Former Merrill Leader Pettit and Son Launch Firm Focused on Active Adult, Senior Living Opportunities

Bill Pettit, a senior living veteran, is branching out with his son to found a new senior housing consulting and investment firm known as Black Dog Capital Advisors.

Pettit believes that senior living opportunities are more plentiful than ever, with “more money and profitable returns to capital in the next 5 to 10 years than we’ve seen to-date.”

Pettit served as president of RD Merrill Co. for over three decades, brought on by the family owners of the business. Pettit led the effort to expand Merrill from its roots in the timber industry into the nascent senior living sector through the formation of Merrill Gardens. Today, Cole Wright leads RD Merrill as chairman, representing the fifth generation of the family-owned company.

Merrill Gardens has grown to become one of the largest national senior living providers, with more than 70 properties — including communities in the Truewood by Merrill brand, which is breaking ground in the middle market.

Billy Pettit was the founding president of Pillar Properties, a mixed-use multifamily developer, owner and operator. The company is the developer for Merrill Gardens communities.

Now the Pettits are on their own journey bringing nearly half-a-century of senior living experience in tow. Black Dog’s focus will be on consultation regarding distressed communities coming out of the Covid-19 pandemic, aimed at value recovery.

“We’re going to do some consulting both with owners or with operators,” Pettit said. “They want a fresh set of eyes and ideas to really apply to make sure they recover maximum value in the shortest period of time.”

The second focus, Pettit said, sets sights on the active adult space, warming up higher-acuity care companies to the idea of age-restricted communities, while also opening new markets for one of the industry’s fastest growing offerings.

“What we’re going to do is focus on buying value-add assets in the senior space and redirecting them into the mainstream and then active acquisition of active adult properties that can take advantage of accessing a much broader demand base for seniors,” Pettit said.

At the moment, a major focus for Black Dog will be to complete its fundraising and focus on capital deployment into value-add assets, while picking attractive active adult sites for development in 2024 and 2025.

“That’s where the concentration will be in 2023,” Pettit said.

With forecasted impending demographic shifts comes strong optimism in the senior living space, which is shared by Pettit.

However, serving the coming generation will require the senior living industry to adapt to the baby boomers entering the marketplace, Pettit said, to provide more opportunities for choices in aging and unbundling packages of services with more investment in technology.

With focus on the more independent side of the coin, Pettit said the opportunities within senior living are and will remain plentiful as higher acuity care providers grapple with staffing, wage inflation and margin compression. But to get there, the road could be bumpy, he said.

“We’re going to have to suffer through this period of 24 to 36 months where new supply is going to be restricted because of inflation, interest rates and construction costs,” Pettit cautioned.

Along that bumpy road will be acquisition opportunities for Black Dog born of financing pressures from the pandemic along with finding active adult upside to refine the sector.

The year ahead in 2023 is going to be a year of delivery of strategic and operational consulting projects that help operators “narrow the focus” of the next five years to help owners and operators find efficiencies while rebuilding margins, Pettit said.

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