During the early 2000s, The Fountains enjoyed continued growth fueled both by new acquisitions, new development and continued improvement in its operations. In late 2004, Paul Klaassen, CEO and Founder of Sunrise, approached Freshwater to inquire if there would an interest in selling what Freshwater’s team and Kaiser’s capital had built. While no one in The Fountains was particularly keen on selling, Klaassen was persistent and ultimately a decision was made to sell substantially all of the assets of the company to Sunrise. By the time of the sale of The Fountains on July 1st, 2005, annual revenues on 4829 units topped nearly $200 million, producing an NOI of over $45 million.
July 1, 2005 was a landmark date for Freshwater and The Fountains team. Nearly all of its 60 corporate staff went to work with Sunrise, leaving Freshwater with only three associates including original team member Barnes. Neither Freshwater nor Barnes were cut out for working with a large, public corporation like Sunrise. Thus began a partnership that became Watermark Retirement Communities and The Freshwater Group.
In this new venture, Freshwater would head up acquisitions and development, which included finding equity to fuel new growth. Barnes became CEO of Watermark and was entrusted with day-to-day operations. Together they were determined to build a team to fulfill their dream of creating unique senior communities in a rapidly shifting market.
The firms began to capitalize on Freshwater’s and Barnes’ 25-year record of asset improvement, and moved forward to reposition and expand existing select communities. At the same time TFG continued to vet new opportunities for development and acquisition, undertaking several notable transactions as the decade closed. By the end of the 2000s, Watermark and its principals owned and/or operated 10 senior living communities. It had partnered with BayNorth Capital, Intercontinental, Fremont Realty Capital and others that had invested over $200 million with Watermark and TFG.