Take a peek inside the region’s senior housing disruptor

Ask Pat Finley, the founder and chairman of Vitalia Active Living, and Mario Sinicariello, its president, why they launched the fast-expanding chain of age-targeted, active living communities, and you will hear an unexpected answer.

“We felt something was missing,” Finley said, referring to the way housing for senior citizens generally has been positioned. “Retirement is another part of life. What people are after is a carefree lifestyle. We don’t use the terms retirement community or senior housing.”

Instead, the approach is reflected in the name for the communities, as “vitalia” means “full of life,” Sinicariello said. Elements of the philosophy imbue the venture, which includes a focus on light-filled designs and amenity-rich locations, each with a theater, pool and exercise room. There is also a chef-prepared menu available daily from 7 a.m. to 7 p.m.

However, combine those elements with others in a culture of service, and the two saw a chance of becoming a disruptor in the space.

Whatever the underpinning, the results are profound.

Starting with Vitalia’s first community four years ago in Strongsville, the group has grown to 10 locations, with eight open and two under construction. More are in development. Their locations already form a ring around the Cleveland suburbs and extend as far south as Copley, the Akron suburb. There are almost 1,700 units, a portfolio valued at about $500 million.

To get this far, Vitalia has raised through six funds a total of $146 million in equity from a combination of local and international investors. They calculate the communities have a total economic impact of about $400 million annually.

Finley and Sinicariello invested heavily in the venture.

“We made our interest align with those of our investors,” Finley said. In Finley’s case, he sold most of his portfolio of apartment and office buildings and hotels developed in a 38-year real estate development career.

But that wasn’t just the money.

“This is such an entrepreneurial challenge, it had to be the point of sole focus,” Finley said.

Finley and Sinicariello have known each other for decades. Sinicariello had a background in operating nursing homes and senior housing facilities in Connecticut, a path he pursued when a banking client asked him to operate his company. Originally, when Finley was getting started as a developer, Sinicariello was a loan officer at the former National City Bank.

Their backgrounds partially explain how Vitalia has gotten so far, so fast. The major obstacle for such a business is the real estate development side. Assembling sites from 5 to 15 acres requires acquiring multiple parcels, often obtaining a rezoning from the municipality, frequently requiring a referendum campaign. Each location is roughly a two-year endeavor.

However, what distinguishes Vitalia, the two said, is its focus on demographics. The firm employs three dedicated data analysts devoted to vetting prospective sites.

“Often, I will find a site and (the analysts) will tell me it won’t work by the numbers,” Finley said. “We have a culture where the analysts can tell me where I’m wrong. We can’t make a $50 million mistake,” which refers to the estimated investment in each community.

However, Sinicariello said it’s more than simple statistics.

“We put boots on the ground in each location,” Sinicariello said. “For example, the demographics may look right. But a river may bisect the market area, and prospective residents will not view it as their area.” Even so, he said, most residents come from within a five-mile radius of their chosen Vitalia location. That also reflects the preference of people over 50 to stay close to home, where they have friends and know the area.

Design and construction also reflect the philosophy.

“When we interviewed architects, we sought those that would add elements of a home, because that is what we are building. We wanted nothing institutional,” Finley said. “Our goal is to make each location qualify as a dream home.”

Vitalia also strives to diversify its vendors. For example, one architecture firm may design three communities, but the company also has other architecture firms in different communities. Vitalia has also used four different construction firms for its portfolio so far.

“We could not grow at the pace we have if we self-performed on construction,” Finley said. “There are thousands of details in construction that need to be monitored. We’re better off having contractors who have their own group of subcontractors on each project.”

However, he added, “We monitor everything, and closely.” To that end, its Solon “home office,” as the two prefer to refer to their headquarters, employs about 40 people, though most are in the field. Also outsourced is the day-to-day operation of the properties, all through Arrowhead Senior Living, a private company based in St. Charles, Missouri.