Company morphs from a mortgage banker to a top regional seniors housing operator over 150-year history.
By Jeff Shaw
The essence of Allegro Senior Living could be summed up in two words: “family” and “history.”
Allegro was originally founded in 1875 as a mortgage banking company named after its then-owner, Edward K. Love Realty. After several generations of Love family members and various spin-off companies, Allegro is now a seniors housing owner-operator run by the father-son team of Laurence and Doug Schiffer.
The two Schiffers — CEO and COO, respectively — oversee a portfolio of 17 properties totaling approximately 2,100 units. The properties are largely located in Florida and Georgia, with current expansion plans underway in St. Louis and New Jersey. The company’s specialty is private-pay senior living: independent living, assisted living and memory care.
The company targets high-end residents and maintains strict brand control through a horizontal company layout — there’s only one person between each executive director and the COO.
Seniors Housing Business spoke with Doug Schiffer to discuss the company’s long history, working with his father, and Allegro’s steady growth into new areas.
Seniors Housing Business: Tell us a bit about the founding of Allegro and how/when you became involved.
Doug Schiffer: The company began back in 1875 as Edward K. Love Realty, a mortgage banking company bringing East Coast money to the Midwest.
Fast forward to the mid-1970s. My father got involved with Andy Love, the great grandson of Edward K. My father and he got together and turned it into a real estate company as opposed to mortgage banking, developing all sorts of real estate types including the only type of senior living there was — some early nursing homes.
In 1998, we got involved with Hallmark Senior Housing, about the same it seems like everybody started in seniors housing. With Hallmark, we built our first properties in St. Augustine and Tallahassee, Florida. The St. Augustine location was originally the only one called Allegro.
Back then, properties weren’t named for the company, but with a local flair. The guy running the company at the time was concerned with getting us ahead of our competition — Anastasia Island Assisted Living — in the phone book. Allegro is a good word, meaning “lively,” and it came before Anastasia in the phone book, so that’s how we got Allegro.
I joined the company in 2000. I was at our sister company, Love Funding, for 14 years, the last five of which I was only doing seniors housing. I moved laterally inside our sister companies to Hallmark.
Around the mid-2000s, we decided to combine everything into one name. We had Love Management as the operator, each property had a separate name, and Hallmark Senior Housing was the owner. I really believe you think you work for the company that is your email address, so I needed to get everybody on the same page. We renamed everything Allegro.
SHB: That’s a long history with the Love family.
Schiffer: Andy Love is still part of the company as my father’s partner. The Love name is part of who we are, though Love Funding is no longer part of the company.
SHB: What’s it like working with your father? Does anyone else in the family work there?
Schiffer: Yes, there is another Schiffer in the family, my brother Peter. He basically does the same thing I do but for our hotel company, Love Hotel Company. He’s in the same seat I am for seniors housing.
Working with my father is great. At this point I’m really running the company. He’s the CEO, I’m the COO. We’re a nice yin and yang. He’s a real estate guy; I’m an operations guy. Between the two of us, we have great buildings and great staff.
SHB: Have you always been in the family business?
Schiffer: Yeah, I came out of business school and immediately started at Love Funding in New York. I used to joke with my father that I wouldn’t report to him directly until he was known as Doug’s dad, instead of me being known as his son.
It was hard for him not to remember that I was once a five-year-old. It took a long time, but we both worked hard to keep business at business and home at home. We achieved it, and now it doesn’t matter because wherever we are we’re talking both. We can do both all the time.
Expanding Allegro’s reach
SHB: You’re based in St. Louis, but the bulk of your portfolio is in Florida and Georgia. What’s the strategy behind your geographic spread throughout the Southeast and Midwest? Do you plan to expand geographically?
Schiffer: When you start in senior living, you want to go where the demographics are strong. Florida seemed like a natural.
We were looking for unserved markets. As we grew, we looked at underserved markets. Then we reached a point where we were more than willing to go head to head with competitors.
Now, we’re expanding our reach. We’re building in St. Louis, which is great because it’s our home office.
