Colorado Real Estate Journal - July 2, 2014
Ten years ago, real estate veteran John Sevo launched Spectrum Retirement Communities in Denver. Today, Sevo believes Spectrum is the largest locally based player in the independent, assisted-living and memory care business. “We’re not the largest nationally, but I would say we are ranked in the top 20 or 25,” Sevo said. A decade ago, Spectrum started with 500 units when Sevo teamed up with his partner, Jeff Kraus, who already was in the niche. Now, Spectrum manages more than 3,000 units in communities across 11 states, with 1,400 employees. The company had its most successful year in 2013, opening three new senior living facilities, including HighPointe at 6383 E. Girard Place in Denver. They have seven communities under construction, including the Peakview Assisted Living and Memory Care center at 6021 S. Liverpool St. in Centennial, at the southwest corner of Smoky Hill Road and Liverpool, 1.5 miles west of C-470. Peakview, which will open either in December or January, will have 61 assisted-living units and 24 memory care units in a two-story, 71,000-square-foot building on 11.55 acres. Overall, Spectrum maintains a 95 percent occupancy level at its communities – 6 percentage points higher than the national average of 89 percent. “We don’t develop and operate age-restricted communities for those who are 55 years and older,” Sevo said. “If you look at our demographics, the average age for one of our residents is 82,” he said. “We are not for the people in their go-go years,” Sevo said. “We are serving people in their ‘slow-go’ or ‘no-go’ years,” he said. For seniors seeking the kind of care Spectrum offers, they are not required to make hefty down payments, as many competitors require. Rather, Sevo and Kraus decided to offer their independent, assisted- or memory care lifestyle on a month-to-month commitment, emphasizing quality care and high-end amenities. They call it “luxury within reach.” Sevo did not start out in the business. “I was phasing out of SevoMiller, which owned and operated multifamily apartments in Denver and across the country, and saw an opportunity to segue into a similar, yet different, business,” Sevo said. He said the new business “had apartments and rental as its base, but I saw it dealing with a portion of the business that was going to continue to grow.” A decade ago, he said the business he is in today “was not as well-known as it is now. I think there was not a lot of public awareness about it.” One of the things that attracted him to it is there are huge barriers to entry, he said. “This is an operating business that has a real estate component,” Sevo said. “This it not a real estate business.” It would have been much more difficult to start Spectrum on his own, he said. “I was fortunate to meet and start Spectrum with Jeff Kraus, who had been in the business for 15 years and had great rela tionships in the industry and a great deal of knowledge about the industry,” Sevo said. “He also had a base of assets that acted as the foundation for Spectrum,” he said. One thing they don’t do is sell. “We still own every asset we started with,” Sevo said. “Our business model is to build, manage and hold indefinitely,” Sevo said. “We like the real estate aspect of it and we like the business component. We create value and enjoy the ownership. We see no reason to sell.”