Senior Living News Wire

With the median age rising for entrants into the independent living portion of many continuing care retirement communities (CCRCs), providers are looking for ways to position their communities to attract younger incoming residents.

Positioning communities to attract younger residents boils down to targeting a larger market space, and this can encompass a variety of methods: tweaking or expanding entrance fee refund and monthly payment structures; offering pricing incentives to couples, and integrating more activities with the outside community.

The first step in attracting younger residents is to target couples, says Brian Schiff, Senior Vice President at Greystone Communities. The older half of the couple is 78, on average, he says, while the second age (often the female spouse) is generally a lot closer to 70. 

This goes along with the findings of a study published by Oxford University Press on behalf of the British Geriatrics Society that older women are more likely to enter a senior care facility because they’re often married to older men who are less able to provide care. 

Adjusting pricing for couples

There are a couple methods Greystone Communities has implemented to attract couples, and one of those was to eliminate an entrance fee for the second person in a couple.

In the past, Greystone’s entrance fee structure for couples charged about $300,000 for the first person, and an additional $25,000 for the second. But now, the senior living provider charges just one entrance fee for the unit.

Monthly service fees are another place where couples are “very price sensitive,” says Schiff. Traditionally, both spouses pay a monthly service fee, but the “second” spouse’s fee is lower than the “first.” While there are still fees for both members of a couple, Greystone has shifted the second person’s monthly fee significantly downward. 

The way they’re able to do this is by changing the way healthcare benefits are structured. It used to be that the second person in a couple could pay the same amount after moving into skilled nursing care as she had for independent living—say, $995 a month. Now, Greystone charges both spouses the same amount if they transition into a higher level of care, regardless of whether they’re the “first” or “second” member of the couple.

“If they don’t use [the higher level of care], they don’t incur the expense,” Schiff explains. But if they do, he continues, “We shifted the cost to the time when you use the expensive care, rather than charge them more for when they’re using inexpensive care. Most residents look at it two ways: ‘I’m not going to need the higher level of care;’ or, ‘It’s still a bargain.’”

Entrance fee refund structures

Greystone has also begun offering a variety of different pricing plans. The most commonly used plan is the 90% refund structure, Schiff says, but his company has found a market for lower prices on both entrance fees and monthly service fees.

“We’ve expanded to offer a 50% entrance fee refund plan, which reduces the monthly service fees by 20%,” says Schiff. “This can be very attractive to an income-restrained couple.” There’s also a 0% refund plan, which cuts monthly fees by 30%.

Adding more entrance fee refund structures is a strategy Senior Care Development’s CEO David Reis plans to implement at the Clare, which his company recently acquired in a partnership venture with Life Care Companies and Fundamental Advisors, called Chicago Senior Care.

Chicago-area CCRC the Clare’s independent living units were only about 35% at the time of sale, which Reis says has to do with entrance fee refund contracts that were “off-mark.” 

While the community’s current plan is a predominantly 90% refund structure, Reis says new options will include 50% and 0% refund-of-capital plans, enabling a lower up-front entrance fee he expects will be attractive to incoming residents. 

“It’s all about, ‘How do I broaden my market so I can attract more people?’” says Schiff. 

Written by Alyssa Gerace

Coming soon: Using Programing to Attract Younger Residents into CCRCs 

The Centers for Medicare and Medicaid Services (CMS) released its final rule implementing the Medicaid Community First Choice (CFC) option, but it’s still figuring out what assisted living’s role is in the program.

Community First Choice provides incentive for states to expand Medicaid coverage of beneficiaries in noninstitutional settings where it’s effective from both a health standpoint for patients who want to receive care at home or in the community, and from a cost standpoint for the provider. States that choose to participate in the program are eligible for a 6% increase in their federal Medicaid matching funds.

The CFC rule is final, but the revised definition of ‘home- and community-based settings’ is not final, and CMS will issue another proposed rule seeking public comment on the revised setting definition. 

“While some serious issues remain to be addressed, the new proposed definition of HCBS settings is much more workable than what was previously proposed,” said Karl Polzer, NCAL’s senior director of policy, in a statement.

