The SHB Interview: Ben Burke, Managing Partner, Headwaters Group

by Jeff Shaw

Seniors housing veteran launches active adult development firm in the Southwest.

By Jeff Shaw

Ben Burke cut his teeth as an executive at two major seniors housing owner-operators, Spectrum Retirement Communities and Anthology Senior Living, the latter of which is the seniors housing arm of developer CA Ventures. But, as so often happens with individuals who possess an entrepreneurial spirit, he got the itch to run his own company.

At the end of 2021, he left Anthology and launched active adult developer Headwaters Group in early 2022.

“I felt like I’d been in the passenger seat,” says Burke. “This was a great opportunity to be in the driver’s seat.”

It started with an acquisition in January 2023: the 144-unit Lakeside Village in Salt Lake City, which the company is currently renovating. 

Since the acquisition, the company has broken ground, or will break ground by mid-year, on five of its own developments. Four are located in metro Denver and one is in the Phoenix suburb of Scottsdale. The new developments average around 175 units each.

When these developments are complete Headwaters will have a portfolio of 1,009 age-restricted apartments in the Southwest. Rents at the Salt Lake City property are around $1,000 per month, while the new developments will be in the low $2,000s. “Our rents in the developed communities are a slight premium to comparable, newly constructed multifamily,” says Burke.

Seniors Housing Business spoke with Burke about his desire to start his own company and the ins and outs of the quickly growing active adult sector.

Seniors Housing Business: Walk us through your career leading up to forming Headwaters Group.

Ben Burke: I started my career at Archstone Apartments, a REIT in Denver. I next worked for Spectrum Retirement Communities, which was my first foray into seniors housing. I started as an analyst and left as a vice president after five years. Then, over seven years, I was at CA Ventures. I was one of the first employees for the company’s senior living business and helped grow that to a top-50 operator.

(According to the American Seniors Housing Association’s 2023 ranking of the top 50 operators, Spectrum Retirement Communities was the 34th largest operator of seniors housing in the U.S. with 40 communities and 5,968 units. Anthology ranked 43rd, with 35 communities and 4,467 units.)

At the end of 2021, I made the decision to pursue age-restricted apartment buildings, and I decided it was best to pursue it on my own. I started Headwaters Group at the beginning of 2022. At both Spectrum and Anthology, we offered full-service, private-pay independent living, assisted living and memory care in all four time zones.

SHB: What went into the decision?

Burke: It had always been a goal of mine to start a company. I felt like I’d been in the passenger seat of starting companies and seeing them grow. This was a great opportunity to be in the driver’s seat. That was the main desire.

Another big piece of it was that I have a strong belief in age-restricted apartment buildings. But to properly invest in active adult, you really need to be dedicated to it. It’s not full-service senior living, and it’s not apartments. It has its own place in the spectrum of housing. 

I wanted to have really clear, unbiased eyes to what that customer and resident needed, and not have it be clouded by maybe historical methods and practices in either the multifamily world or in the seniors housing world.

We built our team with a collection of folks who have multifamily, seniors housing or hotel backgrounds. This is so that, while people may bring some of those biases to the table, we can balance one another when we’re making business decisions at Headwaters.

SHB: What lessons are you taking from Spectrum and Anthology, and what are you doing differently?

Burke: I love operations. In full-service seniors housing, being aligned with operations is so critical, as there are so many different assumptions and tasks to complete, so many different parties you’re dealing with. To really differentiate yourself you need to be your own operator or have extreme alignment with your existing operator. 

Both Spectrum and Anthology started as operating companies. I firmly believe those are the best ways to invest in full-service seniors housing.

When I delved into active adult, I learned you also need to have a very strong alignment with your managers. But there are some very high-quality managers who come from the multifamily space that have built active adult teams that understand the ability to scale better than you’re able to in full-service seniors housing. 

Full-service seniors housing is hard to scale, and in many cases it’s not appropriate to scale. You want to be the master of your region because you’re dealing with regulators, referral sources — things you can get a lot of value out of at scale in a specific region. 

