Senior Living News Wire

The seniors housing sector continues to see recovery, with positive rent growth trends and a slightly higher occupancy in fourth quarter of 2011, although construction activity continued to decline, according to NIC MAP, a data analysis service of the National Investment Center for the Seniors Housing & Care Industry (NIC).

The average occupancy rate for seniors housing properties in the last quarter rose to 88.2%, up 0.1% from the previous quarter, and a 0.7 percentage point increase from a year ago, the data analysis service reports.

For independent living properties, occupancy averaged 88%, 60 basis points beneath the average of 88.6% for assisted living properties. However, the independent living segment was the only one to show improvement from the prior quarter, posting a 0.2 percentage point increase from the third quarter.

Average occupancy for both independent and assisted living are both 1.2% above their respective cyclical lows, says NIC.

“With occupancy continuing to rise, it is clear the recovery is underway, however, independent living has been driving much of the occupancy gains in recent quarters,” Michael Hargrave, vice president of NIC MAP, said in a statement.

Source: NIC MAP

Year-over-year rent growth for seniors housing was boosted 0.1 percentage points to 1.7%, compared to 0.8% in the fourth quarter of 2010.

“While rent growth continues to slowly improve, it is important to note that current rent growth remains below the current level of inflation,” Chuck Harry, NIC’s director of research and analysis, said in a statement.

Annual absorption was at 2.0% in the fourth quarter, compared to 1.9% in the third quarter and 1.7% during the same period of the previous year. This marks the fifth consecutive quarter where annual absorption outpaces the annual inventory growth, which serves to pressure occupancy, Harry noted.

Seniors housing annual inventory growth rate was 1.2%, better than the previous quarter’s 1.0% but down from 1.5% in the 2010′s fourth quarter, NIC reports. Construction as a share of existing inventory for seniors housing was also down, at 1.5% compared to 1.6% in the third quarter.

Nursing care occupancy rate declined slightly to 88.2%, and NIC says that this segment’s occupancy has been “marginally declining” for several years now. Annual inventory posted negative growth of -0.4% in the quarter, “continuing the established trend of slightly declining inventory growth.”

However, private pay rents for the sector grew 3.4% year-over-year in the quarter, NIC says, keeping pace with third quarter results.

Click here to access the regional quarterly NIC MAP data.

Written by Alyssa Gerace

Assisted living laws in Florida could go from one side of the spectrum to the other in the wake of the Miami Herald’s series on elder abuse that occurred in many state facilities, with little or no ramifications.

Now, Florida lawmakers are looking to shift the state’s caretaker oversight from negligent to possibly the toughest in the nation, according to a Miami Herald article, recently passing committee bills 7176 and 7174.

With rampant abuse across the state, key lawmakers are calling for homes to be shut down when residents die from shoddy care, and caretakers banned from the industry, in the biggest changes in state law since the creation of ALFs a generation ago.

Unveiled this week by two Senate committees, the dual bills follow months of reports by The Miami Herald that showed frail elders were living in squalor and dangerous conditions while regulators failed to crack down on the worst abusers.

“[The state] wasn’t doing its job,” said Sen. Nan Rich, a Weston Democrat and vice chair of the Children, Families and Elder Affairs Committee. “They were not enforcing the regulations, and not closing down facilities that didn’t correct the violations and abuse.”

The proposal includes comprehensive legislation that seeks to improve oversight such as mandatory penalties in fatal neglect cases and a public ratings system derived from a facility’s regulatory history, the article reports.

Additionally, the regulatory reform bills take some power away from Florida’s Agency for Health Care Administration, which in the course of the investigation has faced scrutiny for failure to shut down or adequately penalize troubled facilities.

The full Miami Herald article lists several proposals from Rich’s Elder Affairs Committee and the state Senate’s Health Regulation Committee.

Written by Alyssa Gerace

There are always new developments in senior care technology, from better ways to keep track of health, to new blogs talking about healthcare information technology, to innovative devices that make hearing aids more affordable. Check out the following websites and products for ways to keep up with the latest tech trends and developments.

