Senior Living News Wire

Senior housing construction starts have nosedived 53% since the 2008 housing market crash, according to the National Investment Center for the Seniors Housing & Care Industry (NIC), and even though demand is growing, lucrative opportunities for developers are dwindling as “hot spots” around the country turn lukewarm.

“Hot spots are the places where there’s high occupancy and low barriers to build,” says Larry Rouvelas, who co-founded Senior Housing Analytics along with Phil Downey.

However, these “hot spot” metropolitan areas with high occupancy levels often turn into a developer’s playground, says Downey, and many places with the best opportunities have already been developed.

“If you look at performance statistics, some seem to be performing at a higher level, and they seem to present more opportunity,” he says. “That always seems to coincide with a higher level of challenge, finding developable sites at an affordable price. It’s a classic situation, low barrier markets seem to disproportionately attract high volumes of development.”

In terms of high levels of construction activity, current “hot spots” include Chicago, Ill., New York City, NY, San Francisco and Los Angeles, Ca., Dallas, Tex., Minneapolis, Minn., St. Louis, Mo., and Phoenix, Ariz., but that corresponds to those being large markets with bigger populations, says Chuck Harry, director of research and analysis at NIC, not necessarily because they are low barrier.

However, new “hot spots” may crop up around the country as the population ages; U.S. Census data predicts that nearly 20% of Americans will be aged 65 or older by 2030.

“Generally, [developers] are looking for areas where there’s solid demand, level of occupancy rates, and ability to demand appropriate level of rent,” Harry says.

Areas that are attracting less attention but present opportunities for development because of a relatively low barrier to entry include Nashville, Tenn., Orlando and Dublin, Fla., Lancaster, Pa., and Bridgeport, Conn. Each of the cities has seen construction increase in renovation and ground-up development, according to Senior Housing Analytics‘ compilation of NIC data.

“As our industry matures, the opportunities to add supply are still there, but developers need to be more discriminating and more focused in terms of how you isolate those opportunities,” says Downey.

Senior housing construction starts have been hanging at a cyclical low for the past few quarters, says Harry. This, in turn, is putting pressure on occupancy rates, causing them to increase slightly.

And, since annual inventory growth has dropped to 1.1% in the second quarter of 2011, down from 2.1% the previous year, according to NIC data, it’s likely occupancy levels will continue to rise through the next year.

As greater numbers of older Americans head toward retirement and beyond, the need for new construction will eventually reach a tipping point.

“We don’t anticipate a boom, per se, over the next four quarters,” says Chuck Harry, NIC. “At this point, we’re not looking at that. Given the demand, we’d expect there will be an increase in the current rate of construction, in the future. Time will tell when that is.”

Written by Alyssa Gerace

The Mayo Clinic Center for Innovation (CFI) recently announced that Best Buy is the founding consortium member of a new “living lab” in the Charter House, a Rochester continuing care retirement community.

The Mayo Clinic CFI is collaborating with the Mayo Clinic’s Robert and Arlene Kogod Center for Aging and the Charter House to further aging in place initiatives by creating the Healthy Aging & Independent Living (HAIL) Lab. The lab will be used for focus groups, designing, prototyping and piloting new services and technologies with voluntary participation from Charter House residents, as well as other community agencies.

“The goal of the HAIL Lab is to understand the needs of seniors and develop products and services that will help them live longer, more independent lives,” says Nicholas LaRusso, M.D., medical director of the Mayo Clinic CFI.

Best Buy’s participation in the consortium follows its exploration of the potential growth of wireless-enabled health-related devices.

“We believe technology has the potential to foster healthy, productive lives by enabling easier access to information and medical care,” says Kurt Hulander, senior director of health platforms at Best Buy. “Our partnership with Mayo Clinic will help us better understand the full potential for health technologies with patients who need them most.”

Best Buy has already made investments into the health and wellness technologies arena, expanding its portfolio of health-related retail offerings with blood pressure monitors, pedometers, fitness watches and other connected devices.

Written by Alyssa Gerace

The nursing home industry is shrinking even as the nation’s population ages, meaning 42 million seniors could end up without care by 2012, according to an infographic created by Assisted Living Today.