Many weighed in on the original proposed definition of HCBS settings, with most advocating for the inclusion of assisted living facilities. The comments shows an element of confusion and disagreement regarding the initial definition and what it encompassed. 

“The proposed provisions caused more confusion and disagreement than clarity, and we believe further discussion and consideration on this issue are necessary,” CMS said in the final rule. 

The agency now intends to issue new proposed regulation providing a ‘setting’ criteria for the CFC program, developed in light of all the comments that were received, and inviting additional comments on the revised proposal. 

“Over the past year, NCAL and many other organizations have expressed deep concerns that the definitions of HCBS settings in the proposed CFC rules, as well as proposed rules for the Medicaid 1915(c) program, would prevent most assisted living settings from participating in the Medicaid program, thereby eliminating an important long term care choice for seniors,” said Polzer.

CMS did clarify it intends to propose that HCBS don’t include nursing facilities, institutions for mental diseases, intermediate care facilities for people with mental retardation, long-term care hospitals, or any other locations with the qualities of an institutional setting as determined by the secretary. 

The CFC option is now in full effect; read the final rule here. 

Written by Alyssa Gerace

The Department of Housing and Urban Development (HUD) recently revised a January 6, 2012 provision that had ended the authorization of construction starts prior to a loan commitment for new construction, substantial rehabilitation, and 241(a) projects, which insure mortgage loans to finance repairs, additions, and improvements to healthcare facilities with FHA-insured first mortgages or HUD-held mortgages.

“Having further considered the matter with respect to 241(a) projects, having gained further industry input, and having considered the risk and benefits of 241(a) loans, the Office of Residential Care Facilities has determined that, with respect to 241(a) loans only, we will continue to entertain requests for construction starts prior to commitment,” said HUD in its latest Lean 232 email blast, dated April 30, 2012.

In the email, HUD also restated its right to adjust the Other Program Queue (containing all Section 232 New Construction, Substantial Rehabilitation, 241(a), and 232 Blended Rate applications) to give preference to projects that include Low Income Housing Tax Credits “in order to meet project-specific placed-in-service deadlines.” 

These adjustments are not automatic, HUD clarifies, adding that they’ll be made on a case-by-case basis “appropriate to the subsidy on the project.”

Written by Alyssa Gerace

Terra Firma, a private equity group, announced on Monday its intentions to buy British nursing home operator Four Seasons Health Care for up to $1.34 billion, reports the New York Times. 

The deal terms include Terra Firma paying about $1.32 billion up front for Four Seasons. Then, if the company hits its performance targets, according to the New York Times, the private equity firm will pay an additional £10 million pounds for a total of about £825 million. 

Four Seasons operates 445 nursing homes and 61 hospitals and other healthcare facilities throughout Britain; it has previously been reported that rival nursing home operator Bondcare Group was planning a takeover of the operator, which has reportedly struggled to repay debt after a large acquisition. 

The deal will be financed through Terra Firma’s cash reserves along with new funding provided by Goldman Sachs and Barclays, according to the private equity firm. 

“By investing new equity, Four Seasons’ debt has been very substantially reduced and Terra Firma has brought stability to the company,” Guy Hands, a British financier who runs Terra Firma, said in a statement. “Four Seasons, with a stable capital structure and clear ownership, will be able to lead the sector in terms of quality of service.”

Barclays, Goldman Sachs, and law firm Slaughter & May advised Terra Firma on the deal. Rothschild, Gleacher, Shacklock, Deutsche Bank, and law firm Macfarlanes advised Four Seasons. The deal is expected to close by July 16.

Written by Alyssa Gerace

As assisted living regulations evolve and tighten, Medicare and Medicaid reimbursements fluctuate, and healthcare reform begins to take effect, many states are facing their own challenges as they continue to develop, operate, and implement new rules and programs. Here is a collection of long-term care related stories from across the nation.

