Senior Living Developer Confluent Plans $500M Pipeline, Sees Wider Recovery in 2025

Confluent Development is expanding its presence in senior living despite persistent headwinds facing new development growth as construction starts remain at historic lows.

The Denver, Colorado-based real estate investment and development firm is gearing up for continued growth with a large pipeline, and recently promoted Matt Derrick to managing director of the firm’s senior living development division.

Since joining in 2016, Derrick has led the development team through the completion of $600 million in senior living projects across 14 projects.

Under Derrick’s leadership, Confluent is now developing a $500 million pipeline for active adult and senior housing projects. The senior living team identified opportunities with lower-acuity projects like IL and active adult.

Amid this year’s tough inflationary climate and tough capital and lending ecosystem, Confluent Development worked with land owners to temporarily postpone land closings on certain sites, while still retaining control of the properties.

Derrick expects those challenges to remain in place for the “rest of 2023 and for at least the first-half of 2024.”
“Sitting on the sidelines is not in our nature, so we are going to be focused on sourcing new, A-plus development sites in great markets. This will put us and our operating partners in a superior position for the anticipated recovery in 2025 and beyond,” Derrick said.

The company has partnered with MorningStar Senior Living and Harbor Retirement Associates (HRA) to handle management of the new communities, having worked with MorningStar on 14 ventures across six states and HRA on nine properties in six states.

“We are currently working with several additional operators in both the senior and active adult spaces and we are excited to share more details on those partnerships and ground breaks in the near future,” Derrick told SHN.

Pipeline remains strong

This year, Confluent marked the opening of MorningStar of Mission Viejo in California, HarborChase of Shaker Heights in Ohio and MorningStar at Observatory Park in Colorado, all projects that were started in 2021.

Even amid the tough climate, Confluent has active projects in the works, including: MorningStar Senior Living at The Canyons, which is under construction and is its first joint venture in Nevada and design and entitlements phase for a Kansas City, Kansas-based project with MorningStar.

With a “robust pipeline of more than $500 million,” Confluent is poised to add to its growing senior living portfolio, Derrick said.

That pipeline includes sites that are “irreplaceable” in high barrier to entry markets, with projects still needing design, entitlements and later construction, something that will take “many years,” he noted, aiming to capitalize on demand for senior living in 2026 and 2027 for the pipeline’s projects to open their doors.

“Our new mantra is: ‘Capital and courage.’ and it is going to take a healthy amount of both to navigate the process,” Derrick said.

With innovation in mind, Confluent Development introduced a “Whole Health Standard” that was implemented at existing communities amid the Covid-19 pandemic, and will guide future development standards as resident safety was considered in greater detail following the pandemic.

That means crafting designs that are sustainable, holistic and incorporates the latest protections for resident health while advancing amenities geared for mental health.

With health of the pipeline top of mind, Derrick said he anticipates the company returning to its aggressive development strategy for the anticipated recovery “in 2025 and beyond.”

But that doesn’t mean the company is resting on its laurels in the meantime waiting for better market conditions.

“We are and will continue to pursue value-add acquisitions to add to our growing portfolio,” Derrick said. “The near term still looks challenging, but we are confident that the industry’s brightest days are right around the corner.”

 

As seen on Senior Housing News