Spokane-based SRM Development LLC has teamed up with Merrill Gardens LLC, of Seattle, to develop a growing number of senior communities in Western Washington and throughout California, says Ryan Leong, SRM development manager.

In the partnership, SRM develops and constructs the facilities and Merrill Gardens operates them. The companies jointly own the senior communities that SRM develops, which usually are valued at $40 million to $60 million and have 100 to 150 living units.

SRM is completing construction of Merrill Gardens at Ballard, in northwest Seattle, Leong says, adding, “Four projects are under construction or development in California.”

SRM and Merrill Gardens currently are involved in 13 joint ventures, he says.

Merrill Gardens at Ballard, for example, is scheduled to open this summer with a mix of 103 studio, one-bedroom, and two-bedroom living units, with monthly rents starting at $2,500, for independent-living residents.

Assisted-living and memory-care services also will be available at additional costs.

Leong says SRM was introduced to Merrill Gardens in the early 2000s through a project in the Queen Anne neighborhood on a hillside north of downtown Seattle.

“We needed an operating partner and met with Merrill Gardens for the first joint venture we had with them,” Leong says. “Then we proceeded to do a few more projects in the Seattle area and then expanded to California.”

SRM works with third-party architects out of Seattle and California to design the projects, Leong says.

“Each project is architecturally unique to the city and municipality it’s in, but the inner workings of the projects are fairly similar,” he says.

SRM doesn’t have active projects in the Spokane area, Leong says.

“It is unconventional that we are doing projects in a lot of places and not really in Spokane,” he says. “But I don’t see us moving out of Spokane. We like it here, and Spokane is a great place to have our headquarters.”

SRM was founded by John Stone, his son Bryan, Jim Rivard, and Dee McGonigle. John Stone has transferred his interests to the partners. 

The company has about 25 people based here, he says

“We’ve got a great workforce and team here locally,” he says.

SRM’s main office is located on the second floor of the Banner Bank building, at 111 N. Post.

“Our corporate team is based in Spokane and travels if needed to respective job sites and jurisdictions,” Leong says. “Our company has a satellite office in Seattle, and members of our construction team are located in the areas in which projects are being built.”

SRM primarily focuses on multifamily and market-rate apartments, although it has been involved in well-known mixed-use and office properties, including the Riverstone development in Coeur d’Alene and the Google engineering campus in Kirkland.

“We like to target and maintain about half of our portfolio in senior housing and the other half in multifamily housing,” he says. “We have a couple of other property types, but that’s not our core focus.”

SRM’s annual revenue has rebounded since the recession, Leong says.

“In terms of dollar volume and development and construction, we’ve seen that whole cycle peak and valley and pick back up again,” he says. “Over the last three or four years, we’re pretty much where our volume of development and construction activity was prerecession.”

In the joint-venture projects with Merrill Gardens, SRM takes the lead on identifying properties to develop, Leong says. “We construct and more or less provide turnkey buildings for Merrill Gardens to take over and operate,” he says.

SRM doesn’t handle day-to-day activities at the facilities. “That’s Merrill Gardens’ expertise,” he says. “We stay involved as an owner but not as a property manager.”

The projects target older seniors who are well past average retirement age.

“They’re not just 55-plus senior apartments for active adults,” he says. “We’re really more focused on seniors whose average age is in the 80s.”

Occupancy rates have remained high, even as new facilities open, he asserts.

“We’re pretty full and there’s really not enough senior housing being built to accommodate the increasing number of seniors,” he says. “More and more people every day are reaching the age in which senior housing is the needed or desired option.”

Modern senior-housing options are gaining in acceptance and desirability, he says.

“There’s a better quality of apartment available,” Leong says. “Twenty or 30 years ago, the style of buildings available may not have been very appealing.”

In newer facilities, skilled nursing feels more residential in nature, he asserts.

While there’s likely demand here for more senior housing, Leong says demand is stronger on the West Coast, specifically in California.

“We’re more focused in areas throughout California, because even though there’s a need here, the population isn’t growing as rapidly here in Spokane,” he says. “On a relative basis, there’s less existing supply in California for the senior population.”

Merrill Gardens owns or co-owns and operates 32 senior-living communities in six states including 13 in Washington and 12 in California. The company sold its minority stake in 38 senior-housing properties in 2013.

In Spokane, Merrill Gardens owns and operates The Academy, a 95-unit independent-living and assisted-living facility at 1216 N. Superior, the former site of Holy Names Academy, which originally was both a girls’ high school and a teachers’ college.