From the Des Moines Register—Iowa Senate Bill Proposes Prohibiting Sex Offenders from Nursing Home Placement

“A bill to prohibit sex offenders from being placed in Iowa nursing homes erupted into heated debate today when Iowa Senate Republicans accused Democrats of allowing rapists to continue living next to grandmas,” reports the Des Moines Register. “The proposal comes on the heels of state officials’ removal of an 83-year-old sex offender from the Pomeroy Care Center after he was identified as a suspect last year in the sexual assault of an elderly woman. That offender, William Cubbage, had been ordered to live in the nursing home by a judge after three state agencies agreed it was safe to discharge him from Iowa’s Civil Commitment Unit for Sexual Offenders.” Read more…

From The Leader—Eden Alternative Offers New Paradigm for Elders

“In his novel “Tribes of Eden,” expert on aging Dr. William Thomas uses a family fleeing a totalitarian regime in a collapsed society as an analogy for seniors who must live in conventional nursing care facilities against their will,” reports The Leader. “Thomas, with his wife Jude, as co-founders of the Eden Alternative, believe that a much better life is possible for the elderly.” Read more…

From TimesNews.Net—Ban Lifted on Tennessee Nursing Home Ordered to Pay Daily Fines

“The Tennessee Department of Health announced Wednesday afternoon that the suspension of admissions at Bristol Nursing Home has been lifted,” reports TimesNews.net. “The state had announced in a Monday press release that a $5,800 daily federal fine had been imposed against Bristol Nursing Home and admissions suspended until conditions deemed “detrimental” to residents were resolved. The state also imposed a one-time $3,000 fine. The latest news release states the nursing home, “returned to substantial compliance for state licensing purposes” and that conditions leading to federal immediate jeopardy citations have also been resolved with an approved plan of correction.” Read more…

From the Alliance—Congressional Bill Will Cut $20.3 Million from La. Nursing Homes

“A new Avalere Health analysis detailing the negative impact on the nation’s Skilled Nursing Facilities (SNFs) resulting from so called “bad debt” provisions passed in the Middle Class Tax Relief and Job Creation Act of 2012 finds Louisiana SNFs (more commonly known as nursing homes) will suffer a $20.3 million Medicare funding reduction – the sixth largest cut nationally.” Read more…

From Philly.com—New Jersey Couple Building Local “Village” Structure for Aging-in-Place Seniors

A Moorestown, N.J. couple is laying the foundation for a Village in their community as part of a national effort aimed at helping seniors live independently in their own homes using collaboration and collective community resources, reports Philly.com. Read more about ”It Takes a Village New Jersey.”

From the Florida Agency for Health Care Administration—New Smart Phone App Helps Locate Healthcare Facilities

Florida’s Agency for Health Care Administration recently developed an extension of its consumer tool FloridaHealthFinder.gov: a smart phone application for iPhone and Android users that allows consumers to get information on, locate, and/or receive driving directions to any healthcare facility the Agency regulates.

Consumers can search by license type, county, city, proximity distance, or a combination of these options; the app also allows users to learn about the type and number of beds a facility offers, along with the names of the facility administrator and owner. Access the app here.

In the past 30 years, Capital One has transformed itself from “just” a credit card company into one of the U.S.’s top banks. And as part of its lending arm, Capital One Bank says it has a significant focus on its commercial and specialty finance business, which encompasses senior housing and care lending.

Last Fall, Capital One Bank hired a number of former CapitalSource Inc. team members among other experienced healthcare professionals to form its own group for specialty finance lending—including Keith Reuben, the former president of CapitalSource’s commercial finance business.

Senior Housing News recently got a chance to speak with Reuben, who’s now the Executive Vice President of Commercial and Specialty Lending at Capital One Bank. During the interview, Reuben emphasized his company’s long-time regional presence in the seniors housing and care industry, talked about the sector’s recession-resistant attractiveness, and spoke of Capital One’s focus on the middle market.

Senior Housing News: What prompted Capital One’s return to a senior housing platform?

Keith Reuben: We’ve never been in and out of the senior housing and long-term care industry. The company has always been active in the long-term care and senior housing business. Capital One Bank has been an active player in its regional footprint in the senior housing world: In the Northeast, the Mid-atlantic, and part of the Southwest.

Now, an important part of Capital One Bank’s commercial strategy is to build national specialty businesses such as healthcare. Particularly, we’re focused on industries that are not only growing, but also very recession-resistant, and healthcare, in particular senior housing, is very recession-resistant. We’ve built a national platform which is focused on skilled nursing facilities, assisted living facilities, and CCRCs throughout the country. 

