After Lisa Shedlebower’s rent kept rising and she struggled to pay bills on a fixed income, she found herself homeless for five years in the San Clemente area.
Then about 18 months ago, a nonprofit called Friendship Shelter found her a place to live in an apartment complex about two blocks from the beach in the city.
“I’m very grateful to the Friendship Shelter—they saved my life,” Shedlebower told the Business Journal.
“I have severe medical issues. I’m grateful to be here because I have the support of everyone. I know I’m safe here.”
What’s been little known is that Sheldebower’s apartment complex was purchased in 2019 by Irvine-based medtech Masimo Corp., which ranks No. 5 on the Business Journal’s annual list of publicly traded companies with a valuation near $10 billion as of last week (see list, page 18).
Medical device maker Masimo (Nasdaq: MASI) is best known for making products to monitor oxygen levels in patients in hospitals. Masimo is an innovator in the med tech space and has also recently developed the Masimo Opioid Halo, which monitors for signs of an opioid overdose and can alert emergency services when needed. The monitoring device is the first of its kind device to receive FDA approval.
While Masimo is in the middle of a major pivot to start selling medical grade devices to consumers, and in the midst of a court battle against the world’s most valuable publicly traded company, Apple Inc. (see the April 10 print edition of the Business Journal), the Irvine-based firm and its executive team is also interested in looking for a solution for homelessness.
“I’d see homeless people all around me when I was living in Laguna Beach,” Masimo co-founder and Chief Executive Joe Kiani told the Business Journal. “I was so saddened by the way they were living.”
At a meeting of top area CEOs, they discussed potential ways to solve homelessness, he recalled.
“When we started this, I thought maybe we’d be an example for a hundred other companies in Orange County that could do something similar. If we all give a little bit to our community, we all do better.”
Kiani experienced firsthand the benefits of social largesse when he immigrated at age 9 to the U.S. in 1974 with his family from Iran.
“We had no money, we had nothing,” Kiani said in a video. “We lived in the projects for a while.”
In 1989, he started Masimo, which has gone on to become a company with $2 billion in annual sales.
Kiani has remained interested in social issues. Through connections, he met the Friendship Shelter, which was founded in the mid-1980s in Laguna Beach by people who wanted to help the homeless.
Nowadays, Friendship Shelter manages almost 200 units in South Orange County; last year, the shelter moved 122 individuals out of homelessness and into permanent housing.
Tenants are expected to pay about 30% of their income for rent with a voucher paying the remainder.
“Our shelter provides the safety of a room, roof over your head, a place to be safe at night, meals,” Friendship Shelter’s Executive Director Dawn Price said.
“When I met the folks at Masimo, they were looking for a way to get involved,” recalled Price. “We talked about company-owned assets. Often there is real estate in those assets, and why couldn’t a company own an apartment building and make it useful for this purpose?”
In 2019, Masimo agreed, paying about $3.65 million, or about $215,000 per unit, to buy the apartment complex and then let Friendship Shelter use it to house the homeless.
The proposed plan for the Ole Hanson-style apartment complex near the city’s train station initially created controversy in the neighborhood.
Existing tenants told the Orange County Register and other local media outlets that they were being tossed out of their apartments.
Price noted it took some time to convince the neighbors that it would be worthwhile.
“There was quite an uproar in the neighborhood,” Price recalled. “Usually, the best way to answer their concerns is to be a good neighbor and show that you’re not creating a bad community. When there were problems, we fixed them.”
Seventeen people now live in the Masimo-owned complex.
“Everyone living here was homeless and on the street in south Orange County,” Price said. “People who have been homeless and living in their cars value their homes in ways you and I cannot imagine. They really want to hang onto that.”
The Friendship Shelter is hosting a fundraising luncheon honoring Kiani on June 6th.
“This is the first [time] where a corporation has invested in a building and make it available for this use,” Price said. “It’s a really unique partnership. It’s been successful in helping us scale this program.”
Better Than Parties
When asked if any shareholders had objected to Masimo buying a building for a purpose other than the medical device business, Kiani said no.
“When we threw a party for our 25th anniversary, no one questioned” the expense, Kiani recalled.
“Instead of a 30th anniversary party, we decided to buy a building for the homeless. The team was excited. Who doesn’t want to be part of a company that is trying to solve social problems?
“We’re coming up to our 35th anniversary,” Kiani said. “We’re thinking of doing it again.”
Watch the full Friendship Shelter video here.