We entered Georgia because of three assets available for purchase. Next, we want to get people before they retire to Florida, so we’re looking in New York, New Jersey and Connecticut. We are planning a community in New Jersey and are nearly able to start construction.
Our goal in a market is not a one-off property, but to have two or three in a marketplace to create a new hub. That’s really important to us.
SHB: Are you looking to acquire in New Jersey, or just develop?
Schiffer: Development now is our primary focus. There does seem to be a fair amount of trading of assets right now, so we keep our eye open to opportunities.
Where we really bring our image — who we are, our brand — to a marketplace is through construction. How we make an impression on people and how we build our value proposition comes across best with ground-up development.
This is an interesting business because it’s all a value conversation. What are people willing to pay for, and how do you make it palatable to them? We’re charging a fair amount of money. We really view ourselves as a company at the Cadillac level. Because of that, we’re more focused on lifestyle.
SHB: How is the Allegro portfolio split among the continuum?
Schiffer: It’s about half independent living, while the other half is assisted living and memory care.
We try to always do things where we have multiple flavors, where it’s not just an assisted living building. The industry calls it aging in place, but I think of it as increasing acuity in place. When it comes to age, 84 is 84 is 84. You’ll be 84 no matter where you’re moving. The level of care is an acuity requirement, not an age requirement.
We used to have a property with skilled nursing, but that’s not really who we are. We currently have no skilled nursing.
We’re starting to get involved in the active adult market. Active adult to me is what independent living used to be. We don’t have any yet, but we are actively looking for locations and will probably come out with a varying brand that works well with that.
Owning versus operating
SHB: Does Allegro both own and operate its entire portfolio?
Schiffer: We have no lease structures. We’ll sell a portion of our ownership.
The way I describe it is taking the tracks from behind the train and moving them to the front. We build with an investor partner, monetize our investment, and then use that money to build the next community.
We like to keep at least 10 to 15 percent ownership in our properties. We’ve gone as low as 5 percent on an acquisition. We’re always the operator, though.
We like to have some skin in the game, though we occasionally do a deal where we’re purely the manager. We have buildings where we own 50 percent, all the way down to management deals where we own 0 percent.
SHB: So you’re okay taking on the extra risk of ownership?
Schiffer: Most of the investors want us to have skin in the game. That puts us side-by-side, all growing together.
It’s also about money for us. We are a for-profit, and more money is made on the real estate side of things when you monetize down the road than with a 5 percent management fee.
SHB: How fast are you growing, and what’s your growth strategy?
Schiffer: We took on five properties last year, between acquisitions and management agreements. That was a lot for us to bite off.
We don’t necessarily need to slow down, but we recognize that part of what makes Allegro successful is being hands-on and recognizing what’s going on with our residents. I want to make sure we don’t just keep growing and forget to take our time.
Our growth will be sustained. I’d love to see us at 25 properties in the next year or so. I’d be fine with us growing only with what we can build, which is a couple properties a year.
My goal for 2017 was to hit 15 properties and we’re at 17 now. I wanted to build out a corporate structure that made sense, where I could hire great people. We’re at a size where we can breathe easily and have the right properties in the portfolio without feeling like we need to add something just for the management fees.
We restructured the company about two years ago so that I could have a greater understanding of what was going on at each property. The only person between each executive director and me is the director of operations.
We’re a pretty flat organization in that way, as opposed to having a lot of regional directors. I was starting to feel I didn’t know what was going on at every property all the time. That gets unwieldy if you get too many properties.
It’s a family business, and I want all the associates to feel like part of the family. That’s a really important part to our success. We’re not just a corporate structure. We’re people who care about people.
SHB: What makes a property uniquely Allegro?
Schiffer: There are two answers. The first is the physical structure when it’s built by Allegro — there’s that “wow” factor when you walk in. We work hard for our new construction to have that boutique hotel feel.
Even more importantly is that “hello” you get right upfront at the reception desk. You’re here, we welcome you. It’s that culture that oozes forward regardless of what building you walk into.
As we have grown, our properties do not all look the same. It’s not like walking into the fast food joint with the counter on the right. But it is our culture that will continue to make our properties unique.
