Seniors Housing Business

AUG-SEP 2015

Seniors Housing Business is the magazine that helps you navigate the evolution of the seniors housing industry.

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Page 32 of 87 33 August-September 2015 n Seniors Housing Business the shopping center without cross- ing a street or a parking lot. "The foot traffc pattern was designed in a thoughtful way," says Reese. The Segerstrom family already owned the land on which the Azulon project was built. Although Reese and his team started envisioning the project as early as 2008, the fnancial crisis sparked by the housing downturn delayed plans to move ahead. But the crisis also gave them time to survey every 55-plus apart- ment project in Orange County to determine what to include in their project and, more importantly, what to avoid. The team discovered a num- ber of problems with the area's market-rate, age-restricted apart- ments. The interior fnishes were only standard at best with lami- nate counters, fimsy doors and low-grade carpeting. Common areas were drab and ftness spaces were small — almost an after- thought with a few treadmills and stationary bikes in an empty unit. "We wanted to raise the bar," says Reese. MV Partners hired architec- ture frm KTGY Los Angeles to design Azulon at Mesa Verde. The property features Spanish architec- ture, both inside and outside of the units, harken- ing back to early California designs. Archways, stucco and tiles are used throughout. About 40 percent of the property is open space with rambling gardens and a large pool and ftness area. One garden area features a raised fountain with hand-painted tiles. The pool is a focal point. Resi- dents entering the clubhouse can't help but look through a two-story window to view the pool and ft- ness center. "It is a major statement," says Reese. The yoga studio has a "foating" wood foor that provides some give to help cushion older joints. "We wanted this to feel like a resort," he adds. The apartments feature granite countertops, stainless steel appli- ances and wood foors. Project architect Manny Gonzalez of KTGY created an apartment layout that includes a light-flled great room like those found in single-family homes. "Sometimes thinking differently can give the renter something he or she wouldn't have gotten other- wise," says Gonzalez. It's hard to know if the for- mula used at Azulon can work elsewhere. But the spread of market-rate apartments for seniors comes at a time when renting has become more popular for a variety of reasons (see sidebar, page 36). A developer's evolution NorSouth Development, based in Atlanta, develops and owns affordable senior apartment build- ings fnanced by the state-run tax credit program. But the com- pany is gradually adding more market-rate units to its portfolio, with plans to eventually develop some buildings that feature only market-rate units. "We see an opportunity," says Brendan Barr, senior vice president of develop- ment at NorSouth. NorSouth has two apartment brands: HearthSide for projects located in close-in suburbs; and MainStreet for projects located farther out. None of the buildings offer services. Each brand includes a mix of market-rate and afford- able units. The MainStreet properties are large and include multiple build- ings because land costs are lower farther out from the city. The HearthSide communities are typically four-story elevator buildings. Last April, NorSouth opened HearthSide Sugarloaf, its ffth HearthSide community. A sixth building is underway and will open in early 2016. About 15 percent of the units are market-rate apartments in the frst HearthSide project, which opened in 2010. NorSouth's most recent project, HearthSide Sugar- loaf, has 110 units and 30 percent are market-rate apartments. A one-bedroom, market-rate unit at Sugarloaf rents for $1,200 a month; a two-bedroom is $1,600. That rent is about 60 percent higher than the cost of the afford- able units in the building. The affordable units offer stan- dard fnishes, but the market-rate apartments include upscale features such as granite counter- tops, stainless steel appliances and crown molding. "We are compet- ing with traditional market-rate properties," says Barr. "We have to offer equivalent features." NorSouth will continue to develop affordable senior housing. "It's part of our mission," says Barr. But the company also plans to develop a new market-rate apart- ment brand for seniors. He envisions that the market- rate brand will consist of slightly larger communities than Nor- South's existing communities in order to increase operating effciencies. But future buildings developed by NorSouth will not offer ser- vices or meals, emphasizes Barr. "We are staying in the active adult, multifamily area." Afordability with Style Meanwhile, developers and owners of affordable apartments for seniors are upgrading building designs. In 1995, Senior Lifestyle Corp. opened its frst Senior Suites property, an affordable apart- Azulon at Mesa Verde features design details that harken back to early California. The high-end apartment project includes stucco walls, tile foors with hand-painted accents, beamed ceilings, archways, a fountain, pergolas, wrought iron railings, and period street lamps and sconces. Lush landscaping and comfortable outdoor seating complete a style that appeals to older residents who mostly come from single-family homes in the area. Photo credit: Chet Frohlich Photography. Afordable senior housing is "part of our mission," says Brendan Barr, senior vice president of development, NorSouth.

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