SHN: What made you launch a national platform after having been focused on specific regions?

KR: Part of our strategy was to build a national specialty business in industries that are growing and recession-resistant. History will bear it out from other institutions, how healthcare, and particularly the long-term care and seniors housing, has fared through the downturns: It has fared better than the general real estate and overall traditional business market.

That was part of the reason to go national, because we felt like it was a business that generates appropriate returns for less risk. That’s why we as a group at Capital One have decided to focus on this platform.

SHN: Would you agree that the senior housing pendulum has swung toward construction over acquisitions, and is Capital One involved with new construction?

KR: We have seen an uptick. The whole industry has seen an uptick of new construction. A lot of the building of nursing homes happened about 30 to 40 years ago, so the buildings are older. And it’s not all new construction; there’s also facility rehabilitation.

We do lend to select operators that have both a proven track record and a business plan that we can get comfortable with.

There are different types of new construction: Building a replacement facility, or adding new wing to older facility, presents much less uncertainty as to whether the facility will be able to fill up. Those are easier for banks like Capital One and others to get comfortable with on the new construction side.

Also, excellent operators do feasibility studies that determine if it’s the time, place, and right demand to build a new facility in a specific area.

SHN: Is it easier now, in the current environment, to obtain construction financing than it has been in the past several quarters?

KR: It depends on the operator, and the business plan. In a lot of ways, new construction lending is a different type of lending than lending on stabilized facilities. If there’s a really good plan and a proven track record, it’s definitely more possible.

Overall, it’s hard to say it’s easier [now] to get a loan, because it really is case-by-case. We look at every case separately. The best place to start with a construction loan is typically with a bank that understands the regional dynamics and an operator with a proven track record of operating and opening and building new facilities.

SHN: With most lenders only willing to lend to operators they have existing relationships with, will these standards prevent new players from entering the industry?

KR: I think the industry has lots of very good operators. A lot of times, there are what some people may call “new operators,” but it could be a senior executive from a top-three company who decides he wants to do his own thing and start his own company. That, in my mind, is a proven operator.

In any business it’s hard to start new. That being said, there are going to be really good, new operators that have proven track records in their previous experience. I think it’s going to be important to have a track record—more important than ever—but you’ve always got to have newer people coming in the business, as the business continues to mature. They’ve got to cut their teeth and work for a seasoned company first, then start on either their own, or move over to another company to expand their experiences.

SHN: Would you agree that the mega deals done by REITs last year are done? Are there mostly just small- to mid-sized portfolios left on the market?

KR: You never know when the next large operator will decide to sell. It’s hard to know… I don’t think the REITs are going to redo a bunch of large deals again. I do think this business is incredibly transactional. I would say it’s always been event-driven. I probably wouldn’t predict the same kind of huge numbers we had last year. But I’d be surprised if there weren’t significant deals that happen in the marketplace; I don’t see there being a dearth of significant transactions, or a slowdown in activity. The M&A market seems to be heating up, and I see the nursing home market doing the same thing

SHN: You’re involved with skilled nursing, AL, IL, and CCRCs. Where do you see the biggest growth opportunities? Are you more favorable toward continuum of care models?

KR: We lend to all types of organizations, along the healthcare continuum. We work with hospitals and LTACs, and while we have a particular focus on skilled nursing, assisted living, and CCRCs, we work with independent living operators as well.

What we are focused on is making sure they’re good deals. We lend to all types of organizations throughout; it’s not like we lend to one and not another.

SHN: Do you prefer needs-based property deals over lifestyle?

KR: Our group is more focused on needs-based, where there’s a couple of things: significant growing demand, and barriers to entry as you get higher in the acuity spectrum.

The barriers to entry create a limited supply. On the skilled nursing side, because of these barriers to entry, we feel it’s a good platform in an industry that’s very recession-resistant.

SHN: What is your current loan portfolio mix, and are you looking to diversify? Who or what are you targeting?

KR: As with anything, there’s variation depending on the timing of when deals come in, but we do have a focus on higher acuity. Our platform is almost too young [to talk about looking to diversify the portfolio]. We’re very comfortable in our [regional] footprint; we just rolled out this national lending platform late last year.