1. Careverge: Online Health Platform

The Careverge website seeks to converge peoples’ health data into a single platform that allows users to interact with others who have similar health concerns. Individuals can store health information and medication/medical reminders and use the website to track their health and achieve personal health goals.

2. Babyloid: A Robot Baby for Seniors

Japan’s Dr. Masayoshi Kanoh has invented the “Babyloid,” a therapeutic robot that’s meant to prevent depression and loneliness in elders. The robot is designed like a human baby in size and shape and has “humane interaction” thanks to sensors which react to movement, temperature, pressure, and the surrounding light. A clinical demonstration where elders spent time with the Babyloid showed it was effective in reducing depression in seniors. Read more at NewScientist.

3. Able Planet: Affordable Hearing Aids

Good-quality hearing aids are expensive to come by, but a Colorado headphone manufacturer, Able Planet, is planning on launching a new line of affordable amplification devices, including the Personal Sound AMP. This device, which was recognized at the CES trade show as one of the year’s “most innovative health products,” will cost $800 for a pair and is meant as an alternative to hearing aids. Read more at Bloomberg.

4. Emissary Technologies: Electronic Medication Administration Record (eMAR).

Emissary Technologies’ web-based system MedRight is a “modern, full-featured eMAR” that allows users to collect resident data and pass meds even while off-line, with additional features that include pharmacy software integration and bar-code scanning.

5. Long-Term Living: Blog on Long-Term and Post-Acute Care Health Information Technology

A Long-Term Living contributor is beginning a blog devoted to news and trends in long-term and post-acute care (LTPAC) health information technology “so we in LTPAC can control our future, through strategic planning.” Check it out.

Bonus: See which consumer electronic products designed for the 50+ crowd were honored at the First Annual Sterling Award Ceremony at Silvers Summit during CES.

Written by Alyssa Gerace

When it comes to family obligations and financial decisions considered across three different generations, an overwhelming majority of the Baby Boomer cohort believe in being self-reliant in retirement, according to a MetLife survey, “Multi-Generational Views on Family Financial Obligations.”

All three generations, including Gen Xers and Gen Yers, believe they have responsibility and obligation to: save enough for retirement to avoid having to ask family members for assistance; have a parent live with them if they need to do so due to a major health or financial issue; and make sure a spouse would have enough money if a financial provider dies suddenly, among others.

Incidentally, Baby Boomers are more likely than the two following generations to believe that life insurance should provide for surviving spouses, with 82% of having policies for their spouse, compared to 66% of Gen Yers and 76% of Gen Xers.

No matter which generation they belonged to, respondents strongly valued being financially independent in old age so as not to be a “burden on their children.” However, they also felt strongly responsible to protect elderly parents who aren’t as independent as they themselves strive to be, reports MetLife.

The best legacy for the next generation may be a sound financial plan now for the older generation, says MetLife. And for the older generation, even if they plan to try to stay in the home as long as possible, it’s wise to discuss “what if” alternatives as “housing decisions inevitably impact financial planning at all life stages.”

“Adequate financial reserves and spending plans for a potentially long lifetime ensures that an older parent is less likely to become a financial burden at some later point,” says MetLife.

View the MetLife Mature Market Institute survey findings here.

Written by Alyssa Gerace

Healthcare Transactions Group, Inc., based in Baltimore, Md., announced that it closed the sale of an Illinois long-term care facility portfolio on Dec. 30, 2011.

The portfolio includes eight skilled nursing facilities and one assisted living facility, located mainly in the greater Chicagoland area and in Central Illinois, for a total of 1,540 beds. The sale also included a licensed renal dialysis center and 38 residential retirement apartments, with a total portfolio price ranging between $95 million and $100 million, plus undisclosed contingent considerations.

The seller is Morton Grove, Ill.-located Kensington Management Group, LLC and its affiliates, represented by Mark Davis, president of Healthcare Transactions Group. The buyer encompasses affiliates of Formation Capital, LLC, based in Alpharetta, Ga., who will lease the facilities to an affiliate of Nucare Management Corporation, based in Lincolnwood, Ill. Kensington Management Group had both owned and operated the facilities prior to the sale.

