More Than One Way to Find Value 199Company Background
Sunrise Senior Living offers senior living care services including
assisted living, independent living, and specialized living services.
At the end of 2002, SRZ owned or operated over 200 living centers
in the United States, Canada, and the United Kingdom. Sunrise was
founded in 1981 by the husband - and - wife team of Paul and Theresa
Klaassen. Together they owned more than 10 percent of company.
They both lived in the fi rst community they opened in 1981.
Unlike its competitors, Sunrise ’ s properties didn ’ t take the form
of traditional assisted living communities. My visit to the Atlanta
property confi rmed what the company was saying in the annual
report. Rather, their communities look like Victorian houses, high -
rises, and elegant mansions. In addition, the landscaping support-
ing the properties was immaculate. Management ’ s pride in the
uniqueness of the properties was evident in the attention and detail
that went into each property development.
As I began to perform the research and analysis on Sunrise,
some important facts came to light:- Sunrise tended to cluster its facilities in the top 20 largest
metropolitan areas in the country with 6 to 25 properties per
cluster. This makes it more efficient to manage, staff, and
grow the entire area. Sunrise has been selling or closing stray
properties outside these clusters. - Since 1998, development of new assisted living facilities
dropped off dramatically due to the poor health and over-
extended financials of most players. During this dismal time,
Sunrise was growing at a steady clip and was adding 20 com-
munities in 2002 and more in 2003. - Assisted living costs were approximately $ 90 to $ 150 per day.
The economics of assisted living expenses at the time were such
that over 99 percent was private pay and not reliant on insur-
ance. And payments typically were made by family members,
usually a child of the assisted living resident. This compared
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