We do look at the business nationally. We stay very up-to-date, not only on the Medicare regulations, rules, and reimbursements, but also state-by-state Medicaid reimbursements and regulations.

As you’d expect, we’re very focused on the states that have significant concentrations of nursing homes, like Florida, California, New York, and Texas. 

We’re not really diversifying in terms of Medicaid and Medicare, or private pay. For any of our transactions, they’re deal by deal. The most important thing is who we’re lending to; their plan has to make a lot of sense.

Everyone wants to be diverse, but it’s more deal by deal. 

The long-term care market is very fragmented. When it comes to diversification, you certainly don’t want to have everything with one company. The advantage to this business: there is significant opportunity because it is so fragmented.

Although we do work with some of the large players, we focus a lot more on regional players, the middle-market players. They play a very important part in what we do. It’s very important to us.

We’re very focused on the middle market; the healthcare business in general is a local and regional business. It’s where our experience is, it’s where we’ve seen the best outcomes, and where we’re most comfortable.

Leaders in Washington, DC, are finally starting to realize there is a crisis coming as 10,000 baby boomers turn 65 each day. Earlier this week, Senator Bob Corker (R-Tenn), warned Congress that long term care financing is a major train wreck and is “heading for a national crisis.”

These words came at a Senate Aging Committee hearing focusing on the future of long-term care in the U.S. ”There is no doubt there is a public sector role” in the future of financing long-term care supports and services, Corker said.

Loren Colman, the assistant commissioner of continuing care at the Minnesota Department of Human Services argued that the state has been trying to move care away from institutions and into the home.

“Not that long ago, most people that were served by Medicaid in Minnesota received long-term care services in an institution. Over time, we’ve developed the supports needed to serve people in their own homes and communities,” she said.

In Minnesota, 63% of the older adults who receive Medicaid or Medical Assistance (MA) long term care services, receive that care in their home or community settings.

“Similar to many states, Minnesota is significantly challenged in meeting the anticipated demand for long term care services and supports, especially as the boomers age,” he said.

The state is asking for a Medicaid waiver that would allow it to offer benefits based on the need of the individual, so that they get the right levels of services based on their needs, from lower need to high need.

“We know that the preference of most older Minnesotans is to remain in their home. We want to further empower older Minnesotans to make that choice by making home and community-based services the norm in Minnesota and institutional care the exception.”

Written by John Yedinak

When a nursing facility loses caregivers, it can be a matter of life or death for its residents, according to a study from the Center for Retirement Research at Boston College, reports U.S. News.

While it may seem counterintuitive, nursing home residents are actually adversely affected by stronger economies. That’s because in favorable economic times, nursing homes lose staffers who would prefer to have—and are able to get—other jobs, the article says. In turn, nursing homes with fewer caregivers have higher death rates.

The outlook for nursing homes and caregiving resources in general is sobering. It’s a certainty that rising numbers of aging Americans will need more care in the future. People in their 80s are the nation’s fastest-growing age group. Over this same period, the retiring baby-boom generation will be succeeded in the workforce by much smaller generations of younger workers. The result will be a growing shortage of care providers.

Moreover, government reimbursement rates for some nursing-home services have been cut by Medicare and the industry is under growing financial pressure. Prospects are high for continued curbs on healthcare spending. Accordingly, operators of the nation’s roughly 1.6 million certified nursing beds are looking for efficiencies and ways to streamline services, not add to staffing levels.

The traditional thinking about why death rates increase during strong economies was tied to job-related stress and behavior, the Center for Retirement Research study said. “During boom times, when more people are employed, job-related stress may increase obesity and smoking,” it said. “High employment and long hours on the job also limit individuals’ ability to find time for diet and exercise, causing health to deteriorate.”

Read the full U.S. News article here.

Written by Alyssa Gerace

Ohio assisted living residents give their facilities a higher average satisfaction rating than do nursing home residents, according to the Ohio Department of Aging’s 2011 nursing home and residential care facility resident satisfaction surveys.

Residents in Ohio nursing homes gave an overall satisfaction score of 87.1%, while individuals in assisted living facilities averaged a 92.33% satisfaction rating.