The facilities include Aspen Ridge Care Centre, in Decatur; Countryside Care Centre, in Aurora; Crestwood Care Centre, in Crestwood; Deerbrook Care Centre, in Joliet; Maple Crest Care Centre, in Belvidere; Maple Ridge Care Centre, in Lincoln; McKinley Court, in Decatur; Northwoods Care Centre, in Belvidere; and Sycamore Village, in Swansea. At the time of the transaction, the overall occupancy rate was 86%.

Written by Alyssa Gerace

When various types of buildings end up vacant and in disuse, sometimes the next logical step is to repurpose them for senior housing, especially as the nation’s senior demographic grows at a rapid pace.

Old hospitals, hotels, and schools are probably the three most common types of buildings that can be converted into an assisted living facility, because they’re typically already divided into individual units but also feature common spaces; rooms in hotels and hospitals often have the added advantage of already having private bathrooms.

However, embarking on these projects isn’t always a walk in the park, according to some companies with conversion experience.

One of the mistakes that people make is thinking that because they might be able to get a conversion property cheaply, it will be a cost-saving project, but this isn’t necessarily the case, says Mike Collins, president of Senior Care Realty, LLC.

It can actually be more affordable to build from scratch, he says, and it’s generally easier and more predictable to build from the ground-up, too.

In some circumstances, though, it does make sense, and when it comes to financing a project, there may not be too much of different compared to new construction. In some cases, conversions may even qualify for tax credits or historic preservation programs, Collins told SHN.

One big factor is the availability of land. If there’s a vacant building in an area that’s been heavily developed, he says, it could present an opportunity for conversion.

Other factors include the market.

“I’ve encountered many developers who perhaps are overly optimistic about how profitable a development can be,” Collins says. “If you look at it purely as a real estate deal and not a business opportunity, people can make mistakes.”

It’s important to understand the market and the business aspect before trying to take advantage of a real estate opportunity, he says.

The key indicator in deciding whether or not it’s worth converting a building is figuring out if the work can be done at a substantial discount to new construction.

Even if the building itself is being sold for a good value (think state-owned hospitals and schools that have fallen into disuse, or abandoned hotels), developers could face headwinds from a marketing standpoint, in that an old property may have “marketing baggage,” Collins says.

For example, an old hospital-turned-ALF maybe have a positive community perception, with residents having fond memories of their children being born there. On the other hand, a building that used to be a mental institution could be negatively viewed.

“There are always surprises when you’re dealing with historic buildings,” says Richard Westin, CEO of Agemark Corporation, based in Berkeley, Ca., naming “surprises” like asbestos or water damage that affects multiple floors.

The most common challenges when it comes down to physically converting an old building into an assisted living community include regulatory issues related to the physical plant, such as bathrooms that are not ADA-compliant; doorways that aren’t wide enough to comply with current regulations; utility costs that are much higher than they’d be in a new building; or the fire code not being up-to-date.

Ultimately, if a property can be acquired and remodeled at a price point that is at a discount to current construction costs, says Collins, then this sort of project makes sense.

Written by Alyssa Gerace

How much will an average assisted living cost? The answers vary widely depending on region, but the latest data from Northwestern Mutual indicates that assisted living residents face a single room average of $3,372.41 per month. For nursing home patients, the average is $246 per day.

The costs are mounting at a time when Americans are getting older, notes the cost of Long-Term Care study, but without much planning on the part of those who will seek the services.

“What’s interesting is that most people realize they will need care, and yet by their own admission they’re not sure how they plan for it,” said Steve Sperka, Northwestern Mutual vice president of long-term care.

The costs depend greatly on location and care-type, but are consistently high, the report states, with the most expensive region seeing monthly costs for assisted living of more than $6,600 (Bethesda, Maryland) and the least expensive at $1,200 per month (Milwaukee). For nursing care, the average annual cost for a private room is roughly $90,000.

“The data is sobering, and doesn’t even include the added expenses of medical equipment, transportation, drugs and other hidden costs,” Sperka said. “Relative to other financial commitments in retirement, long-term care costs are disproportionately high and people need to think ahead to lessen the financial and emotional impact.”

