United We Stand
Owner-operator United Group of Companies finds success using its diverse real estate background and targeting middle-class seniors.
By Jeff Shaw
When real estate developer United Group entered the seniors housing sector in the late 1990s, it sensed a huge opportunity in the market: rental active adult properties for middle-income seniors were considerably underbuilt.
United Group was founded in 1972 by Walter Uccellini in the small Upstate New York city of Troy. (The city’s population is estimated by the U.S. Census Bureau to be 50,000.) His son Michael joined the company in 1991 before working his way up the ranks, eventually taking the reins from his father and becoming CEO in 2005. Although the company started by buying and renovating single-family homes, Walter soon saw opportunity in a variety of real estate types.
Over its history the company has developed or acquired over $3 billion in real estate, including over 20,000 multifamily units, 5,000 student housing beds, 2 million square feet of commercial properties and 3,000 seniors housing units (including active adult). The company has about $250 million of additional active adult and independent living properties under development totaling approximately 800 units.
The name “United Group” comes from the unity of the many business lines: development, finance, brokerage, marketing, human resources, construction, ownership and management.
Although the company built its first affordable seniors housing property in the 1970s, it was the late 1990s and into the early 2000s that the company refined its focus to market-rate active adult living.
“We saw a void in the middle-income market,” says Michael Uccellini. “A huge need and no product.”
The company has a robust third-party management division, which accounts for 30 percent of its portfolio. Owners are largely REITs and private equity firms. The company still focuses on “choice-based” seniors housing: active adult and what it calls “independent living lite.”
The average monthly rent at a United Group active adult community today is $2,163, and $2,800 at an independent living lite community.
A United Group active adult community totals 140 to 185 units, with large clubhouses up to 10,000 square feet and no on-site dining offered. Independent living lite properties are 160 to 250 units, with even larger clubhouses up to 15,000 square feet to accommodate a full commercial kitchen with a dining room and pub.
Although United Group operates all its owned properties, a third-party specialist handles food service.
“We don’t make our seniors pay for meals with their rent; it’s a la carte,” says Uccellini. “They can participate in any type of meal program they want — no meals, two meals or 21 meals a week.”
Growing with a purpose
Third-party operator contracts have been a key to United Group’s growth. The company has its own proprietary internal analysis it conducts when looking at a market. It also has a few third-party select firms that are used for market and feasibility studies. Studies cost the company between $10,000 and $20,000 each.
“We’re getting opportunities from brokers all the time. It’s voluminous,” says Uccellini. “Being in the business as long as we have, we formulated metrics for why we pick a site over another.”
Like many seniors housing companies, United Group seeks a concentration of properties in a single market — at least two to three assets, according to Jeff Arnold, the company’s chief operating officer.
“Once we get three properties, we have a foothold in that market,” says Arnold. “Because of our diversification, we can even start expanding into multifamily and student housing; we can look at acquisitions or development. I see it as a partnership that will take us out there, which then works as a foothold to expand.”
Currently, United Group’s seniors housing communities are more concentrated in Florida and New York, but the company has recently expanded into Massachusetts, Colorado, Maryland and Illinois. The Denver-area properties are the furthest along, with Uccellini hoping that will be the company’s “pivot to grow in the West.”
Although United Group does grow through some acquisitions and third-party management contracts, the leaders much prefer to grow by building. “We’re a ground-up developer at heart,” says Uccellini.
Diversity lends advantage
United Group considers its diverse development background — including office, retail, mixed-use, multifamily, student housing and seniors housing — as a major advantage. Its breadth of knowledge enables the company to adopt best practices from other sectors to better serve its senior residents.
“We’re in different product types in different spaces and we have expertise in each,” says Uccellini. “We have a couple products we’re turning into intergenerational campuses, with multifamily, active adult and seniors housing. We have people in their 30s, 40s and 50s in there, in addition to seniors housing, all on the same campus. As they age, some multifamily residents opt to move into seniors housing.”