Grace Brethren Village, a residential care facility in Englewood, Ohio, topped the list with a 100% resident satisfaction score. Other assisted living communities to receive top rankings include Patriot Ridge Community in Fairborn, with a near-pefect 99.7% rating, and Browning Masonic Community, Inc. in Waterville, at 99.2%.

For nursing facilities, Otterbein North Shore in Lakeside got top marks with a 98.65% rating, followed by Mother Margaret Hall Nursing Home in Mount Saint Joseph, at 98.45%, and Salem Community Hospital’s skilled nursing facility in Salem, with a 98.02% score.

“Ohio has taken a national lead in advocating for, and helping long-term care facilities achieve real culture change and provide the high-quality, person-centered care their residents desire and deserve,” said Bonnie Kantor-Burman, director of the Ohio Department of Aging, in a statement. “Staff, administrators, residents and their families are more interconnected than ever, and the caliber of care is improving as a result.”

Two dozen nursing homes and 34 assisted living facilities got a score of 100 on key questions of “Overall, do you like this facility?” and “Would you recommend this facility to a family member or friend?”

The rankings come at a time when quality indicators are beginning to have a much heavier impact on nursing home payments. The amount of Medicaid reimbursement a nursing home can get that’s tied to quality achievements will rise from 1.7% to 9.7%, with satisfaction survey results used to determine eligibility for three of the new measures nursing homes are required to reach.

View the Top 25 rankings here, or the individual nursing home and residential care facility surveys.

Written by Alyssa Gerace

Canadian Leisureworld Senior Care Corporation (TSX:LW) entered acquisition agreements on April 26 to buy three luxury retirement residences in the Greater Vancouver Area in British Columbia for an aggregate purchase price of $119.8 million, including a mark to market on assumed debt and excluding a performance-based earn-out of up to $6 million.

Two of the residences, located in South Surrey, BC have a total of 257 residential suites; the third, located in Port Coquitlam, BC has 135 residential suites.

Pacifica Resort Retirement Living consists of two connected four-story buildings with 175 total suites, 130 of which are being purchased. The suites are broken into 60 condominium suites, 15 of which are being purchased, while the remaining 45 are owned by third parties. Residents in those third-party suites will be able to purchase services and utilize Pacifica’s facilities for a monthly fee. Out of the 130 purchase suites, 90 are designated as independent living, and 40 are assisted living. The current occupancy rate is 96%.

Peninsula Resort Retirement Living is a six-story building with 127 suites; 92 are independent living, and 35 are assisted living. It has a current occupancy rate of 93%.

Astoria Resort Retirement Living is a four-story building with 135 suites, 110 of which are independent living, and the remainder assisted living. Astoria is currently in a lease-up phase with a 59% occupancy. 

In conjunction with the transaction, Leisureworld has also agreed to sell, on a bought-deal basis, $49 million of subscription receipts for $12.05 per receipt.

Leisureworld considers the purchase a strategic entry point into British Columbia’s seniors’ living market; the acquisition diversifies the company’s portfolio of retirement and long-term care homes and increases its asset base by approximately 16%.

“We are focused on establishing Leisureworld as a leading provider of facilities and services across the continuum of seniors’ living in Canada. This acquisition represents an important step for us as it both expands our retirement residence portfolio and extends our presence outside Ontario,” said David Cutler, President and Chief Executive Officer of Leisureworld, in a statement. “We look forward to establishing our presence in the attractive British Columbia seniors’ living market with three first-class retirement residences. Further, the transaction is consistent with our commitment to make acquisitions that are accretive to AFFO, to further support our shareholder dividends.”

The three residences, which are all relatively new, will continue to be operated by an experienced team after the acquisition closes; the existing corporate management team of the vendors will continue to manage the newly-acquired residences for one year to ensure a smooth transition and efficient integration of the portfolio into Leisureworld’s business. 

The vendors of two out of the three residences are entitled to earn up to an additional $6 million, in aggregate, depending on how the buildings perform in the next year.

Leisureworld estimates the portfolio’s purchase price implies a 7.48% cap rate on stabilized NOI. The acquisition is expected to close on or around May 23, 2012. 