The study also tracks hourly rates of pay for home health care, finding the national rate for Home Health Aides is $20.65 per hour.

View the study highlights.

Written by Elizabeth Ecker

Equity LifeStyle Properties, Inc. reported a net loss of $0.2 million, translating to $0.00 per share, available to common stockholders on a fully-diluted basis for the fourth quarter ended Dec. 31, 2011, as the company continues to encounter costs associated with an acquisition made in May 2011.

Overall net income for the year was $22.8 million, or $0.19 per share, down from the previous year’s $38.4 million and $1.26 per share.

The company’s funds from operations (FFO) increased nearly 68% to $43.5 million or $0.96 per share, up from the third quarter’s $25.9 million, or $0.73 per share.

The FFO would have been still higher, at $44.7 million and $0.99 per share on a fully-diluted basis, excluding the costs associated with ELS’ $1.43 billion acquisition of a portfolio of 75 manufactured home communities and one RV resort made on May 31, 2011. In the fourth quarter, ELS recorded transaction costs connected with the acquisition of approximately $1.2 million.

Without this $1.2 million transaction cost, the company would have posted a net gain of $0.9 million, or $0.02 per share, available to common stockholders. Throughout the year ended Dec. 31, 2011, ELS closed on 75 properties, with associated transaction costs of approximately $18.5 million. The purchase agreement for one of the Michigan properties was terminated, although the company continues to do due diligence on said property.

ELS reported property operating revenues, excluding deferrals, of $158.4 million in the fourth quarter, up 31% from the same quarter in 2010. Out of this revenue, approximately $34.5 million can be attributed to the 75-property acquisition. Total revenues for the quarter were $159.3 million.

For the year ended Dec. 31, 2011, property operating revenues were $570.2 million, compared to $506.5 million the previous year, including a total of $56.6 million of revenue from the portfolio acquired in May. Community base rental income continues to account for the majority of the quarterly revenue, rising nearly 52% from last year to more than $99 million. Property operating and maintenance expenses rose less than 20% to $52.2 million in the fourth quarter.

During the fourth quarter earnings call, ELS CEO Thomas Heneghan spoke to the success of the company’s RV sector.

“Our RV customer is resilient,” he said. “Over the last few years, we’ve seen significant fluctuations in gas prices and extremely difficult economy, yet this revenue stream continues to grow. It is clear the installed base of approximately 8 million RV owners find this lifestyle attractive.”

In response to a later question about the company’s 2012 guidance for growth assumptions around RV membership success, Heneghan said the RV sector would “trail off a little bit next year… but we still like the RV business and we’re still trying to figure out how to grow that business.”

As of Dec. 31, 2011, ELS had a cash balance of approximately $70.5 million. Looking ahead, the next quarter’s average estimate for revenue is $153 million.

View Equity LifeStyle Properties’ fourth quarter earnings report here.

Written by Alyssa Gerace

The United States needs to create a “new, affordable safety net” of Social Security and Medicare so that future Americans can continue to be protected along with current generations, Governor Mitch Daniels (R-Ind.) said in his rebuttal to President Obama’s State of the Union address on Tuesday night.

After the president’s speech, Daniels fired back that his party’s first concern is for those waiting tonight to “begin or resume the climb up life’s ladder,” and that “we must always be a nation of haves and soon to haves” rather than “haves and have nots.”

Addressing the nation’s economic struggles includes uniting to “save the safety net” of Medicare and Social Security, according to the Indiana governor. The two programs have “served us well, and that must continue,” he says.

“But after half and three quarters of a century respectively, it’s not surprising that they need some repairs. We can preserve them unchanged and untouched for those now in or near retirement, but we must fashion a new, affordable safety net so future Americans are protected, too.”

While it’s true that in the past, the system has been able to send pension checks and cover medical expenses even for the wealthy, this is no longer possible, he continued, and what funding is available should go to the people who need it the most.

