Senior housing

Robert Gillette is one of the pioneers of the senior-housing business.

After working in sales for Baxter Laboratories and managing nursing homes, Gillette started renting apartments to older people in 1979. His company, American House, was formed before assisted-living facilities came into vogue.

Gillette's apartments were pioneering because units offered private rooms and baths. Until the 1970s, most senior-housing facilities forced residents to share bathrooms, Gillette says.
Through 2008, when he retired to Florida, Gillette built a portfolio of 27 senior-housing rental communities. Michigan-based Redico, headed by CEO Dale Watchowski, acquired the majority of American House in 2008 and has since expanded into Florida.

Gillette, 75, reflected on his career in a conversation with the Business Observer. Here are some highlights:

Close to home: Gillette says he always stuck to the area he knew well near Detroit. “When I was running the company, I would never do anything further than 45 minutes from my office.” His reasoning: “I knew the market,” he says. “We had no failures.”

Sarasota mulligan: In the mid-1980s, Gillette says he violated his own stay-close-to-home rule by trying to do a deal for a senior-housing project in Sarasota that wasn't successful. He says it's because he couldn't be there to oversee it.

Face time: Gillette made sure his employees saw him frequently and he'd make the rounds regularly in all areas, including the kitchen. “If you see your boss in there it means something,” he says. “The key to this thing is hands-on in the trenches.”

Employee perks: Gillette rewarded employees with tickets to the Detroit Tigers baseball team and vacations at company-owned cottages on Lake Huron, where employees and their families could stay for free.

Big offer: Years ago, an executive with assisted-living giant Sunrise Senior Living called Gillette to ask about buying his company. “We've got a big pot of money and we'd like to spread it around,” he says officials told him. But Gillette says wasn't ready to retire. “What would I do?” he wondered. “It was over in four minutes.”

Apartments only: Gillette started by building and renting apartments to older people because, unlike nursing homes, he didn't want to hassle with government regulators. “I didn't want to be licensed by anybody,” he says.

Recession proof: Gillette says American House never felt the economic downturns because it provided affordable senior housing to retired autoworkers with pensions. “We gave real value,” Gillette says.

Do your best: Take the best care of people you can first and profits will follow, Gillette says.

Social networking: Gillette says he got friends and neighbors in Bloomfield Hills, Mich., to invest in each senior-housing project. Many of his investors were retired executives from the automakers. “They all had surplus cash,” Gillette says. “The common thread was clubs and social networks.”

Overbuilding: Gillette says the current wave of senior-housing developers could swamp the market. “It's a staggering number of [developers] hitting the market at the same time,” he says. “Florida is ground zero for this.” He doesn't doubt the developments will fill with the swelling ranks of baby boomers, but it may take longer than many developers anticipate.