9.05.08
AMC Delancey expanding into living quarters for seniors

Philadelphia Business Journal - September 5, 2008
http://philadelphia.bizjournals.com/philadelphia/stories/2008/09/08/story7.html

AMC Delancey Group Inc. has formed a division that will focus solely on developing senior living residential communities, hoping to seize on one aspect of the aging baby boomer market.

The Philadelphia real estate company has so far tackled every real estate category — from apartments to hotels to retail centers to industrial and office properties. It has also more recently been an equity player, investing in property acquisitions and taking a back seat to hands-on managers.

However, the convergence of what Ken Balin, chairman of AMC Delancey called a “perfect storm,” the main factor being the baby boomers that will eventually seek to live in one of these communities, has led to the establishment of Delancey Senior Living. It helped fund one such recently completed community outside of Hershey.

“With what we’ve done in the last 16 years, this is the most exciting,” Balin said about creating the new company.

AMC Delancey had reached a point where it needed to decide whether it wanted to grow its real estate fund to rival other local funds, such as Lubert Adler or BPG Properties Ltd. or shift its focus, said Michael Wachs, who will serve as president and chief operating officer of Delancey Senior Living and AMC Delancey Group. Wachs has been with AMC Delancey since 1996. “Where’s the best place for us to be?” he said. “We knew we did not want to be a money manager.”

The idea of combining its hospitality experience and real estate work to create a whole new division dedicated to senior living became increasingly appealing, Wachs said. For one thing, focusing on a niche area has its benefits and the market — tens of millions of baby boomers — is deep.

“We’re uniquely positioned to be in senior housing and understand the needs of that group,” Balin said, noting that lifestyle is important to that demographic and Delancey Senior Living aims to create and provide a sought-after lifestyle through the communities it constructs.

For the time being, AMC Delancey will concentrate on building up the new division. Delancey Senior Living will raise a separate fund to finance its senior living projects, which it will build and operate. The focus will be ground-up communities within 100 miles of the firm’s Philadelphia offices in the Cast Iron building at 718 Arch Street. This will enable it to see its projects through the local zoning process and monitor progress while a development is under way.

It is already teeing up a project in Reading, and is exploring Montgomery and Bucks counties as well as South Jersey and the Princeton areas. While it expects to be a small company for a while, it has plans to grow and become national.

The prototype Delancey Senior Living community will have 120 to 130 units that are primarily independent living with some assisted living units. Part of the company’s plans is to become a brand of senior living communities that would eventually be recognized for providing a certain type of community, lifestyle and amenities much in the same way a traveler knows what to expect from a Ritz Carlton or Marriott Courtyard. It also has a platform that differs from other companies that build this type of property. There will be no up-front deposit to reserve a unit and instead of signing a contract committing a senior for a year, it will be month to month.

“Once they are here, they will be happy and want to stay,” Balin said.

nkostelni@bizjournals.com | 215-238-5139

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