“The mortal enemies of Social Security and Medicare are those who, in contempt of the plain arithmetic, continue to mislead Americans that we should change nothing,” Daniels said. “Listening to them much longer will mean that these proud programs implode, and take the American economy with them.”

Below is part of Mitch Daniels’ rebuttal; he begins talking about the two government programs at 6:20.

Written by Alyssa Gerace

Integral Senior Living, a company that manages senior living communities, announced on Jan. 19 that it has added managing fee based entrance CCRCs (continuing care retirement communities) to its roster of services.

ISL has most recently begun managing Oakmont Senior Living’s CCRCs, Varenna Signature Living, Segovia Signature Living, Capriana Signature Living, and Cardinal Point Signature Living.

“With the addition of Oakmont’s CCRCs we are able to manage a full spectrum of senior living lifestyles and we are excited to extend our capabilities in new ways,” said Chris Kasulka, CEO/COO of ISL, in a statement. “We know that an ever-increasing number of seniors are choosing to spend their retirement years in CCRCs, which provide a wonderful way of life for many.”

In 2010, ISL was recognized by the Assisted Living Federation of America with the “Best of the Best” award, and according to the American Senior Housing Association, ISL posted the greatest percentage of increase in units managed between 2010 and 2011, at 77%, after adding 2,130 units to its managed portfolio.

Written by Alyssa Gerace

In a development climate that is still plagued with limited credit and sometimes-unconventional financing, some senior housing developers are starting to look into individual projects that combine public benefits and private capital for a mutually-favorable deal.

The deals often present solutions that result in senior housing developments or rehabs, but they can require the participation of several entities. For the right partnerships, the capacity to combine a public property or facility with financing or operations from a private company can provide a positive outcome for all parties, even if the opportunities are not yet commonplace.

“The mix between public and private is getting blurred,” says Marc Cabrera, Managing Director and head of Healthcare Investment Banking at Morgan Joseph TriArtisan.

But that combination of private and public capital that can sometimes change the importance of the tax structure of the deals, as there are often there are public tax incentives, but they come with restrictions.

In the case of some publicly-funded hospitals, Cabrera says, capital is part of the equation, but there are other considerations as well.

“What is the mission of the larger organization?” he says. “It’s still important, but it’s not the only decision.”

The deals aren’t exactly commonplace in the senior housing sector, but some companies have seen success in this particular type of senior housing development partnership.

“It’s a minor trend in the space,” says Dan Hermann, senior managing director and head of investment banking for Chicago-based Ziegler, noting that Ziegler has not yet been active in private/public projects, but is doing research in the space. “It’s usually in a crowded urban market or an area that needs moderate to affordable senior housing.” It might involve working with a municipality, Hermann says, or finding a publicly designated parcel of land for the building type.

Several developers are seeing success in the projects, Hermann says, but it may be too soon to call the developments a “trend.”

“A lot of people are trying to figure out these tax credit deals,” Hermann says, noting that they’re almost always affordable housing units in urban areas. “Cities are motivated to keep seniors and get creative.”

Written by Elizabeth Ecker

Belmont Village Senior Living Breaks Ground in Dallas, Texas

Belmont Village Senior Living broke ground in January for Belmont Village Turtle Creek, scheduled to open in Summer 2013. The senior living community will feature 201 independent and assisted living as well as Alzheimer’s care.

Lend Lease Begins Construction on The Terraces at Bonita Springs, A SantaFe Senior Living Community

Lend Lease has been selected by SantaFe Senior Living, a SantaFe HealthCare company, to provide construction management services for The Terraces at Bonita Springs, a retirement community in Bonita Springs, Fla., with Greystone Communities as SantaFe’s development consultant. Construction for the 144 one-, two-, and three-bedroom apartment homes, 48 assisted living, 40 skilled nursing, and 18 memory support residences began on Nov. 4, 2011.

Construction Underway at Senior Living Complex in Fridley, Minnesota

Construction is underway for the Landmark of Fridley senior living project in Fridley, Minn. What was formerly a neighborhood restaurant has been torn down, and the project developer broke ground in late September for a 70-unit independent and assisted living and memory care community.

