- The Washington Times - Monday, December 10, 2001

Paul Klaassen knows that patience is a virtue.
He founded Sunrise Assisted Living with his wife, Terry, back in 1981, promoting ideas toward the care of the elderly that were just a little bit ahead of the times. Nursing homes were still the most recognized option for families looking to care for a older family member, and the idea of assisted living environments had yet to take off.
"The real growth has come in the last five years," says Mr. Klaassen, chairman and CEO of the McLean-based company. "Today, it's a fully recognized alternative for families and seniors."
Mr. Klaassen concedes that Sunrise's growth was "maddeningly slow" in the 1980s. But now, the company has 177 assisted living communities across North America, serving nearly 14,000 residents. It celebrated its 20th anniversary as a company last week, while also announcing a round of funding from Schroder Ventures Life Sciences to expand its program of providing assisted living services to seniors in their own home.
And Sunrise has proved to be relatively resilient during the economic recession. The company met or exceeded its third-quarter estimates for net income and earnings per share, and increased revenue to $108 million, or 20 percent more than a year ago.
"We're very recession resistant in that the demand for our product doesn't go up or down [with the gross national product]," Mr. Klaassen says. He says the recession can have positive effects on business.
"It lowers interest rates, it lowers wage pressures and lowers land and construction costs, which are huge expenditures for us," he says. "I wouldn't ever wish a recession on anyone, but a recession wouldn't cause me to lose any sleep at all."
Analysts are a little more skeptical of Mr. Klaassen's contention that Sunrise is recession-resistant.
"They're not one of the cheapest price points," says Merrill Ross, an analyst with Friedman Billings and Ramsey. "If you're looking for care it's not the cheapest one out there. The question is whether people are price sensitive when it comes to their mom."
Mr. Klaassen acknowledges Sunrise is more pricey than many competitors, but says that assisted living still costs less than nursing homes and home health care.
"It's true that we're not the cheapest one out there, but we spend more," he says. "We find that family members are not making the assisted living decision like its buying gasoline."
Analysts say Sunrise is one of the most well-run companies they cover.
"Sunrise is noted for having established a standard of care that's considered unparalleled," Ms. Ross says. "It's very high-touch and people oriented."
Investors have stayed with Sunrise, even after the events of September 11. It's stock price has remained steady and even rose to a one-month high last week. It closed Friday at $28.79 on the New York Stock Exchange.
Sunrise's partnership with Schroder Ventures Life Sciences means an expansion of the company's "At Home" program, which provides care for seniors in their own homes. The pilot program for At Home began last year in the District of Columbia; this latest round of funding in the amount of $5 million will lead to an expansion into Philadelphia, Boston, northern New Jersey and Long Island, N.Y. Mr. Klaassen says Sunrise has long-term plans to expand the At Home program to all of the 25 markets where the company now has assisted-living communities.

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