Fab Four Portfolio
The Freshwater Group and Watermark became involved in the BayNorth Portfolio (the “Portfolio”) in January 2006 when it purchased a minority interest in the Portfolio from BayNorth Capital.  Simultaneous with the investment, Watermark took over management responsibilities. The BayNorth Portfolio was comprised of five communities in the Northeast including Blue Bell Place, Blue Bell, Pennsylvania; Rexford Place, Lanham, Maryland; Rose Tree Place, Media, Pennsylvania; Rockland Place, Wilmington, Delaware; and East Village Place, East Longmeadow, Massachusetts. In total the Portfolio consists of 334 assisted living apartments and 153 memory care accommodations.

Two community members at Blue Bell Place enjoy a little time at the piano in the lobby.

Upon acquisition, the Portfolio was underperforming and in many cases the individual communities did not have the leadership to be successful. Business operations were deficient in programs and structure to drive results, and healthcare operations lacked the systems and clear-cut procedures needed to improve quality of care, track results, and mitigate risks inherent to this industry.  In some cases, the communities needed investment in their physical plants to improve environmental design and enhance marketability. 

In order for the Portfolio to reach its potential, it was imperative for the entire team to be operating from a clear and cohesive vision.  Watermark provided the vision and the resources to make each community in the Portfolio successful. One of Watermark’s first initiatives was to create a culture of accountability among the associates at each of the five communities.  The results were remarkable. 

While the culture and feel of each community was being transformed so were the systems and structure. In many ways 2006 was a rebuilding year. Some communities experienced changes in key leadership and department head positions.  In all cases, Watermark systems, policies, procedures and standards were implemented to ensure efficiency, to promote quality care and to ensure charges were appropriate for services. Each community soon became profitable and that trend continues to improve as occupancy grows.

Overall the Portfolio has shown a steady increase in net operating income.  Prior to Watermark’s involvement, NOI in 2005 averaged $263,132 per month for the Portfolio. Watermark has increased the NOI by nearly 40% in 2007 through  steady occupancy gains, additional revenue resulting from tiered pricing (which alone accounted for an increase in net revenue of over $40,000 per month) and through ongoing labor and expense controls.

The performance improvement in the Portfolio prompted the majority partner, BayNorth Capital to opt to sell all of the properties in the Portfolio.  Rexford Place was sold on May 31, 2007 at a price nearly double that which was allocated to it by the venture at the portfolio's acquision. The remaining four assets sold to Intercontinental Realty Capital in a transaction that netted a significant profit to BayNorth, Watermark and TFG desipite an already declining real estate market.   Watermark was responsible for increasing the overall value of the Portfolio by nearly $30 million in just over two and a half years of operation.