Wartburg Breaks Ground on Affordable Senior Housing

On Jan. 11, 2012, a groundbreaking ceremony was held for the Friedrichs Residence, which will be a 4-story building with 61 affordable senior apartments in Mt. Vernon, N.Y. Bank of America Merrill Lynch Community Development, Enterprise Community Investment, Inc., and  the New York State Housing Finance Agency all contributed to the financing of this project, along with a a $1 million bequest from the late Juanita E. and Arthur M. Friedrichs, for whom the project has been named.

Inland Group Launches Construction for Lafayette Senior Housing Development

Affinity at Lafayette, a senior housing project in Lafayette, Co., broke ground in recent weeks, led by Spokane, Wash.-based Inland Group. The senior independent living apartment community will feature 12 studios, 60 one-bedroom and 48 two-bedroom units, contained in one building.

A nursing home “bed tax” proposed in Illinois is receiving push back from consumer advocates who argue taxpayers should not have to foot the bill for long term care. Proponents of the legislation, which would increase Medicaid payments to nursing homes by nearly 10% by taxing $6.07 per long term care resident, aims to help carry out a nursing home reform law approved in 2010.

The potential losers? Small, independent facilities that lack a substantial proportion of Medicaid patients. Those positioned to gain? Nursing homes with a higher proportion of Medicaid patients. And the state of Illinois, which sees the tax increase bringing in an additional $145 million next year to help pay for nursing home staffing and quality improvements.

The Chicago Tribune reports:

Passed with Democratic support largely along party lines, the bill is part of a yearlong effort to undo a legacy of violence and abuse in Illinois nursing facilities. Lawmakers acted after a Tribune investigation last year found many poorly staffed facilities were housing dangerous psychiatric patients alongside more vulnerable geriatric and disabled residents, sometimes with deadly consequences.

In July, [Gov. Pat] Quinn signed a sweeping reform law that requires nursing homes to meet more stringent safety standards and will also create an array of smaller, residential programs to provide intensive therapy and supervision for mentally ill patients currently housed in nursing facilities.

The tax is under federal review and is expected to be implemented soon.

Read the Chicago Tribune article.

Written by Elizabeth Ecker

A recent article from the U.S. News: Money blog discusses the growing recognition of the aging-in-place movement, along with all the roadblocks it’s enduring as most cities and metropolitan areas aren’t designed with seniors in mind.

Although it’s been common for seniors to move to warmer regions when they retire, trailing home values that are some $7 trillion below their peak, according to U.S. News, may be a factor in why interstate migration has “just about ground to a halt.”

“Why accept a depressing reality when it can be turned into a positive marketing and lifestyle mantra? So it is with aging in place. Seniors are told that they can save money by staying in their homes, while also retaining priceless relationships with nearby family and friends. They can age in familiar surroundings, and thus may be able to avoid moving to a nursing home or assisted living facility. If finances are challenging, there is always a reverse mortgage that can provide needed funds and permit seniors to stay in their homes.”

The article goes on to explore ideas that promote aging in place involving land use, transportation, and housing, and what some states are doing to support the movement.

Read the U.S. News: Money blog post, “Great Ideas for Senior-Friendly Communities,” here.

Written by Alyssa Gerace

A new group of institutional grade independent living facilities in the Dallas and Fort Worth Texas markets are for sale according to Marcus & Millichap Real Estate Investment Services, who was chosen to sell the properties.

The properties are being offered on an open-bid basis.

“Now is an excellent time for seniors housing investors to add to their portfolios or for new investors to gain a foothold in the sector,” said Doug O’Toole, vice president of investments for Marcus & Millichap. “Nationally, the 65-year-old-plus age group is projected to expand by almost 18 million residents over the next 10 years and account for 17 percent of the U.S. population, up from an estimated 13 percent in 2011.”

The portfolio has more than 400 units and is spread out over two communities according to a statement. The North Dallas facility consists of approximately 232,000 square feet and was built in 2009 on 14.5 acres.

The Fort Worth facility consists of approximately 197,000 square feet and was built in 2007 on 7.4 acres.

Written by John Yedinak