While 10,000 baby boomers are reaching senior status each day, and will continue to do so for nearly 20 years, according to U.S. Census data, nursing homes around the nation are closing.

Both the Western and Southern regions have experienced high rates of closure, at 17% and 18%, respectively. The Northeast and Midwest each have nursing home closure rates of 14%.

In 10 years, 70 million Americans will be aged 65 or older, and at the current rate of population growth and closure, only 40% of the senior population will have an opportunity to live in a nursing home, says Assisted Living Today.

Source: Assisted Living Today Infographic, 2011

However, between 1998 and 2008, the number of Americans living in nursing homes declined 6.1% to slightly more than 1.2 million, according to a Brown University study published in the July 2011 edition of Health Affairs. And, during this same time frame, there was 18.1% increase in the number of Americans aged 65-69, and 8.7% rise in those aged 70 and older, according to U.S. Census Bureau estimations, suggesting that many are opting for other forms of care besides that provided in nursing homes.

View the infographic here.

Written by Alyssa Gerace

Senior living provider TLC Management and real estate development company Leo Brown Group recently broke ground on a $17 million senior living community in Newburghon, Indiana.

The project, named The Village at Hamilton Pointe, will offer a full continuum of senior care, allowing residents to age in place thanks to the campus’s multiple senior living options.

The campus will feature 24 independent living units; a 53-unit Assisted Living Center with 20 units allotted to memory care in a separate wing; a therapy center for residents seeking short-term rehabilitation; and 115 skilled nursing beds for residents requiring constant care.

Now that construction has begun, residents are expected to move into The Village at Hamilton Pointe in the summer of 2012. When complete, the community is expected to create more than 160 new jobs.

The project has been financed through a conventional loan with a regional bank based in central Indiana, said Mike Brown, Vice President of Leo Brown Group.  Residents of the skilled nursing and rehabilitation portion of this project will utilize Medicare, Medicaid, or private pay and the assisted living, memory care, and independent living portion will be private pay.

Written by Alyssa Gerace

In response to a Miami Herald investigation into Florida assisted living facilities that uncovered sordid cases of elder abuse and neglect, the state Senate professional staff released a report calling for both increased and reorganized ALF regulatory oversight.

Currently, the Agency for Health Care Administration (AHCA) is in charge of licensing and inspecting ALFs, and may impose administrative fines for certain types of violations. In certain circumstances, it has the authority to revoke or deny licenses depending on cited violations, or suspend services, if any condition related to the licensee presents a threat to the health, safety, or welfare of a client.

However, the Herald’s three-part series revealed that in many cases, the agency neglected to revoke licenses or shut down facilities even after multiple complaints and reports of abuse.

This led the Senate professional staff to recommend “the establishment of a workgroup that includes members of the various state agencies having ALF oversight responsibilities to determine those functions that are performed by more than one agency.”

Until the workgroup comes about, the Senate staff advises the Legislature to require each agency to establish a direct line of communication to the AHCA to immediately communicate a complaint received or observed deficiency concerning an ALF, and that the AHCA must immediately report each complaint.

Other recommendations include requiring quarterly reports from ALFs to the AHCA on occupancy rates and demographic and resident acuity information and increased surveys and inspections by the AHCA.

The report also details specific training and qualification recommendations for both ALF administrators and staff, and includes the possibility of requiring increased staff ratios for facilities with specialty licenses.

As far as penalties go, the report suggests limiting the AHCA’s discretionary powers in favor of requiring them to take certain measures based on certain actions.

“For example, the Legislature could require the AHCA to fine an ALF in increasing increments after certain recurring deficiencies,” the report reads. “The Legislature could also remove the AHCA’s discretion to impose a moratorium or revocation of license when residents’ health, safety, or welfare is at stake. The AHCA could be required to automatically revoke a license when a resident dies at a facility because of intentional or negligent conduct on the part of the facility.”

Increased oversight is necessary as ALFs prepare to meet the greater needs of residents and provide sufficient quality of care as a result of the aging population and a shift toward community-based care, including assisted living, says the report.

