Seniors Housing Business

JUL 2018

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

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Page 19 of 40 19 July 2018 n Seniors Housing Business consuming process," says Maag at LeadingAge. He adds that man- aging a senior living organization has become highly competitive and complex, which discourages new entrants. Since 2000, 92 percent of new CCRCs/LPCs have come from existing providers, according to Ziegler. One exception is the $265 million Sinai Residences in Boca Raton, Florida. Sponsored by the Jewish Federation of South Palm Beach County, the property opened in 2016 with 234 indepen- dent living apartments, 48 assisted living units, 60 skilled nursing suites and 24 private memory care units. (Separately, the Federation also owns affordable apartments for seniors.) More typically, existing pro- viders are the ones undergoing expansion. Mather LifeWays is building a new, high-profile project in the upscale area of Tysons Corner in Northern Virginia. Evanston, Illinois-based Mather LifeWays owns and operates communities in Evanston and Wilmette, Illinois, and in Tucson, Arizona. "Mather LifeWays is a little unique among nonprofits in that we pursue life plan communities beyond our primary market," says Mary Leary, CEO and president at Mather LifeWays. The organization has wanted to pursue a project in the Washing- ton, D.C., area for quite some time because of the depth of the mar- ket, says Leary. The Tysons Corner area has a large number of age- and income-qualified households, and residents have a good under- standing of the life care product, explains Leary. She adds that no new commu- nities have opened in the area in the last 10 years, and that other life plan communities in the area have waiting lists. Solid financial returns from its existing communities — combined with the new project in Virginia — will continue to enable Mather LifeWays to expand its outreach program to seniors and fund research at the Mather LifeWays Institute on Aging, notes Leary. At Tysons Corner, Mather Life- Ways has land under contract that is currently occupied by a vacant office building. The location is close to a metro station and a num- ber of retail shops and restaurants. Municipal approvals are still underway, but the marketing cam- paign began in June. The project is scheduled to open in 2022. The community is currently billed as "The Mather," and will consist of 300 apartment homes in two high-rise towers that rise 28 and 17 stories. Two floors will span both towers at the base. This area will include 20 assisted living apartments, 16 memory care units and 42 skilled nursing units. The project will include ground- level retail space, and a park with a number of amenities open to the public. Unit prices are not available yet, but entrance fees will be 90 percent refundable. The community will offer a variety of healthcare and service packages. 3. Expect system affiliations Competition and the complex- ity of the senior living business are making it harder for single- site providers to remain viable (see sidebar). The big wake-up call was the affiliation in 2016 between the and ABHOW. (Mergers in the nonprofit world are called affiliations.) The new entity was named HumanGood, which is based in Glendale, California, and has 18 life plan communities, 63 afford- able communities for seniors, 4,000 employees and 10,000 residents in five states. "The reasons we came together two years ago are more intense today," says John Cochrane, presi- dent and CEO at HumanGood. He cites the fact that nonprofit provid- ers face a lot of competition from the growing number of communi- ties owned and operated by for- profit companies. "Nonprofits have lost their com- petitive edge," says Cochrane. He adds that HumanGood is looking to grow its footprint by affiliating with other healthy nonprofit orga- nizations. "Consolidation will help us regain that advantage," he says. In May, West Des Moines, Iowa- based Lifespace Communities and Addison, Texas-based Senior Quality Lifestyles Corp. signed a nonbinding letter of intent to explore the possibility of affiliat- ing. A merged company would be the fifth largest not-for-profit senior living organization in the country. Acts Retirement-Life Commu- nities has completed seven affili- ations over the last 15 years. The West Point, Pennsylvania-based nonprofit owns and operates 23 CCRCs in nine states, serving 9,700 residents. Recent affiliations demonstrate the Acts strategy, which focuses on finding a partner that fits with its culture, mission and values. "Without that, there is no deal," says Jeff Kaighn, executive vice president and chief administrative officer at Acts. In May 2017, Acts affiliated with Westminster Village, Spanish Fort, Alabama. The community features 250 independent living apart- ments, 30 assisted living units and 60 skilled nursing units. Acts seeks affiliates close to its other properties. Westminster Vil- lage is located about an hour from an Acts community in Pensacola, Florida. In February 2018, Acts affiliated with The Evergreens in Moore- stown, New Jersey. It has 200 inde- pendent living units, 66 assisted living units and 34 skilled nursing beds. The property is located close to Acts' communities in Delaware and Pennsylvania. Both affiliations were with faith- based organizations, which was an important criterion, says Kaighn. As members of the Acts family, the communities are gaining econo- mies of scale. "We can provide significant management expertise, enhanced access to capital and support to enhance their opera- tions and marketing efforts," says Kaighn. Redstone Presbyterian SeniorCare used its entry-fee community in North Huntingdon, Pennsylvania, to test out a rental model. The program was immediately successful, and Redstone is now considering rolling out a larger-scale rental plan. Nonprofits have lost their competitive edge. Consolidation will help us regain that advantage. —John Cochrane, president and CEO, HumanGood

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