Arnold adds that there are many similarities between student and seniors housing.
“They’re both niche markets. It takes unique ways of bringing them to market. I came from a student housing background, so this really set the stage for me.”
Furthermore, since the company doesn’t work exclusively in seniors housing, United Group understands its incoming clientele. The company knows how those residents are used to living, and what lifestyle they’ll expect when they arrive in active adult communities.
“About 70 percent of people that move into active adult come from a home, so you want to deliver as many features as you have in a home,” says Uccellini. “I look at unit sizes, square footage, unit mix and where multifamily trends are going.”
Uccellini recounts an exchange he had with an executive M.B.A. student during a speaking engagement at Rensselaer Polytechnic Institute. The student posed questions about both United Group’s student housing and seniors housing projects.
“I said, ‘You seem to know a lot about our company and projects.’ He answered, ‘I should — my mother lives in your seniors housing and my son lives in your student housing, and you’re doing a great job.”
Operations and labor
As an operator, United Group puts major stock in its Senior Umbrella Network (SUN) lifestyle program, which earned distinction in the National Association of Home Builders’ “Best of 55+ Housing Awards” competition for best lifestyle program in 2016.
The program focuses on seven areas for its senior residents: health and wellness; finance, legal and administrative; education and lifelong learning; fun and recreation; convenience and economies; community and friendship; and safety and security.
In practice, this results in programming such as university classes, technology lessons, wine tastings, cooking classes, off-site outings, nutrition education, fraud protection, safe driving lessons and more.
“Our clubhouses are alive with activity,” says Uccellini. “That’s a major differentiator for us in terms of lifestyle for the seniors.”
On the health and wellness front, United Group partners with home health aides to keep seniors in the “independent living lite” program for as long as possible before making the move to assisted living.
“I’m getting a lot of inquiries on the third-party operations side, and the SUN program allows us to drive revenue,” says Arnold. “That is really our No. 1 sales proposition as a company.”
The award-winning programs are not only on the resident side, though.
In October, United Group’s operations branch, United Plus Property Management, was named Accredited Management Organization of the Year from the Institute of Real Estate Management. The award recognized the company’s work not only in serving residents, but also developing and retaining top labor talent.
The cornerstone of that program is United University, a training program that Arnold launched in 2017.
“It’s a sales and training program that allows us to train our management people in leasing, marketing, selling and managing properties,” says Uccellini. “People are able to get their associate’s degree by taking certain coursework. As a company, we’ve always been big on continuing education and training and professionalism.”
The company boasts an 82.4 percent retention rate for property managers and corporate employees. For comparison, even standard multifamily only retains 68 percent of its workers annually, according to recent research from multifamily software firm RealPage.
“Employee development is a big part of that,” says Arnold. “Once they get here, you have to show them a pathway to self-actualize their career. That’s where things like continuing education come into play.”
The company also pays particular attention to its social media presence — always putting its good works out for the world to see — and keeping up with technology to appeal to a younger workforce.
“When I interview candidates they often say, ‘We were on your social media page and wow what a company you have.’ We take the things we do in the community, then display it out to the public,” says Arnold. “The age of the workforce is getting younger. They’re used to using things like Google Drive, and we try to stay on top of technology as best we can.”
And the employees who stick around for the long term get a special benefit. Those who hit their 20-year anniversary get a paid vacation to the location of their choice. So far 12 employees have hit that mark.
“I love when people hit 20 years here because we send them on a grand trip, like Hawaii or Italy,” says Uccellini. “And we have a lot of people that have hit 20 years.”
As for how the company has maintained its average occupancy of 96 percent in active adult and 92 percent in independent living, the company believes it has found the recipe on how to market to
middle-class seniors.
“In multifamily, people lease online and won’t even see the property until they pick up their keys,” says Uccellini. “With seniors, you’re talking at least four to six touches. They’re making a life-changing decision, selling their homes.”
So how do they do it?
“Hire us and we’ll tell you,” jokes Uccellini. n