Seniors Housing Business

AUG-SEP 2018

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

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30 Seniors Housing Business n August-September 2018 By Jane Adler The assisted living building boom of the 1990s has a lot in common with today's recent wave of new construction. Developers have access to capital, and developers break ground daily, even amid rising concerns about the oversupply of assisted living units. But that's where many of the similarities end. Today's model of assisted living is quite dif- ferent from the one that flourished 25 years ago. The residents are different and so are their adult children, the ones who often make the housing decisions. Healthcare is fast becom- ing a standard offering. Programming is more varied and the buildings themselves have evolved into something more contemporary and user-friendly. The product changes also come amid a tumultuous period for the industry. The stock prices of publicly traded companies are under pressure. Occupancies are falling as new sup- ply outpaces demand. Wages and expenses continue to increase while the average length of stay of residents is declining. What follows are four dramatic changes in assisted living, along with insights into where the sector might be headed next. 1 Residents are older The average age of an assisted living resi- dent is 87, according to Argentum, the assisted living industry association based in Alexan- dria, Virginia. In 2006, the average age was 85, according to a report in the journal The Geron- tologist. (Statistics on the average age of resi- dents in the 1990s are not available.) In short, the age at which seniors move into seniors housing is rising. The advancing age of residents has broad implications for the sector. When Chris Bird first started working in the industry 23 years ago at a property in Memphis, the average age of residents at the independent living building that also offered what was called supportive care was approximately 80 years old. He now works at LCS, a large provider with 40 rental communities, as executive vice presi- dent of the company's rental business. Bird fig- ures the average age of residents in the LCS portfolio is about 84. He expects the average age of LCS residents to hit 86 or 87 in a few years. "People are living longer," says Bird, whose office is at the LCS headquarters in Des Moines, Iowa. New residents are not only older, but they also often arrive with more chronic medical conditions than assisted living residents of the past. "Operators have to morph with the needs of the customer," says Bird. Others agree. The average age of residents has ticked up two to three years in the last five years, according to Ben Burke, president of Chicago-based CA Senior Living, which has 21 buildings that are either open or under construction. Burke, who is based in the firm's Denver office, adds that today's residents are frailer than they were 10 years ago, which is changing the assisted living product. A move to assisted living is more likely now- adays to be driven by a health crisis, accord- ing to Larry Cohen, CEO of Dallas-based Capi- tal Senior Living (NYSE: CSU). The company operates 129 communities, and owns about 64 percent of the units it operates. In Cohen's experience, prospective residents 10 years ago toured assisted living properties with their families, put their homes on the mar- ket for sale, and then moved in months later after their homes were sold. Now, he says, it's not unusual for a new resi- dent to move in the same day the family first contacts the community. The prospective resi- dent may be in the hospital and face an immi- nent discharge. Or some incident, such as a fall, may trigger the need for a fast move. "The move-in time is quick," says Cohen. "We are solving an immediate problem for someone in many cases." Responding to the fact that residents are older and frailer, and to keep residents from moving to another facility, Capital Senior Liv- ing has converted about 1,300 independent liv- ing units to assisted living and memory care units since 2015. The number of the company's residents in independent living has dropped from about 70 percent to 40 percent of its population over the last five years. "We are meeting the needs of our residents," says Cohen, who recently announced that he will retire at the end of the year. Consumers are more educated about assisted living than they were 20 years ago, according to providers. They are familiar with assisted Assisted Living Evolves Along With Its Residents n Operations Residents are older and frailer, and providers are responding with a different kind of product. Here are four dramatic changes. A healthcare navigator coordinates services for residents at LCS properties.

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