In multifamily, the managers have learned to scale well and have done it for a long time. They hired folks with senior living acumen and have the ability to execute revenue management, be very efficient with expenses, employ amazing marketing and branding teams, and ensure strong purchasing and insurance oversights. The systems and processes were very mature. 

We were really impressed by the management teams in the multifamily world, to the extent that we said, “We think these teams are going to really excel. We don’t need to duplicate them. We more just want to partner with them, share a vision and a brand and go together.”

We work with Greystar (the largest apartment manager nationally with 798,272 units under management as of 2024, according to the National Multifamily Housing Council.) We’re very happy to work with Greystar and plan to grow our business accordingly. We use Apartment Management Consultants at the property in Salt Lake City. For our development pipeline, Greystar is our manager.

Stay small or grow?

SHB: Currently, Headwaters is a much smaller operation than the last two companies you worked for because it is a fledgling firm. Do you have plans to grow the operation quickly, or would you like to stay at a smaller size for a while?

Burke: Our plan right now is for four to six development starts a year, assuming market conditions are favorable. We’ll make acquisitions opportunistically where we believe there’s value, but also where the property is already cash flowing. That could be another one to four acquisitions a year. All told, we plan to grow between five and 10 properties a year. 

I think our portfolio will stabilize at around 50 to 60 communities over the course of five to 10 years.

SHB: Do you prefer acquisitions or development for your growth?

Burke: Because active adult is a relatively new segment, there’s limited supply. You have a dynamic in the market where there’s large, tangible, growing demand and limited to no supply. We think that creates more opportunity to develop than to acquire today. 

We do love acquisitions, there’s just a limited set of targets to approach. If we see two acquisition opportunities in a month, that’s a big month for us.

SHB: You’re currently active in the Southwest. Will that region continue to be your sole focus, or will Headwaters expand geographically? 

Burke: I’ve done a lot of business in Colorado and Arizona. We live in Colorado. We built this business to cluster in a handful of nearby markets for the foreseeable future. That would be primarily Colorado, loosely defined neighboring states, plus eventual growth in the Western half of the U.S.

SHB: What about different types of housing?

Burke: We are likely to add different subsegments of active adult into our existing markets before chasing into further flung markets.

An example of that would be to start a build-to-rent product that is age-restricted, or build a higher-end or potentially more affordable age-restricted product. 

Currently, we are very much what we’d call upper middle class for our product. We could push toward either end, or we could even build something more like a build-to-rent cottage product.

Build-to-rent is hard to do. We talk a lot about it, but it’s a challenge to make the numbers work. We definitely see customer demand for that product if located well and priced well.

Active adult’s value proposition

SHB: Active adult has been a hot asset class in recent years among investors because it generates higher rents than standard multifamily product and longer lengths of stay than standard seniors housing. What are some of the other pros and cons of the housing type from an insider’s perspective?

Burke: One of the bigger risks in this space is the velocity of lease-up. That more aligns with seniors housing, where you can lease up to five to six units a month versus multifamily where you can lease up to 30 units a month. It just takes longer. 

You can mitigate that risk by constructing a smaller building, but that makes your numbers harder to pencil out. That’s a big challenge — balancing the delivery of this product while mitigating the risk of doing so.

On the positive side, the demand is so tangible. Further, you see that with a properly developed community, the retention is so great. We’re seeing only a 20 percent annual turnover rate in units at our Lakeside Village acquisition in Salt Lake City. Some folks have lived there for 10-plus years, love living there, and aren’t looking to move anytime soon. That creates a great community that people want to stay in.

A potential learning curve for the active adult space is that what we each do is still pretty disparate. Some developers treat active adult more like independent living. Some developers think of it as apartments. Some have this opinion that it needs to be tied to healthcare agencies. Some think it needs to be more resort-like and offer all these bells and whistles, whether that includes meals or extremely robust programming. 

