From constructing ammunition factories during WWII to helping invent the CCRC model, The Weitz Company has a rich history predating the Civil War
By Jeff Shaw
To the casual observer, The Weitz Company might simply be a large general contractor. But a deeper look shows roots that go back more than 160 years and that it founded one of the seniors housing industry’s most iconic names.
Weitz is headquartered in Des Moines, Iowa — where the company has been a fixture since its founding in 1855, predating the Civil War. During World War II, Weitz built ammunition factories to support the war effort.
“We are the oldest operating contractor west of the Mississippi, at 161 years old,” says a proud Chris Harrison, executive vice president and general manager for the Senior Living National Group of Weitz. “It’s a very, very old company.”
The Weitz family owned the company for 140 years before it became employee-owned in 1995. Netherlands-based Orascom Construction Ltd. bought the company in 2012, but kept all existing Weitz leaders in place.
Weitz is the 65th largest contractor in the United States by revenue, according to the 2016 Top 400 Contractors list compiled by “Engineering News-Record.”
Harrison, who has been with the company for 29 years and never worked for another firm in his professional career, estimates 25 to 30 percent of the company’s work is in seniors housing (approximately $300 million of about $1 billion of 2016 revenue).
Over the company’s history, Weitz has built over $3 billion of seniors housing projects, says Harrison, who adds that figure would be much higher if inflation were taken into account. In sum, Weitz has built over 300 senior living projects totaling more than 31,000 units since 1962.
Revolutionizing senior living
Weitz’s history in seniors housing goes much deeper than simply erecting the buildings. In the 1960s, Dr. Kenneth Berg, a Presbyterian minister in Missouri, was formulating the concept we now know as continuing care retirement communities (CCRCs), with the entire continuum of care available on one site.
Berg contracted with Weitz to build the communities, known at the time as John Knox Village, according to the book “Retirement Communities: An American Original” by Allan Feldt, Kathleen Vakalo, Leon Pastalan and Robert Marans. The original facilities were largely built in the St. Louis metro area.
Fred Weitz, president of The Weitz Company at the time, helped Berg develop the entrance-fee concept to finance these projects. In 1971, Fred Weitz and Berg joined forces to form Christian Home Services to further develop the CCRC concept.
A few years later, Fred bought out the company and renamed it Life Care Services, a household name in seniors housing today and the largest CCRC operator in the United States.
“LCS was a Weitz company for many, many years until it was sold to its employees in 1995,” says Harrison. “We still team with LCS on many of their projects across the country.”
“Fred never really retired. He’s still working,” adds Harrison. “He was a pioneer in building and operating these communities since the ‘60s. Both companies have done very, very well, and it’s all due to him 50 years ago.”
Since the company’s seniors housing roots are based in the CCRC sector, which covers the entire continuum of care, Weitz has expertise in all forms of senior living.
“By building CCRCs, we get experience in every aspect of senior living,” says Len Martling, president and CEO of The Weitz Company. “Since we’re experts in CCRCs, we’re also experts in nursing care, memory care, assisted living and independent living.”
Martling joined Weitz in 1986 when Weitz purchased his company, Al Cohen Construction. He was named president and CEO in 2010.
Ground-up CCRC projects dwindle
When the ripple effects of the Great Recession caused difficulty in attracting new customers due to reduced investment portfolios and lower home values, construction of CCRC communities all but halted for a few years, says Harrison. Even so, Martling estimates that 75 percent of Weitz’s seniors housing construction is still in the CCRC sector.
Additionally, Weitz’s work has shifted away from full, ground-up development to expansions of existing communities.
“Most of the projects we are building today are one component of a CCRC — they involve adding a tower of independent living, or a wing of memory care, or a new clubhouse with more amenities,” says Harrison. “We’re building pieces. There are not as many large, ground-up CCRCs being built.”
Building an expansion brings complications, however. Residents already live onsite, so the construction takes place next to their homes.
“When you’re working adjacent to an operating community, there’s a lot to consider,” says Martling. “There’s the noise aspect, for one thing. We bring expertise to minimize intrusion and ensure the safety of residents.”