By 2030, nearly 20% of the United States’ population will be aged 65 or older, and within Florida, that age group is expected to nearly double from 3.3 million in 2010, to 6.2 million, U.S. Census data projects. Currently, 17% of Florida’s population falls into this age range—the highest percentage in all 50 states.

This report’s recommendations will help lead to improved resident care and oversight, said Emmett Reed, executive director of the Florida Health Care Association, in a statement obtained by SHN.

“We are pleased to see the Agency for Health Care Administration already taking strong action against those facilities not in compliance with state regulatory requirements, which reflects poorly on those facilities that are committed to delivering high quality care to their residents,” says Reed. “We believe that focus on quality care starts at the top, and we support ALF administrator licensure and reviewing educational standards.”

For its part, the AHCA acknowledges that the report addresses several opportunities for improvement in the assisted living regulatory structure, including several that would require statutory change, says a spokesperson.

“We have reviewed the report and have shared it with the Assisted Living Workgroup during their meeting last Friday,” she told SHN. “The workgroup is charged with examining and making recommendations regarding assisted living facility regulation and oversight.”

View the Florida Senate’s Interim Report here.

Written by Alyssa Gerace

An assisted living and nursing home facility in Vale, Ore., violated federal law when it refused to hire an applicant with a disability for which she took a prescription medication, says the U.S. Equal Employment Opportunity Commission (EEOC) in a recently filed lawsuit.

Pioneer Place Assisted Living refused to hire Pamila Bourasa for a cook position because of her drug test results, even though she told them beforehand she was on prescription medication for epilepsy that would show up on the test.

Prior to the drug test, Bourasa had completed a “positive” interview with Pioneer and had even discussed a start date, prompting her to give notice at her old job.

The facility then told her they would not be hiring her due to the drug test results.

Bourasa has previously been fired from a job because of her epilepsy prior to protection under the American Disabilities Act, she says, adding she was “shocked” Pioneer would label her epilepsy medication as a violation of its drug-free workplace policy.

EEOC launched an investigation into the case, but after attempting to reach a voluntary settlement through conciliation, the commission filed a lawsuit seeking monetary damages on behalf of Bourasa and injunctive relief to correct the alleged illegal work practices.

“The ADA protects workers with disabilities from being excluded based on misinformation and stereotypes,” said William Tamayo, EEOC San Francisco Regional Attorney, in a statement. “Employers must individually evaluate the specific case in front of them. In this instance, Ms. Bourasa worked successfully for years while taking her prescription medication, but Pioneer simply rejected her out of hand.”

Written by Alyssa Gerace

OnShift, Inc., a software program allowing long-term care and senior living providers to schedule staff and manage shifts, has expanded its service platform to include the iPad.

The innovation is expected to help directors of nursing, administrators, schedulers, and others in long-term care and senior living to save time and improve efficiency by giving them the ability to access, view, create, update, and manage schedules and staffing information from any device.

The iPad platform allows for mobility in sending open shift messages to qualified and available staff via text, email and automated phone call.

“Our on-call nurses can have scheduling at their fingertips with OnShift on the iPad. A few taps will eliminate hours of phone calls trying to find replacements when someone calls off. Open shifts can happen anytime, anywhere, and we are really looking forward to the convenience of OnShift on the iPad,” stated Michele Brown, administrator, The Neighborhoods at Quail Creek.

In addition to open shift management, all OnShift capabilities are available on the iPad, including scheduling, overtime prevention, and reporting; the program predicts overtime and understaffing and helps senior care operators to stay on top of staffing needs.

Written by Alyssa Gerace

The Crown Group Inc., Evergreen Realty Services and Pathway Senior Living will break ground on Thursday for Oak Hill, a 94-unit licensed supportive living community in Round Lake Beach, Ill.

The community, slated to open in December 2012, will offer older adults deluxe accommodations in private studio and one-bedroom apartments, along with access to a community dining room and fitness center, a greenhouse, walking paths, and a garden.

Additionally, residents will receive a variety of supportive services that include three daily meals, weekly housekeeping, scheduled transportation, medication management, and light nursing assistance. Some residents may be eligible for financial aid through Illinois’ Medicaid program.

