The SHB Interview: Dwayne Clark, Founder and CEO, Áegis Living

Eclectic owner-operator tries to bring fresh eyes to senior living.

By Jeff Shaw

At first, Dwayne Clark wasn’t particularly interested in seniors housing. Of course, this was in the mid-1980s “before assisted living was assisted living,” as he put it. But with some encouragement from his sister, he joined West Coast senior living trailblazer Leisure Care.

After a stint with another industry giant, Sunrise Senior Living, Clark decided he wanted to start his own company and launched Áegis Living in 1996.

In the years since, Áegis has grown from a single community in California to 32 across the West Coast, with nine more in various stages of development, totaling 3,225 units. The company offers assisted living and memory care services exclusively.

The company made a splash in January when it made the first big acquisition of the year by purchasing 10 of the communities it managed from Healthpeak Properties for $350 million. Áegis now holds an ownership stake in 70 percent of the properties it operates, and the deal was part of the company’s plan to double in size by 2030.

Seniors Housing Business spoke with Clark about his journey into senior living, how his company differs from others in the industry and how he keeps residents and employees happy.

Seniors Housing Business: Walk us through your career history that led to you founding Áegis.

Dwayne Clark: I started investigating seniors housing in 1985 when my sister was the regional director of aging services for the State of Montana. She was also on an advisory board for Leisure Care. 

I was working in the criminal justice system and I was sick of it. I thought I wanted to be a criminal defense attorney; that’s why I did it. My sister said, “You should go work in the aging field.” I thought, “Are you kidding me? I know about murderers and bank robbers. I don’t know about old people.” She said that I’d really enjoy it.

There was this new government study that was released, so she told me to go down to the library and read “The Graying of America” by Ken Dychtwald. It fell on me like an anvil. The world is going to be filled with white hair in the near future, and there will be all kinds of businesses that revolve around the elderly.

She got me an interview with Leisure Care. I was really motivated to change careers, but I knew that Leisure Care was giving me this obligatory interview because of my sister. I had to do something to get my foot in the door. 

So I spent 30 days doing a competitive analysis, looking at the company, doing secret shops, looking at how they did calls, and I put together a manual. I came in for the interview, and exactly what I thought would happen happened: “Thanks, we’ll call you.” 

I said, “Can I show you one more thing?” I pulled the manual out of my backpack and said I wanted to talk about the company. All of a sudden I turned into a real candidate. 

I moved from Washington State to Colorado. I was a marketing director for less than 60 days when they put me in the manager-in-training program. About 45 days later, they gave me a struggling property in the portfolio. It had never been above 68 percent occupancy, but I filled it in nine months.

Once I did that, they made me a troubleshooter, sending me to other properties all over their portfolio. After about two years in that role they made me vice president of operations. I worked for them for seven years and I was one of the founding members of ALFA and NIC. [The Assisted Living Federation of America is now known as Argentum and NIC is the National Investment Center for Seniors Housing & Care.] So, as those two organizations took off, I was doing a lot of public speaking at national conferences. 

This is before assisted living was assisted living — it was just retirement housing. I became the assisted living guru at Leisure Care. I would design environments and programs and activities and did a lot of speaking about that.

SHB: What was the next career move?

Clark: In 1993, I went to work for Paul Klaassen at Sunrise Senior Living, moving from Washington State to Washington, D.C. I was promoted to executive vice president of the company and took it through a private placement and then an IPO (initial public offering). 

After the IPO, I suggested to Paul that he let me move back to Seattle and grow the company from Chicago west, where we only had two properties. Within short order I was buying properties and developing in Chicago, Seattle, San Francisco and Los Angeles. In a couple years, we had 30 properties on the West Coast and a bunch in the pipeline.

SHB: How did you come to launch your own company?

Clark: In 1996, I looked for a partner to launch something on my own. I had a development plan, and I knew the markets I wanted to be in.

