsidered and financing identified.
The goal was to reinvigorate sales by significantly enhancing the marketability of the community through managed repositioning efforts and strategic expansion. The recommendations included a revised scope to the retirement community redevelopment project to create a “new front door” to the community. The intent was to improve the market appeal of the community, and to secure a proposal for financing the senior living redevelopment project. The proposal included:
- Recommendation to invest pre-finance seed capital to fully renovate the Linville Administration building to create a new clubhouse
- Setting stage and vision for remainder of the project
- Funding with seed capital from the Masonic Foundation
- Creation of a fitness center
- Addition of 46 independent living apartments
- Addition of 6 independent living homes
- New multipurpose room
- Second dining venue
- Renovation of existing building and common areas
- To prevent escalation of costs, recommendation to securing construction bids early
The community redevelopment project was completed as planned and on time. Specific outcomes include:
- Fitness center completed in March 2010
- Six independent living houses completed in fall 2010
- The Linville Administration building, the “new front door and clubhouse,” was completed January 2011 with innovative design that included
- new entryway with on-grade access without stairs
- new marketing and administrative suite, library, activity room, resident store and game room
- additional parking, new heating and cooling system, and new roof
- combination of certain apartments
- Awarded “Best in Class” by Long-Term Living Magazine
- The clubhouse renovations added the catalyst to create sales
- The community is 100% sold and has 30 names on its waiting list
- By securing an early construction bid, WhiteStone recognized approximately $6 million in cost savings that was used to reduce debt, add amenities and reduce entrance fees
- Financing was secured with non-rated tax-exempt fixed rate bonds; non-rated tax-exempt variable rate bonds (bank placed); and favorable financing terms
- Resident satisfaction has increased from 67% to 88%
- Total revenue has increased from $8.4 million in 2006 to more than $13.8 million in 2015
New growth and development
WhiteStone is continuing to move forward with its master plan for future growth and success. The community plans to build a new independent living wing, adding 67 independent living apartments, as well as a new assisted living and memory care building, adding 24 assisted living apartments and 12 memory care suites. The existing care and wellness center will also be completely renovated to offer more private rooms and updated facilities. When construction is completed, the expansion will provide residents with a full continuum of care in a comfortable, modern setting. Groundbreaking is scheduled for Fall 2019.
To learn how we can position your community for success, get in touch by using the Contact Us form at the bottom of this page or call 515.875.4500.