Oak Hill will be operated by an affiliate of Des Plaines-based Pathway Senior Living, which runs 10 other supportive living residents in the Illinois.

The $20 million project was funded largely through Low Income Housing Tax Credits awarded by the Illinois Housing Development Authority, investor proceeds from Hunt Capital Group, and a first mortgage loan through the Federal Housing Administration insurance program, brokered by Draper & Kramer, Inc.

Written by Alyssa Gerace

While the markets in Europe might be on the brink of collapse, across the pond, senior housing is seeing investment continue to grow, primarily from Real Estate Investment Trusts (REITs).

Data released last week at the National Investment Center for the Seniors Housing & Care Industry (NIC) annual event in Washington, DC, shows that $16.8 billion worth of transactions took place during the first half of 2011. Of the deals, REITs have been the dominant buyers, snapping up 93% of the nursing homes, 78% of assisted living properties, and 88% of the independent living properties.

These deals, along with the eventual needs of the 78 million baby boomers in the United States for some type of care, brought 1,800 attendees to the conference.  But even with a record number of attendees, leaders at NIC are still cautious not to get ahead of themselves.

“We’re excited [about the opportunity for seniors housing] but there is a lot of anxiety about the global economy and what the future holds,” said Bob Kramer, president of NIC, during a press briefing. “In terms of our sector, it’s very need driven demand and the demographic drives the senior housing fundamentals.”

The industry remains in its infancy, but NIC is well aware it needs to plan now in order to meet future demand and is looking to groom the best and brightest through its Future Leaders Council.

“[There is] a critical need for this sector to attract talent to the industry,” said Kramer.

Campuses such as Washington State University recently added a Senior Living Management class to its undergraduate curriculum, taught by executives and other professionals from four top senior housing companies that are headquartered locally in Seattle.

NIC is also reaching out to business schools like Wharton to develop programs tailored to the industry, to ensure those coming out of school are attracted to the industry and the growth opportunities it provides.

Even with the new initiatives, NIC’s focus remains on data and making sure investors have the detailed information they require to make investments. In its 21st year, NIC’s overall mission remains dedicated bringing more capital and efficiency to the sector. ”To bring that about there must be transparency,” said Kramer.

Looking at the number of investors in attendance last week, it looks like NIC has succeeded.

Written by John Yedinak

American Realty Capital Healthcare Trust, Inc., recently announced that it has closed on three income-producing properties for $60.9 million, representing the first part of a $68.9 million portfolio consisting of 12 healthcare facilities.

The initial three properties are a multi-specialty medical campus located in Carson City, Nevada, for approximately $29 million; a medical office building in Las Vegas, Nevada, for approximately $22.9 million; and an inpatient rehabilitation facility located in Phoenix, Arizona, for approximately $9 million.

These acquisitions are approximately 92% leased to 19 tenants, with about 11.5% of those tenants having leases that will expire before Dec. 31, 2016, and 32% of tenants with lease terms beyond 10 years from the closing date.

“We are very pleased to be closing on the purchase of these institutional quality healthcare facilities acquired through our direct relationship with the seller,” said Todd Jensen, Chief Investment Officer for ARC Healthcare. “These properties are consistent with our strategy of building a diversified portfolio of healthcare assets leased to strong national and regional operators on a long-term basis. Over half of the revenue is generated from organizations that carry investment grade credit ratings.”

The properties were closed through ARC’s sponsor, American Realty Capital V, LLC.

Written by Alyssa Gerace

Healthcare REITs are gaining steam as a property sector, having raised a total of $22.5 billion in the 18 month period ending June 30, a recent Jones Lang LaSalle report states. And in spite of the scale of the sector, healthcare real estate has only marginal penetration by real estate investors, the company says.

“Interest in healthcare real estate investment has grown over the last two years based on the superior performance of this asset class during the downturn,” said Mindy Berman, managing director of capital markets in Jones Lang LaSalle’s Healthcare Capital markets group. “The asset type has proven recession-resistant and we expect this asset class will continue to outpace all other product types as the strongest real estate sector if the economic malaise continues to plague the United States.”