Financing the Acquisition

As previously mentioned, Leisureworld plans to sell 4.07 million subscription receipts on a bought-deal basis for $12.05 per receipt to help finance the acquisition and transaction costs. They will be sold to a syndicate of underwriters led by TD Securities, Inc. for gross proceeds of $49,043,500, and the underwriters will have an over-allotment option to purchase up to an additional 610,500 subscription receipts at the same offering price, which they can choose to do in whole or in part no later than 30 days after the offering closes. If exercised in full, this would increase the gross offering size to $56,400,025.

The proceeds from this offering will be deposited in escrow depending on when the acquisition closes. If it closes on or before July 31, 2012, then the escrowed proceeds from the offering will be released to the company and be used to pay a portion of the purchase price of the acquisition. However, if Leisureworld doesn’t close on the portfolio by July 31, 2012, or if the transaction is terminated at an earlier time, then the gross proceeds and pro rata entitlement to interest will be paid to the holders of the receipts. 

A portion of the portfolio’s acquisition price will be covered with the assumption of an existing mortgage secured by one of the acquired residences. The mortgage has an outstanding balance of $23.6 million with a fixed interest rate of 5.18%; it matures in 2017. Leisureworld has also gotten a commitment letter from a Canadian chartered bank to provide a $26 million two-year loan and a $26.1 million one-year loan to finance the remainder of the portfolio purchase price and costs associated with the transaction. Each of the two loans will have a floating interest rate equal to the bankers’ acceptance rate, plus 187.5 basis points.

Leisureworld plans to review its options about getting long-term debt financing to replace these loans, including the possibility of obtaining Canada Mortgage and Housing Corporation-insured mortgages.

Written by Alyssa Gerace

The 60+ demographic is blowing up on a global scale and will encompass two billion people by 2050, according to United Nations data, and nearly 440 million of those people will be found in China.

The scope of this growth is unprecedented, and with a senior living sector still in the early stages of development, it represents huge opportunity for American operators, investors, and developers to branch out and venture abroad into the “Middle Kingdom.”

Similar to the U.S. and India, China’s senior population is already significant—and still growing. As of 2011, China’s 60+ demographic numbered more than 172 million; in less than 10 years, that number is expected to balloon to nearly 241 million.

In recent months, there’s been a flurry of activity in the Chinese health care space to develop more models of senior housing and care to prepare for the influx of elders who will need—or want—retirement accommodations. And while breaking into a foreign market is no easy feat, there’s plenty of opportunity for knowledgeable American players to get a piece of the action.

China already has both government- and privately-owned nursing homes and elder care services, but demand is growing for an expanded senior living service segment, with communities that offer a higher standard of living along with high quality medical and nursing services and lifestyle options, according to Michael Qin, a lawyer with Shanghai-based Co-effort Law Firm.

The Regulatory Environment

Qin advises foreign investors and developers to have a basic knowledge of the Chinese regulatory environment before moving into the senior care industry, as the general rules for running any business—including those for contracts, employees, and taxes—are similar in most aspects to those for running a senior care business.

However, it’s a “headache” to explain a “systematic” regulatory environment, says Qin.

“Some regulations are only under discussion or drafting, and most of the current ones are very broad and general, resulting in different practices and interpretations from local authorities,” he says.

The two most important areas to be aware of are real estate and senior care/medical services, Qin advises.

In 2006, China implemented a restrictive policy on foreign investment in real estate, according to the lawyer, which makes real estate investment procedures subject to several government approvals. Additionally, there are other requirements and restrictions on land acquisition, foreign currency loans, and investment amounts, he warns.

Apart from that, the many basic laws and regulations surrounding real estate development, leasing, and construction are ones that many investors and developers should already know, Qin says.

American Operators Leading the Overseas Charge

Last September, Seattle, Wash.-based Emeritus Senior Living announced its joint venture with Columbia Pacific Advisors to form Cascade Healthcare, which became the first foreign entity to gain permission from the Chinese government to open a for-profit senior care community in China.

Columbia Pacific Advisors’ principal investor, Dan Baty, has previously called the need for senior care in China “staggering,” and Serena Xie, a Shanghai native who is now the managing director of Cascade Healthcare, says there are “tremendous opportunities” for companies such as her own to develop the country’s senior care model.

