CCRCs Flying High on Economic Tailwinds
Good times are here for many continuing care retirement communities (CCRCs).
The boom times for CCRCs—or “life plan communities,” depending on who you ask—was predicted earlier this year by Marcus & Millichap. The national real estate brokerage firm anticipated that CCRCs would be the only senior housing asset class to see an overall increase in occupancy in 2017.
CCRCs are currently less vacant than communities that do not offer a full continuum of senior living and care. The occupancy rate for assisted living properties averaged 86.6% during the third quarter of 2017, according to NIC data. Meanwhile, the occupancy rate for CCRCs during that same time was 90.8%, which represents a 30 basis points increase from last year’s rate.
A healthy housing market and ever-climbing share values might help explain why more seniors are choosing to live in CCRCs over standalone communities in many markets, according to Lisa McCracken, senior vice president of senior living research and development at Chicago-based speciality investment bank Ziegler.
“Often, the sale of the home provides funds for the entry fee,” McCracken told Senior Housing News. “[And] If they have greater spending capacity because of their investments, that can have a positive impact on the decision to move into a CCRC.”
CCRCs in the Northeast, mid-Atlantic and Pacific regions have the highest occupancies, while those in mountain states and in the Southwest have lower occupancies, she added.
Non-profit CCRCs also seem to be having an even better year than their for-profit counterparts.
“We know that, while the not-for-profits slowed down post-recession with developing new community locations, they spent a good bit of time reinvesting in their current campuses,” McCracken said. “I think that is why we’ve seen occupancy rebound, and we know that not-for-profit CCRC occupancy is 5% above the for-profit owned and managed CCRCs.”
If CCRCs are rocket ships—as Chris Bird, president of entry fee and owner relations at Brookdale Senior Living (NYSE: BKD) put it earlier this year—then many providers are in the boost phase.
The RiverWoods Group, a non-profit organization that owns and manages three CCRCs in Exeter, New Hampshire, is currently plotting a fourth in nearby Durham. That location—which is slated to have 294 units and a bevy of upscale amenities—recently moved up its opening date from 2020 to 2019 due to high demand, according to Cathleen Toomey, vice president of marketing at RiverWoods.
“The response has been phenomenal,” Toomey told SHN. “We had 600 people sign up in about a six-week period. It was beyond what our past experience has been.”
The bullish outlook also has many providers thinking big—sometimes literally, as with the case of Indianapolis nonprofit BHI Senior Living. The provider recently sold the last of 30 newly constructed, 4,100-square-foot duplexes at its 395-unit Hoosier Village community in Indianapolis.
“We had a tremendous response from the market,” BHI president and CEO John Dattilo told SHN earlier this month. “All of the units had deposits on them before we even started to build, and that was just a matter of a couple months.”
Even CCRCs that seemed to be struggling after the Great Recession have found their footing. The Clare, a CCRC in downtown Chicago (pictured above) that underwent a multi-million dollar makeover in 2015 after declaring bankruptcy years prior, is now nearing 100% occupancy, according to executive director Kyle Exline.
“I think when you see a strong economy and a strong housing market, you tend to see the CCRC model be more attractive,” Exline told SHN. “In a down economy, people tend to think that a rental community is the right option for me. It tends to ebb and flow as the economy goes.”
Turbulence and trouble
Still, some industrywide challenges remain despite robust demand. For example, staffing and labor woes remain one of the senior living sector’s greatest hurdles.
For non-profit providers, 33% said labor cost pressure was among the greatest financial challenge to the industry, according to the latest Ziegler CFO Hotline report.
And many companies—though not all—still don’t know what to do with their post-acute units amid turmoil in the skilled nursing industry. Across the country, many CCRCs are downsizing their skilled nursing wings and focusing on more profitable assisted and independent living wings.
Pricing plans might also prove to be a ticking time bomb, with one analyst suggesting providers should re-examine the type-A, or “life care,” pricing model.
Yet, many CCRCs feel good about where they’re at—especially as more baby boomers prepare to retire.
“I think CCRCs are at a tipping point,” Toomey said of RiverWoods’s recent success. “If you take a look at the demographics that are going on across the country right now, you have more retirees, they’re living longer, they’re accessing health care more, and they want to be independent.”
Written by Tim Regan
PHOTO CREDIT: The Clare: http://theclare.com/
Article from: seniorhousingnews.com
Frankfort Senior Community Gets Makeover
Published in Inside Indiana Business
July 21, 2016
FRANKFORT – A large retirement community in Frankfort has kicked off a $575,000 round of improvements. The project includes renovations to three areas of the 83-acre property and the demolition of two buildings to make way for green space.
Wesley Manor is owned by Indianapolis-based nonprofit BHI Senior Living Inc., which says the work will involve 10 village homes, 10 independent and assisted-living apartments and the health center’s rehabilitation wing. Twelve units the organization has deemed “no longer marketable” have been taken down.
Executive Director Kevin Ward says “after the project is completed, Wesley Manor will have a lot more curb appeal.” He adds “our partnership with BHI has made us financially stronger, which in turn, has allowed us to focus on updating the campus and ensure our current and future residents have a nice place to live.”
Wesley Manor became a BHI affiliate in January. The company also has communities in Indianapolis, Fort Wayne and Columbus.
Renovation Project Involves Village Homes, Apartments and Rehab Center
Published in Frankfort Times
August 9, 2016
Article Written By Sharon Bardonner
Traveling along State Road 75 on the north side of Frankfort, drivers can now see a row of residential homes rather than two multi-unit buildings. Razing the two outdated six-unit structures is part of Wesley Manor’s
$575,000 renovation, intended to update several parts of the Frankfort continuum of care campus, according to Executive Director Kevin Ward.
Based on their square footage and floor plans, the sixplexes were determined to be unmarketable, said Ward, so rather than retrofit them, the decision was made to demolish the structures in lieu of green space.
Ward hopes that residents begin to see the area as a park-like setting for public gatherings, picnics and other outdoor events. The area is about the size of a football field with several full-growth trees offering lots of shade.
Several residents already have provided ideas for the open space, many culled from current TV shows. One proposed a settlement of “tiny homes,” while another suggested building fancy treehouses.
The renovation also includes refurbishing several independent living homes in Wesley Village to bring the interiors and floorplans up to today’s styles, Ward explained. The spending, which is about $30,000 per home, is now possible given the retirement community’s better financial position.
“Wesley Manor went through several years of budgetary concerns,” Ward said, “so there were cuts and postponed renovations. But now with BHI Senior Living’s financial backing, we’re able to do some things, such as bring several of our Village Homes up to date, making improvements of a cosmetic and structural nature.”
“Our goal is to create homes where people can age in place most independently as possible,” he said.
Throughout the Village are a mix of home styles to create a feeling of a neighborhoods in Frankfort. “It doesn’t look like a health campus, and we embrace that,” said Ward. “They’re not cookie-cutter; there’s a sense of variety. Here, you’re not mowing and you’re not shoveling snow, but you’re still living ‘at home.’”
The Village community consists of 75 homes, with 16 currently available.
Updates are also being done in the main building, the Manor House, with 10 independent and assisted-living apartments getting upgrades, such as six-panel doors and good baseboards.
Also, in the fall, the rehabilitation wing will receive new carpet, paint and window coverings and will gain on-unit therapy areas to improvement treatment options.
Wesley Manor’s association with BHI has not only freed dollars for upgrades, it has also created operational efficiencies and cost savings.
As a result, the Manor has been able to restructure its prices, said Ward.