Seniors Housing Business

OCT-NOV 2017

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

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www.seniorshousingbusiness.com 27 October-November 2017 n Seniors Housing Business 200+ properties: AL • MC • SNF 805.981.8655 • LTCreit.com " Accessible leadership; straightforward approach; invested in Carespring's success. In our relationship with LTC, we have much more than a capital provider. We have a true partner." C H R I S C H I R U M B O L O , Chief Executive Officer D A V I D E P P E R S , Chief Financial Officer Carespring, Partner since 2012 Acquisition Development Preferred Equity Mezzanine walkable access to restaurants, a grocery store and a pharmacy. "Developers are starting to get creative as to where the industry builds," says Gonzalez. He also notes the importance of understanding the thresh- old of a market when it comes to adding services to the 55-plus communities. "We're seeing people invest- ing in a product that has limited services," he says. "These prod- ucts don't have full services like independent living, but possibly a bistro, a salon or concierge ser- vices — those things that make the community higher-end. You need to be careful on how far you go in that direction and whether enough people are willing to pay for it." Some new luxury senior apart- ments can rent upwards of $4,000 per month. Apartments in this price range typically include high- end finishes and amenities such as large swimming pools, modern fit- ness centers with a variety of pro- gramming, club or game rooms, and sometimes bocce ball courts or separate yoga rooms. Long lease-up period Those schooled on the con- ventional side of the multifamily business often rely on Gerard's research and market knowl- edge before leaping into the age- restricted arena. One of the first things she shares is that lease-up rates are slower for 55-plus com- munities than they are for conven- tional apartments but faster than independent living or assisted living. Independent living typically leases at approximately four to seven units per month. 55-plus apartments lease approximately eight to 12 units per month. Con- ventional apartments can lease up to 20 or more units per month. "It's a slow fill. On the flip side, turnover is much lower," says Gerard. "The industry standard for turnover among stabilized 55-plus apartments (95 percent occupancy) is 20 to 25 percent a year, whereas turnover for a con- ventional apartment is about 50 percent annually." Gerard adds that while the tag- line of "55-plus" is popular short- hand for this product, a 55-year- old moving into one of these communities is a rarity. "The reality is that the 55-plus market is really 55-plus-plus- plus," jokes Gerard. "People in their late 50s for the most part are still working and not living in age- restricted apartments." The rising age of residents in"55- plus" communities — combined with the trend of people being physically stronger and healthier overall as they hit the senior age group — has some wondering if independent living could become obsolete. In that scenario, active- adult communities could eventu- ally lean on home healthcare and other models of services and care to keep their residents with them longer. "I think there will be more hybrids of independent living," says Gerard. "We'll go through the same metamorphosis you see in other settings. You have two choices: You can go to where the services are, or you can have the services brought to you." "The care industry understands the CCRCs without walls and how to expand their business by provid- ing services to people who don't reside within their community," continues Gerard. "I think there's going to be a lot more of that." n

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