In the coming years, the number of adults 65 and older will rise dramatically, reaching one fifth of the population by 2040. That will create stepped-up demand for new senior housing from coast to coast. The sector continues to adjust to major challenges as it emerges from the pandemic.
For the moment, the capital markets crunch is placing a damper on the development of new product necessary to meeting that long-term need. During the fourth quarter of 2022, about 35,700 senior housing units were under construction in the major markets tracked by the National Investment Center for Seniors Housing & Care. That amounts to the smallest pipeline under construction since 2015.
Nevertheless, residents are returning. By the end of last year, occupancy had ticked up to 83 percent, a 5.2 percent increase since sliding to its pandemic low in the second quarter of 2021. And as developers and investors work to meet the current and future need, amenities are requiring heightened focus. From landscaped outdoor green spaces to on-site movie theaters, the emphasis across the industry’s newest developments has been high-quality, activity- and wellness-focused amenities.
Within all the physical amenity spaces that are included in many new senior living communities overarching trend is an emphasis on lifestyle and experience. “Today’s consumer, and certainly the consumer of the future, wants connectivity but also independence and optionality. Bingo and book club no longer cut it, and haven’t for quite some time,” noted Matt Coughenour, asset & acquisitions manager of senior housing at KIRCO.
The amenities at KIRCO’s new developments emphasize natural, intentional social interaction. “We feel one of the largest value propositions supporting communal senior living is the social engagement, physical activity and mental stimulation opportunities they provide,” Coughenour said. “We intentionally design a community’s amenities, in conjunction with life enrichment and activity programming, to promote social interaction, mental stimulation, physical activity and overall health and wellness.”
Resort-quality features
In adopting this experience- and wellness-focused strategy, KIRCO takes what Coughenour calls a “resort-style” approach to amenities. These qualities are exemplified by Monark Grove Clarkston, the firm’s recently completed project in Clarkston, Mich., a Detroit suburb. The 148-unit Class A community offers a common area with a fireplace and piano, communal dining venues, a bar, library card room, salon, spa, movie theater and sports facilities as its communal, experiential amenity spaces. These amenities provide a sense of balance that equates “individual needs (with) promoting mental and physical well-being,” according to Coughenour.
The experience-focused approach not only adds to residents, but their inherent values as investments and marketing opportunities. According to Shlomi Ronen, founder & managing principal of Dekel Capital, an experience-focused approach to amenities benefits the community’s business side and the resident experience.
This philosophy guides the company’s capital markets for senior housing investment and development. communities. Lifestyle, activities and resident care are the three pillars of Dekel’s strategy for senior housing. These three factors oftentimes evolve organically, Ronen said. “You can create that vision, and by creating that vision you will attract the residents are willing to pay for that.”
Residents taking ownership
Behind the selection of wellness-focused amenities is an understanding how residents view the community and the goal of creating an active, interactive experience. This principle shaped Methodist Retirement Communities’ development of Stevenson Oaks, a new senior housing community in Fort Worth.
Designed to enhance the community’s aesthetic appeal, every amenity takes resident feedback and comfort into account. As the community’s executive director, Kristi Baird, told MHN: “We are bringing what is normal and things that they loved to do before they moved into the community, and made [them] part of the community, so that home is truly where they are.”
An example is the landscaped gardening space at Stevenson Oaks. Residents play a hands-on role from the initial planning to planting crops and their inclusion in meals. “These garden areas are critical to use because [they] give our residents a space that they get to own and belong in,” Baird said.
The sense of ownership informs features that were selected with resident input, such as pickleball courts and the use of Technogym products in its fitness centers. Jill Janes, the community’s vice president of marketing, detailed the process. “As we moved closer to development and had initial sketches drawn up, we were able to infuse the feedback that we were getting from the seniors in the area,” she said. “[We built] to the demand, instead of building and hoping for the demand.”
Ronen agrees. “To the extent (that) you’re changing the typical box of what is provided in the vast majority of senior housing, it’s really great spaces that align well with the business plans and positioning of the community with respect to the targeted residents” which make for both the best operations and the happiest residents,” he said.
Location as an amenity
At least one other aspect of a new senior housing community should be considered an amenity: its location. Brightview Senior Living factors it into construction and development, with a focus on providing residents with the comfort of what resembles their most familiar living arrangements.
For its more urban projects, it creates “walkable, highly (amenity-rich) locations, with the spaces themselves being of the more mid- and high-rise variety,” said Vice President of Development Steve Marker. One such project is Brightview Hunt Valley, a 178-unit community adjacent to a grocery-anchored shopping center that also includes a new 30,000-square-foot fitness facility. This combination provides a walkable lifestyle that allows Brightview to integrate their proprietary services with the retail and fitness resources next door.
On the other end of the spectrum, Brightview has taken to constructing suburban communities under a more traditional, three- or four- story model located in more natural, bucolic settings. Whether the properties are urban or suburban, the goal remains the same: “(Making) sure that we’re providing a lifestyle that is consistent with the way they’ve been living for years,” Marker added.
In this light, Coughenour sees such considerations, their astute placement, and attention to what the new generation of seniors wants, as the best recipe for success. “A strong location within a given market makes the community more attractive to residents and their families coupled with a strong management team, increases resident retention or average length of stay,” he said.
Read the March 2023 issue of MHN.
