Company: The Freshwater Group Inc.
Time in current role: 2.5 years
Currently reading: “Gone Fishin'” by Walter Mosley
When David Freshwater sold his seniors housing company, the Fountains, in 2005 for $500 million to Sunrise Senior Living, he could have retired at the top of his game. He had spent 18 years building the Fountains into one of the most respected brands, known for its superior designs and savvy business operations.
Instead Freshwater opted to start over. “I still wanted to fulfill my vision to create the best retirement community option out there,” he says.
Most of the profits from the Fountains sale went to majority shareholder and billionaire George B. Kaiser, but Freshwater invested about $6 million of his own money in a new venture — the Freshwater Group. Its primary focus is to purchase and reposition underperforming properties. The Tucson-based firm also develops new projects.
Backed by equity partners, BayNorth Capital Partners of Boston and Freemont Realty Capital of San Francisco, Freshwater is already redeveloping three big continuing care communities and several assisted living projects. A new continuing care project in California and four rental projects are underway.
Last December Freshwater bought back from Sunrise the Tucson office building built for his first company. The purchase was “really symbolic,” he says. “Our goal is to get back to the strength we were when the company was sold.”
Freshwater's strategy is to invest only in properties in which he has some control over management. To keep close tabs on operations, the properties are being managed by Watermark Retirement Communities, a new firm headed by Freshwater's brother-in-law, David Barnes. The team worked together for years at the Fountains.
Freshwater's new properties, branded with the Watermark name, target the upcoming generation of retirees. Freshwater thinks the latest crop of 70-year olds is different from the previous generation. They want a lot of say in how a community operates. They also want activities such as current events forums and robust wellness programs.
For example, a new wellness center is at the heart of the Watermark at 3030 in Fairfield County, Conn., a continuing care property the firm bought 18 months ago. The wellness center features an Aveda spa and salon, indoor pools, Pilates studio and auditorium. The center will offer memberships to area seniors so that potential residents can get familiar with the property.
Freshwater is also opening a series of home health agencies for seniors who live near his buildings. “We are introducing ourselves to customers before they move in,” he says.
He has also adopted the groundbreaking ideas of Dr. Bill Thomas, a pioneer in nursing home reform. Thomas developed the Green House model, small-scale homelike residential buildings with only about 10 residents.
Freshwater is the first for-profit developer to try the idea. “I am enthralled by the concept,” says Freshwater, who thinks an efficient operation can turn a profit.
Six Green House homes are being built at Via Elegante, Freshwater's continuing care campus in Tucson. Monthly rents will be about $7,000. The houses feature satellite radio and closed circuit Web cameras for remote family visits.
Schooled in architecture, Freshwater takes special interest in building design. In big facilities, assisted and nursing rooms are arranged in small clusters in order to avoid an institutional feel.
“David is one of the great seniors housing developers and operators,” says David Schless, president of the American Seniors Housing Association. “He creates very lovely buildings and he is genuinely passionate about this business.”