I don’t think anybody’s right or anybody’s wrong, but it’s going to be confusing to the customer when not everyone is on the same page. That creates an opportunity and a challenge. But it’s only going to exacerbate the need to clearly communicate what it is that you do. What makes you different from that customer’s other options? What value do you provide to them?

That is a position in the learning curve that our industry’s going to go through as we figure ourselves out. It’s not as clear to explain as apartments. There are lots of different styles of active adult that the customers are going to need to wade through, which could be a challenge for them.

A new type of customer

SHB: Who are you trying to serve, as far as a resident profile?

Burke: That’s where we spend all of our time: thinking about the customer. The primary customer we’re trying to serve is in their low to mid 70s, generally a single woman who’s moving closer to be with her grandchildren and support her grandchildren from out of the area. That is our “bulge bracket.” If we can get one right, that’s the one we want to serve.

They may be leaving behind friends, activities and daily routines that are providing fulfillment in their lives. We see really great continuity in our communities. We’re able to offer a set of peers for them to commune with while still being able to accomplish their primary goal of helping out with their grandchildren. 

These folks are people who — especially the single ladies, widowed, divorced, never married — may not want to own a home. They’ve owned a home for 40 years. They’re looking for a highly amenitized, carefree lock-and-leave living. 

Our secondary customer is basically the same person but is someone who perhaps lives in the area but no longer wants to deal with homeownership. Their children are now 40 to 50 years old. They’re dealing with maintenance that’s a challenge. They want to stay in a safe, secure environment and stay close to their grandchildren.

Then our smallest customer bracket — but still vitally important — includes couples and single males who are moving for the same reasons. We just see that as a lower percentage of the folks who end up moving into our communities. 

Generally, couples may not see the same value in moving out of a single-family home into active adult. Two people can handle that better than one. They may not place the same value on the social and carefree living aspects.

SHB: What makes a Headwaters Group property stand out?

Burke: Our communities will all be branded as “Aspendale, a 55-plus active adult community.” That’s our brand. That speaks to where we’re located, which is in the Western states, Colorado and Arizona, where there is a preponderance of Aspen groves. 

(Aspens are a group of deciduous tree species endemic to Western North America. They grow in groves with a connected root system that makes each grove a single organism, according to the National Forest Foundation.)

We place importance on thoughtfully designed amenities, especially indoor-outdoor offerings. All of our communities feature huge amounts of natural light, south-facing amenity spaces, lots of indoor-outdoor uses around our clubhouse. It provides a lot of the features that folks always wish they had in their home — fair weather, lots of sunshine. That’s going to be seen through our brand, the activities we offer and through the design of our communities.

SHB: Do you have specific examples of those amenities?

Burke: The most important amenity we offer is a large activity area to commune, whether it’s resident-led or team-member-led events. These are flex spaces that could live as a place to host a happy hour, a speaker, a holiday meal or even a potluck — the ticking heart of the community. We want to provide a very flexible space with an ability to serve food and drink, seating areas to spend time together, adjustable to provide a large setting or intimate setting.

Secondly is a place to stay fit. We offer gyms with classes, areas for physical therapy and occupational therapy, thoughtfully designed equipment and areas to stay healthy.

We’ve seen the generations change. It’s funny, I was just talking to someone who runs a senior center in one of our markets. She’s been there 35 years, and the amenities and offerings at that senior center have dramatically changed. They’ve swung toward healthier living, fitness and wellness — everything from pickleball to sports to walking to activities that help residents stay mentally sharp.

All of our areas will have game rooms, thoughtfully designed to let folks play bridge and mahjong.

This is less of an amenity, but all our communities will have robust calendars of team-led and resident-led activities. We encourage both. We certainly recognize that residents don’t need us to coordinate certain activities. We want to encourage them to take the reins and then ask us to help coordinate the items that are more difficult to organize — bigger or recurring events.

SHB: What’s something people in the industry would be surprised to learn about you?

Burke: People always get a kick out of learning that I generally commute to work via bike when it’s nice outside.

SHB: Are you close to work?

Burke: Why’d you have to ask that? It’s a mile and a half.

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