With all the noise and construction, resident happiness also becomes a concern during an expansion project. To keep residents happy and minimize problems, Weitz often hosts “Coffee with the Contractor” events at the communities. During the events, residents are welcome to come and speak with representatives from Weitz and the project architect.
“It becomes a very fun, informal, interactive session with our staff,” says Harrison. “Our staff really enjoys it because it’s like working with your grandparents. The residents love it because they get to find out what’s going on in their community.”
Beware of rookie contractors
A common refrain heard from developers and investors in seniors housing is that newcomers chasing seniors housing’s relatively high yields can give the industry a bad reputation by making “rookie mistakes.” That irritation extends to contractors as well, say the Weitz executives.
“It doesn’t take too long to realize when a potential customer doesn’t know what they are doing,” says Harrison. “We call them ‘tire kickers.’ Sometimes they figure it out, get the right operator and make it work. Sometimes we ask a few questions and get a deer-in-the-headlights look.”
The frustration extends to contractors just entering the space as well. Inexperienced contractors will often look less expensive on paper, Harrison says, but it’s because they are staffed for less complicated real estate sectors, such as standard multifamily.
“When we build an apartment building, the units are all identical. When we build independent living, every apartment is customized in some respect,” says Harrison. “It takes people from our end to manage that and stay on time. The rookie contractors might not have those people.”
There are many other ways specialized seniors housing experience helps Weitz. For example, the company created a tool called “conceptual costing” that helps deliver more accurate planning, scope, cost and timeline estimates for customers.
“We’re able to assist architecture firms to build the most effective and efficient facilities they can,” says Martling. “There aren’t a lot of contractors that bring that to the table.”
Weitz is also spearheading the first “integrated project delivery” development in senior living via a development called The Seasons at Alexandria in Kentucky, says Harrison.
The concept, which is gaining popularity in other sectors, brings all the stakeholders in a project together earlier in the development process. All project fees go into a common pot, so efficiencies benefit all the stakeholders while delays and cost overruns sting everyone as well.
“We’re all going to win or we’re all going to lose, but we’re all working together,” says Harrison. “It makes the best project for the customer. We put our cards down, lay everything on the table. There’s always a better solution when we put our heads together.”
Weitz attempts to go beyond the “big four” concerns of its customers — safety, quality, schedule and budget — that Harrison calls “the ante to even get into the game.”
The company asks its customers to put themselves in their future residents’ shoes and understand what might be needed beyond the standard requests. Those key points are written out and posted on the wall of the construction trailer as a constant reminder.
Strong work ethic travels well
When asked independently about what they wish everyone knew about Weitz as a company, both Harrison and Martling provided the same answer: the company’s Midwestern work ethic, signified by loyalty, hard work and dedication. Perhaps that’s natural when a company keeps its headquarters in the same small, Midwestern city for over 160 years.
“For the longest time we were under the radar,” says Martling. “We’re one of the larger contractors in the country, but people were not aware of our size. We tend not to blow our own horn, but we take great pride in the work we do.”
The company’s excellent employee retention shows that Weitz hires people who fit the mold of this work ethic, says Harrison.
“A lot of people here have been here a long, long time. It’s the only place I’ve ever worked,” reiterates Harrison. “A lot of people leave thinking the grass might be greener elsewhere, and then a year or two later come back.”
Harrison wishes more people knew about the national scope of the company’s reach. Weitz has offices in Arizona, Colorado, Kansas, Nebraska, Minnesota, Texas and three each in Florida and Iowa. The company can build anywhere in the country, Harrison notes.
“We will work in every state. Many people don’t think of us as a national company and we’re trying to change that,” says Harrison. “We’re tying to not be in a fixed geographic location.”
When asked what surprises customers the most about Weitz when they find out, Harrison refers back to the company’s age.
“We survived both world wars, the Great Depression, the recent recession, even the Civil War,” says Harrison. “It really shocks people to hear we’re 161 years old. This company is so resilient.”