How do we make people excited and inspired? Our tagline is “inspired senior living.” That means getting up in the morning and having whatever your idea of a good time is.
When you first walk in the door of an Allegro community, we have a list of values. The last one is the most important one: that we find joy in life. There’s no reason to do any of this if you don’t wake up and say, “Let’s have a great day!”
Finding labor solutions
SHB: What do you believe is the biggest challenge currently facing the seniors housing industry?
Schiffer: Those exact people I was just talking about, the employees.
With so many properties now being built, there is a real issue of getting good people and having them stick around. That’s why it’s so important to do what’s right for them, to train them.
It’s not just pay. That’s a major component, but people don’t stay just because they want to be paid more.
It is a struggle. We are struggling to get good, qualified folks who have the right desire and the right attitude. The real issue is what’s happening with personnel, paying them properly, keeping them interested in the job. We can teach them all sorts of skills, but you can’t teach desire and culture. They have to show up wanting to work with seniors. It’s not just a job.
For example, you and I are both in Atlanta and we both have a snow day today. [This interview was conducted over the phone during a snowstorm in Atlanta.] At our three properties in Atlanta I now have to question: Did we get enough staff in? Who showed up today?
These people trudged out in the snow today. They’re not doing that for money. They’re showing up because they care.
SHB: What’s the secret to retaining good employees?
Schiffer: It’s remembering to treat your associates well so they treat the residents well.
Obviously, the pay has to be in line. You can’t underpay folks and hope the culture holds them. The rest is culture.
What’s important is making folks feel like they’re part of a family and that we really care. That comes from training and sending them to leadership training courses.
We also promote from within. Many of our supervisors and management have come from within the company. Sometimes it’s important to have new blood, so we have to balance that. But somebody who’s been with us and living the Allegro life, we respect that and move them up.
A voice for the industry
SHB: You came over from the finance side of the house with Love Funding. How did you make the transition to Allegro, and what are the benefits of your financial background?
Schiffer: Frankly, I almost feel I use a different part of my brain than when I was a mortgage banker. Everything was numbers based, but it was very fill-in-the-blanks.
Where the background really helps is in interactions with our investment team. It helps with debt and equity. I can have a quick conversation with lenders and not get into long conversations.
I’ve forgotten so much about FHA programs that it’s wonderful. I don’t want to relearn it. But so much of what we do is figuring out the right debt load. That helps when looking at the bigger picture, even if it doesn’t help on the operations side.
SHB: You serve on a lot of associations, including the Urban Land Institute (ULI) and American Seniors Housing Association (ASHA). How does that help you at Allegro, and how do you help the industry as a whole by being on those committees/councils?
Schiffer: It helps Allegro because it helps me get the name out. When we were just four or five properties, it let us play above our fighting weight. I was able to know stuff I might not have known if I was out there duking it out by myself. You get to interact with the leaders and thinkers.
That goes both ways. Now that we’ve matured as a company, I get to help out the up-and-comers. Hopefully, I can help the developers who come in and have no knowledge of seniors housing.
SHB: What do you do in your free time?
Schiffer: With the growth we’re doing right now, this has basically been my free time.
I used to joke with my father that he’s never worked a day in his life because to him it’s just been fun. I think a little bit the same way.
In terms of pure fun, I spend a lot of time with family. I have two older kids now. I’m big on travel.
SHB: What’s the nicest place you’ve been to?
Schiffer: Last summer we went to Israel. I found it to be the most culturally interesting. I don’t know that I became more spiritual, but I became more impressed by things that are important in life.
And the history! No matter what you’re on this planet to do, there’s a long history of people well before you.
SHB: What’s something people in the industry would be surprised to learn about you?
Schiffer: I was part of a singing group in college at Tulane University. I was an entertainer, up on stage singing and dancing.
The group was called Tulanians. There were 12 vocalists and 12 musicians. We did shows throughout the year.
The primary reason for the band was as a recruitment tool. We’d go to high schools and do concerts in January. When people were deciding where to go, the Tulanians would show up and say “Come to Tulane!”
I’m kind of the quiet guy. To think of me up on stage usually surprises people.