I had three people interested in being my partner. One was a group of doctors in Canada, one was a railroad tycoon in Colorado, and one was a developer in Santa Rosa named Bill Gallaher. He had built seniors housing already and had a ready-made construction division. The thought was that I can tell him how to design it, he’ll do the construction, and we’ll come up with this model together.

We launched the company in the summer of 1997, and we went out and raised three rounds of capital for a total of $22.5 million. At the end, after the third tranche, which was around month 18, we ran out of capital. 

We were building and didn’t have money coming in. We opened our first property in 1998 in Pleasant Hill, California, but we didn’t have any money. I had to use my kid’s college fund because it’s all I had left to tap into. We had every credit card maxed out, every home line of credit, everything you can imagine to get this company launched.

The site wasn’t particularly good, but the ingenuity, the passion and the energy we put into marketing was over the top. The 80 units filled in 184 days. That allowed us to refinance that building and get equity for two new developments.

Bill and I developed quite a few properties together over the next decade. In 2008, we set out on our own path. We executed a leveraged buyout — I gave him some money and eight properties, while I took 29 properties. We set on our own path, brought in our own development people and never looked back.

Today we have 41 properties, 32 of which are open, and another nine on the development shelf. Three will open this year.

SHB: How did you come up with the name Áegis?

Clark: I found Áegis, which is a Greek word meaning to shield or protect. We put an accent over the A so it’s pronounced “Age-is” and reminds people of aging.

SHB: Is it significantly more financially advantageous to own, manage, or own and manage? 

Clark: It is more financially advantageous to own and manage, but the upside is bigger than that. By owning our communities, we’re able to put our residents and our teams squarely at the center of all our effort, innovation and hard work. Áegis is a family-owned company and my goal is to create a real estate legacy portfolio.

Care is a priority

SHB: What has been the impact of COVID-19 on your communities so far?

Clark: COVID impacted everyone, unless you’re living in a cave on a deserted island. What I’m proud of is the level of impact for us, especially considering we were one of the first assisted living communities in the nation to get COVID — a staff member on Feb. 28. 

During the first week in March, we gathered our entire executive team together and said, “This is bad, and everyone’s going to have a specific job. Who’s going to talk to the media? Who will acquire PPE (personal protective equipment)? Who will find technology? Who will talk to the medical community?” I decided to handle research. I learned as much about COVID as anyone could possibly know. I called everyone that would take my phone call — universities, research labs, The Gates Foundation, whatever.

We decided to form our own virus council, featuring people around the world on the front lines that saw how this disease manifests. We picked seven people. Some are on the vaccine front, others are doing institutional modeling, doing research, another is an M.D. in China. We have a psychologist, an emergency room doctor and an Alzheimer’s expert. That council has helped us manage the crisis, telling us what to do and how to do it. 

Our PPE inventory is for over seven months, and we’ve never had less than six months on the shelves. We went big early.

We knew our staff would go through some traumatic experiences. What can we do to help them? We started getting meals for their entire family for free, so they didn’t have to go to the store. We set up a telehealth program to keep people from going to the emergency room. We got hundreds of laptops and gave them to staff so their children could do homeschooling.

You have to have empathy for the people doing this heroic work every day, putting their lives on the line and caring for the most frail among us in our country.

Our census was 93 percent when we went into the pandemic. We’re about 84.5 percent today. So we’ve taken a hit, but everybody else is 80.7 percent, according to the fourth-quarter NIC data.

We have two buildings opening in the next six months, and the pre-leasing rate is the highest in the history of the company. The interest in seniors housing is not gone, it’s delayed. It’s delayed because people don’t want to move into isolation. 

But the vaccination is a game-changer. If seniors housing communities develop herd immunity, it’s going to be the safest place in the world. We can control that bubble.

SHB: Your company has put a particular emphasis on treating employees well. What sort of programs do you have to retain staff, and how does your retention rate compare with the industry average?

