Assisted Living Executive to Senior Living Executive

Growth requires tight control of the numbers, and the ability to exert that control comes directly from the founder’s personal experience.

“Most of my adult life, I was in the
general contracting field. I started out as
an architectural designer of hotels and
motels, and I evolved into the contract-
ing field because I couldn’t get people to
build what I wanted built at the price I
wanted,” says MacDonald.

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a balancing act of cost and function. A multidisciplinary team considers ways to contain expenses without sacrificing long-term functional objectives. (In this case that team includes architectural firm LPAS of Sacramento and Sundt Construction, also of Sacramento.)

What does this mean in practical
terms? “It means our team of architects
and engineers and contractors is willing
to take every component of the build-
ing and break it down and evaluate it,”
MacDonald says. “If we use steel gird-
ers here versus gluelam beams, which is
the most cost effective? Then you look at
roofing, you look at insulation, you look
at lighting and lighting fixtures. Every-
thing is evaluated.”
MacDonald also keeps the sails trim
by giving his general contractor finan-
cial incentives. If that contractor can find
a place to save money, and if the other
team members agree, the contractor gets
a share of that savings. There’s also a bo-
nus for early completion.

“When the contractor is on the team with you, he is not there to nickel and dime you to death. That’s what usually drives you over your costs on a project like this,” MacDonald says.

Overall, MacDonald said, the value engineering approach saves Carlton 15 to 17 percent off the typical cost of a new construction.

This kind of analysis may generate
lower costs, but it also can slow down
the pace of expansion. That’s a trade-off
MacDonald says he has the freedom to
make. “Being a privately held company,
we have the luxury of being masters of
our own destiny,” he says. “Public com-
panies really don’t have that option.”
While the firm is willing to build at
a measured pace, it also is seeking out
opportunities for acquisition. Here, too,
there is no great hurry.

“We are not interested in buying a portfolio of 10 properties and trying to absorb that. We want to carefully select our sites, to find the acquisitions that are going to fit our portfolio,” Badoud says. “We want to grow steadily and consistently.” ❏