With the estimated value of all healthcare real estate assets in the U.S. totaling $700 billion, the report states, public REITs hold 15% of the product in the market. “While REITs continue to aggressively acquire healthcare assets, a swell of new investors are maneuvering to purchase healthcare real estate,” the company says.

In terms of the $22.5 billion capital raise, the total comprises $17.4 billion in equity and debt capital, with non-listed healthcare REITs raising an additional $5.1 billion of capital during the same 18 months for a total of $22.5 billion for healthcare REITs.

“This is a disproportionate share of capital raised by healthcare REITs, as compared with non-healthcare REITS, added Joe Euphrat, managing director of Jones Lang LaSalle. “This reflects both a combination of the attractiveness of performance of healthcare real estate and prospective capital requirements that healthcare systems face.”

The top investors in medical properties year to date were the non-listed REITs, Jones Lang LaSalle reports. The three major REITS including Grubb & Ellis Healthcare REIT II, Healthcare Trust of America and American Realty Capital Healthcare Trust acquired 55 properties in total, which is more than a third of all medical office assets trading hands during the period.

Jones Lang LaSalle indicates that healthcare REITs are the top income producing property type among REITs, producing current average dividend yields of 5.3%.

Written by Elizabeth Ecker

Ziegler announced the addition of Rebecca Neth Townsend to its senior living and post acute care banking team based in Arizona.

Townsend will serve as its senior vice president and will focus on sponsorship structures for not for profit senior living and healthcare organizations as well as consulting and advisory opportunities in the space.

“We are honored to have Rebecca join our senior living team,” said Dan Hermann, Head of Investment Banking at Ziegler. “She has gained extensive knowledge of the senior living and healthcare spaces by developing and working within CCRC systems and providers of all types. She will add tremendous value to our team and to the clients we serve.”

Prior to joining Ziegler, she served as senior vice president of Covenant Retirement Communities, a multi-site system comprised of twelve CCRCs in nine states.

During her more than 25-year tenure, she filled a variety of roles in marketing, project and strategic development. She oversaw the concept development and feasibility stages for new locations, expanded locations, expanded services and acquisitions. This included the development of two completed green field CCRCs in Colorado and Michigan, an affordable housing project in Oregon, and the soon-to-be developed rental CCRC in Kansas.

She also was founding president of Covenant Solutions, the project development entity of Covenant Retirement Communities and guided the strategic plan for Covenant Ministries of Benevolence. Prior to her Covenant tenure, Rebecca was a hospital administrator and operations director.

“We’re very excited to have Rebecca join our west coast senior living team as we seek to serve clients through a broad array of advisory and banking services in this dynamic economy and evolving industry,” said Mary Munoz, managing director, Senior Living Finance at Ziegler.

Ziegler is an investment bank that provides a variety of services targeted at the senior living industry.

Written by John Yedinak

It’s often hard for seniors to transition from living at home to entering an assisted living facility, but marketers say it’s important to stress the necessity of the services they offer in order to get people to make the leap sooner rather than later.

“Sales people will focus on benefits of assisted living, and all the ways it can improve the life of the senior,” says Jamison Gosselin, a spokesperson for the Assisted Living Federation of America (ALFA).

The problem, however, is that seniors are often unwilling to give up the lifestyle they’re accustomed to, and the economic crisis isn’t helping, says Jim Janicki, the senior director of marketing for Riverside Health System, located in Virginia.

The poor housing market and adult children worrying about costs—which average $2,575 per month—are two huge factors that delay entry into assisted living facilities, he says.

“We’re seeing people waiting longer to enter assisted living until their health has really become compromised,” says Janicki. “It’s unfortunate, because the sooner they come, the longer they would be able to live independently and enjoy the lifestyle.”

Delaying too long means a shortened stay in assisted living, as residents must transition into facilities better equipped to provide higher levels of care, says Janicki.

“We offer free health screenings from health services staff,” he says. “The nurses can show them (and the adult child) results, and let them know that they’re going to risk being no longer qualified for assisted living.”

When seniors stay for a short period of time, it presents upheaval not just to the resident, but also to the facility, he continues, and this has been happening more and more often.

“Our turnover has increased dramatically over the last couple of years. The average length of stay in ALFs has decreased,” says Janicki. “Then we have to remarket available units more often.”

