Wall Street wants to be Grandma's landlord

Wall Street is having a senior moment.

Not the memory-lapse kind. Rather, the kind where big investors go wild over senior housing, pumping billions into buying and expanding companies that house and care for aging Americans.

Nobody's forgotten how the sector was swamped with bankruptcies after the last wave of Wall Street overinvestment, in the late 1990s. Or have they?

"It was irresponsible growth because Wall Street was pushing them to grow," recalls Dan Madsen, president and CEO of Seattle-based and privately held Leisure Care, which runs 40 senior communities. "They were just popping (new projects) out like 7-Elevens."

As before, Pacific Northwest companies are in the thick of the recent investment action. The granddaddy of deals was quietly unveiled right before Christmas when hard-charging hedge fund Fortress Investments agreed to pay an estimated $6 billion for one of the nation's largest operators of senior housing projects, Holiday Retirement of Salem, Ore.

Seattle-based Emeritus did its own big deal last month, teaming with the Blackstone private-equity group to buy 25 assisted-living and Alzheimer's care communities for $190 million. (Holiday Retirement's chairman, Daniel Baty, also runs Emeritus.)

Leisure Care likewise expanded into Las Vegas last summer with $238 million from Starwood Capital and others. Elsewhere in the industry, Sunrise Senior Living agreed this month to sell to Ventas, an owner of nursing homes, for $1.8 billion.

Wall Street investors see a sure-fire real estate and demographics play. No doubt they hope to replicate Fortress' success in the late 2005 IPO of Brookdale Senior Living.

The rush of capital could be a good thing if it creates more well-run, solidly financed projects. But many observers wonder whether the torrent will become a dangerous flood.

"The fear is there... Wall Street is Wall Street," acknowledges Madsen, who says he's turned down pitches to take Leisure Care public.

On the other hand, he says, the industry's major operators are more sophisticated and better run financially than the last time around: "There's not one that I wouldn't have my mother live in."

WSJ spanking not "fair" to Starbucks

The Wall Street Journal's editorial board had a catchy headline for a Jan. 20 piece denouncing Starbucks' decision to stop using milk with artificial growth hormone in some markets -- but it mangled the facts.

In "Udder Madness," The Journal accused the company of buckling to pressure from left-wing activists. Starbucks says it is simply doing what customers have requested -- a free-market concept you'd expect The Journal to understand.

The Journal's factual snafu was in declaring that Starbucks "created the marketing gimmick of 'fair trade' coffee for America's latte drinkers."

That will come as news to the global fair-trade movement, which dates back to the 1940s and frequently criticized Starbucks until the company got on board.

Starbucks is the largest "fair trade" coffee purchaser in North America, though the bulk of its coffee isn't.

The company has its own program to ensure that coffee farmers receive what it considers fair payment for their beans.

Starbucks sent a letter to The Journal's editors pointing out the error, but there was no correction as of Friday afternoon.

— Melissa Allison

This geologist is ready to rock

William Lingley, until recently chief geologist for the state Department of Natural Resources, is quite the quotemeister as geologists go.

"I think the odds of a commercial discovery are good," he told The Seattle Times in late 2005 concerning the prospects for natural-gas drilling in Eastern Washington's Columbia River Basin, "but I also think the odds of your readers getting into a traffic accident tonight are better."

Lingley might want to make sure he looks both ways before crossing the street: As 2006 ended, he left DNR to join British Columbia-based Exxel Energy, where he heads its exploration in that very same Columbia Basin.

Exxel, which favors long-shot projects, has oil and gas leases covering some 325,000 acres of state, federal and private land in the. Big players such as Shell and EnCana also have leased million of acres. Until recent price increases, they'd mostly ignored the Basin -- unsure whether it holds enough gas to justify drilling through more than two miles of basalt and physically fracturing the sandstone.

Lingley, who traveled the world prospecting for Gulf Oil and Chevron before spending 21 years at DNR, is eager to resume what he calls "the most exciting form of geology."

"For me, it's like being a geologist in Wyoming in 1905," he says. "I've got a huge area that's just wide open -- it's an untouched canvas."

— Drew DeSilver

For developer, Gore's film a convenient tool

Al Gore's documentary on global warming may prompt mixed feelings at the Federal Way School Board.

But it's right in tune with one Seattle real-estate developer.

About 80 people gathered Jan. 18 at the Big Picture movie theater in Seattle's Belltown neighborhood for a special showing of "An Inconvenient Truth" organized by condominium builder Mark Schuster. Schuster is promoting his Mosler Lofts project in Belltown as a "green" building, with energy-efficient appliances, nontoxic paint and water-conserving fixtures.

"I do consider myself an environmentalist," says Schuster, a Bellevue native. "A lot of people think that when you're a developer, that's a juxtaposition, but it doesn't have to be."

— Amy Martinez