They formed Shelbourne in April 2009, when the nation was still fully in the grip of the economic downturn that forced many senior-housing developers to retrench.
"When I left my former employer, Sunrise Senior Living, we knew instinctively that the demographics were still very strong for the industry. We knew that for the next 30 years ... the demographics were going to be growing as the baby boomers aged and 55-year-olds became 85," McElwee said.
His industry connections allowed Shelbourne and its 50-50 partner, Formation Development Group in Alpharetta, Ga., to move fast, taking over sites that had been at least partially approved for assisted-living facilities to be built by Sunrise or others, but abandoned during or after the financial crisis.
That speed has made Shelbourne perhaps the busiest assisted-living developer in the country.
"I cannot name another company that has more under construction right now," said Steven M. Monroe, who follows the industry closely as editor of the trade newsletters SeniorCare Investor and Senior Care Acquisition Report in Norwalk, Conn.
"What we’ve seen is that most of the regional and national players are doing one at a time," McElwee said.
Mount-Laurel-based Brandywine Senior Living, for example, has its 25th assisted-living facility under construction in Voorhees.
ACTS Retirement-Life Communities Inc., a major operator of continuing-care retirement communities based in West Point, Montgomery County, is planning the addition of an aggregate of 96 assisted-living units at three area communities.
ACTS and Shelbourne are not direct competitors because retirees have to be able to live independently when they enter ACTS communities, but the same population trend is driving the expansion.
In addition to its North Wales efforts, Shelbourne has two other sites under way in the Philadelphia area. A Willistown Township, Chester County, project is expected to break ground next month. Groundbreaking for a Doylestown facility is anticipated early next year.
Outside Pennsylvania, the partnership is building facilities in Olney, Md.; Germantown, Tenn.; Houston, Texas, and Roseland, N.J.
The total value of the six projects already under construction is $150 million. Close to $30 million of that is equity from investors; the remainder is borrowed.
The main investor in the first six projects is Aureus Group L.L.C. in Dallas, Texas.
Walter Sprunt, senior vice president at Aureus, said he was impressed with the development teams at Shelbourne and Formation. Plus, they had something rare: "financial relationships that could enable them to get the projects going."
That may be unique, Sprunt said, noting, "I’m not aware of anybody else."
Shelbourne has a different investor for the Willistown site, but is looking for more.
The returns on equity are expected to be substantial, said Kane: "You’re talking north of 20 percent."
Contact Harold Brubaker at 215-854-4651 or firstname.lastname@example.org.