According to the State of Seniors Housing 2011 report, the median annual resident turnover across all assisted living residences increased to 46.8% in 2010, up from 42% in 2009.

This puts more pressure on everyone, he says, from the marketing people who have to resell the unit, to the sales team who are forced to find a larger volume of leads, to the maintenance crew preparing each unit after turnover.

“We drop an average of $4,000 into a residence for each turnover, plus staff time and costs of marketing, for additional advertising,” says Janicki. “If you look at all that, and figure that increased turnover is going to cost you tens of thousands of dollars each year, we want to do what we can to get people to come to us sooner so we can give them a longer stay.”

Too often, sales staffs spend too much time selling aesthetics—how the ALF appears to prospective residents, says Gosselin. Instead, they should let the amenities speak for themselves, and focus on the services being offered.

“What people don’t understand is, more importantly, the people who are going to be caring for the senior plays into the quality of life for people,” he says. “We as an assisted living community need to explain why people should not wait, and we need to explain it better.”

Written by Alyssa Gerace

It seems that the CLASS Act might be cancelled—possibly permanently—after the program’s chief actuarial lost his job, with the remainder of the office’s eight-person staff likely being reassigned to different jobs, reports the Wall Street Journal.

The U.S. Department of Health and Human Services essentially shut down the Obama Administration’s Community Living Assistance Services and Supports office by disbanding the staff, effective last Friday, Sept. 22, chief actuarial Bob Yee told WSJ. However, he says his understanding is that HHS is “slowing” the program’s development, rather than scrapping it altogether.

Earlier, Yee emailed his colleagues informing them he’d be leaving his position after the HHS’s decision to “close down the CLASS office.”

“I believe I have made a contribution to CLASS to the best of my ability and hope I haven’t embarrassed the actuarial profession too much,” said Yee in the email, contained in a Forbes article.

However, HSS disputes that the office is being closed.

“While the staff of the CLASS office has been reduced, reports that the CLASS office is closing are not accurate,” the HHS statement said, included in the WSJ article. “We are continuing our analysis of this program. As we have said in the past, it is an open question whether the program will be implemented. A CLASS program will only be implemented if it is fiscally solvent, self-sustaining, and consistent with the statute.”

The office’s status remains unclear, though.

“Clearly, all the people are reassigned, I’m leaving, so there’s nobody else except maybe the head of the office,” Yee told WSJ.

The CLASS Act has faced opposition from the GOP as being “financially insolvent,” and its implementation has already faced delays.

Read the Wall Street Journal article here.

Written by Alyssa Gerace

The Paces Foundation recently broke ground for Las Brisas Manor, an independent living community for low-income seniors in Del Rio, Texas. Construction is expected to start immediately, with the community due to open by summer 2012.

“The City of Del Rio is pleased to partner with The Paces Foundation, the Federal Home Loan Bank of Dallas, the Texas Department of Housing and Community Affairs, and Community National Bank, as well as others, to provide the all important basic need of housing for our seniors,” said the city’s mayor, Roberto Fernandez. “During this tough economic time, it is more important than ever to create lasting partnerships for the betterment of our communities.”

The more than $6.4 million in funding for the construction came from several sources, including a $500,000 Affordable Housing Program grant from Community National Bank and FHLB Dallas.

Upon completion, Las Brisas Manor will feature 48 units priced for low-income residents, including 15 one-bedroom units and 33 two-bedroom units, which will come fully equipped with Energy Star kitchen appliances.

“The Paces Foundation built the first Gold LEED certified seniors affordable living home in Georgia,” said Mark du Mas, president of The Paces Foundation. “Las Brisas Manor will be the first project for senior citizens built to Green Built Texas standards. Such sustainable building practices not only reduce our impact on the environment but also significantly drop the utility bills for our residents, which can sometimes take a large portion of their income.”

The foundation, which also built Las Brisas Apartments, a family-oriented affordable housing community located adjacent to the planned senior community, was one of 79 organizations to receive a portion of the $18.5 million in AHP grants awarded in 2010 by the FHLB of Dallas.

Written by Alyssa Gerace