Clark: Our annual turnover of line staff is about 50 percent. That sounds high, but most operators’ turnover is north of 100 percent, and some are north of 200 percent. We have one of the most stable workforces in the country.

What you have to understand and what has to happen is you look at your staff as your No. 1 customer. If you don’t please those people, your service delivery is diluted.

We have a private family foundation. During Christmas we inquired about staff members in need, and we gave 27 grants of $2,500 to families. Those little things are so important.

The employees want to have a say in what’s going on with the company. We have $700 million in new growth and development going on today. Employees look at that and say, “What does that mean for me?”

We show them the opportunities for promotion, the training programs to get a job at the next level. We developed a cultural committee, and there’s line staff and care managers serving on that committee. They tell us what they love about the company that they never want to change. They feel empowered by that. That’s important to them.

We also run the Potato Soup Foundation. I was raised in a poor family, and my mom had to steal potatoes because she wouldn’t steal anything of value. We never wanted anybody to be hungry like that. We’ve paid for funerals, medical expenses, counseling — you name it we’ve paid for it. That goes to the root of who we are as a company.

That’s what I didn’t like about working for a public company. It’s impersonal, and we’re in a super personal industry. We hold people’s hands as they take their last breath. We want to convey to our staff that they‘re like family to us. You can’t ask them to be emotionally available and empathetic and not have the company culture be the same way.

SHB: You have mentioned that you like to look outside the seniors housing industry for inspiration on how we can change the industry for the better. What are some examples of ways we can learn from other industries?

Clark: It starts with the people you hire. 

Our president was president of Starbucks North America. Our chief marketing officer is from Nordstrom and our chief people officer was head of human resources at Amazon. They are not the same-old, same-old.

I call this “the weaving of the quilt.” What kind of patches strengthen the quilt? 

People from Four Seasons, Ritz Carlton, Costco. You start to put together world-class thinkers and your product is different, your protocols are different, service expectations are different. We hire very few people from assisted living to be general managers — only three out of our 36. Most come from luxury hotels, or they’re homegrown.

SHB: What are the results of hiring outside the industry?

Clark: We just think differently as a company. If you walk through our corporate office, it looks more like an art gallery than an office. We have a 1910 pickup truck in our lobby, a custom chopper upstairs that is one of the most beautiful motorcycles in the world, and world-class art.

Personal connections

SHB: What else makes Áegis unique as a company?

Clark: We want people to see the soul of our company. We have five docents that are trained to give tours and explain why each piece of art was installed in that spot. 

We also take a page out of modern society trends. About 23 years ago, we were the first to have massage rooms in our buildings. We felt like seniors were not getting enough human touch. We implemented Reiki (a Japanese healing technique) and reflexology so people would be touched more.

Our next building to open has a seaplane inside our dementia unit. Seaplanes have great significance in the Pacific Northwest.

We’ve taken to heart the concept of biophilia, the opportunity of plants to give renewed life and boost the immune system. We’re going to take wellness to a whole new level. We think we can do that through a lot of research. We have some incredible nutritional things we’re going to do. We’re looking at what we can do with sleep, which is the foundation of health. We’re going to lead the way in this industry in terms of true wellness.

SHB: Tell me a bit about your books, movies and charity work.

Clark: I wrote a book about my mom’s struggle with dementia, and we’re working on a Hollywood movie for that. I have been involved in about a dozen documentaries through my film company, True Productions. My latest one to be released was CBD Nation, which focuses on how CBD [cannabidiol, the second most prevalent ingredient in marijuana] is really helping people with chronic illnesses. I’m also working on a movie right now with Michael Bennett [former defensive end with the NFL’s Seattle Seahawks] about race relations in the NFL. That’s in pre-production.

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

Clark: I love to race cars. I have a car collection and I love to do gumball rallies and track racing.

SHB: What’s your favorite car?

Clark: My favorite car is a 1956 Jaguar that won the Pebble Beach Concours d’Elegance in the classic car division.