China’s senior living market is still at its infant stage, she says, and with its citizens’ income going up significantly, entering a “decent” community with international standards has become an acceptable option. Additionally, today’s Chinese working class is busier than ever, with no time to spare for taking care of aging parents, says Xie.

Barriers to Entry

The language barrier and finding—and competing for—the right talent to both develop and work in a senior living community could be potential issues, Xie warns.

And although India’s government recently removed restrictions on foreign construction development, the same isn’t true for China.

“Barriers to entry for senior living development that entails construction are a Byzantine approvals process and a nearly impossible land acquisition process,” says Bromme Cole, a managing partner at Hampton Hoerter, a leading senior care advisory firm in China.

Qin, the Shanghai-based lawyer, elaborated more on the lengthy time frames for getting approval on certain types of development.

“Usually, a permit to open a senior living community goes through four approval [processes] from different authorities: the Commercial Bureau, Commerce and Industry Administrative Bureau, Civil Affairs Bureau (on an institutional senior care facility), and Health Bureau (if skilled nursing or medical service are provided inside facility),” he said.

And if each step of this normal procedure is followed, the process can take more than a year. But in what Qin calls a “lucky situation” in China, “Regulators give a very unclear definition on senior care development, which makes most of the cases more simple—investors can only go through the first two steps, which normally only takes a couple of months to obtain license to do business on caregiving and health consulting.”

He says most foreign investors and developers are currently starting with those first two steps for senior living (rather than care) models, before considering the addition of skilled nursing or medical and rehabilitation services.

Opportunity for Foreign Players

While independent or “lifestyle” developments (i.e., projects that won’t be providing health care services) don’t have as much of a barrier compared to more complex care services projects, aside from the process of obtaining available land and approvals, “every developer in China is onto this game,” says Cole.

That leaves the assisted living and sub-acute care sector wide open for development, and the opportunities for foreign senior living developers in this space are “significant” and “numerous,” he continues.

“The more acuity a developer offers, the more immune you are to competition in China,” Cole says.

Partnering Foreign Experience with Local Knowledge

There are still “enormous” barriers to the higher-acuity sector because it’s still so undeveloped. In fact, echoing what Qin said about a lack of consistent, comprehensive regulations for the senior care industry, Cole says it’s a little-understood business without a meaningful amount of care expertise.

Still, higher acuity developers have an easier time with real estate issues in China, Cole says, because arranging long-term rentals of buildings, or renovations for nursing capacities of existing structures, is much easier than new development.

Partners can be “a minority partner as the permits required for renovation are much easier to obtain,” says Cole.

Entering into a joint venture with a local player could be a solution, but even that requires serious consideration.

“Lifestyle developers or independent living developers must be very careful. If a Western developer embarks into real estate development single-handed, then the likelihood of success is low; real estate development is an insider’s game in China,” he says. “A partner is highly advised but also carries serious risks that cannot be overstated.”

Written by Alyssa Gerace

This article is sponsored by the Assisted Living Federation of America (ALFA) as part of its efforts to advance excellence and explore topics impacting the future of senior living. For more information about ALFA, visit www.alfa.org.

Happy belated Earth Day…..This installment of Movers and Shakers may not be Platinum LEED certified but it’s as environmentally friendly as that low-emission VOC.

Looking for new seeds to plant in your organization?  Try our senior housing jobs board where you can post a job for 60 days for $50.

For those seeking greener pastures, there are hundreds of jobs available across the USA.  Don’t wait to find out what kind of opportunities exist for careers in senior living.  Check out our job board today.

Some recent job postings on the Senior Housing News job board include:

Director of Sales – Mather Lifeways

Sales and Marketing Director – Arbor Glen

Senior Living Analyst – Cushman & Wakefield

Financial Analyst – ARA National Seniors Housing Group

Post your senior living job today!

Integrated Senior Living Names Larmer Regional Director of Sales and Marketing

Integrated Senior Living (ISL), a senior housing management company, has named Terri Larmer regional director of sales and marketing. Larmer joins ISL from American Baptist Homes of the West where she served as regional health center sales manager and director of sales in marketing for seven years. Previously, she served as corporate marketing director for Barnes Dyer Marketing and also served as advertising and marketing director for Viscom, Inc.

Erickson Living Promotes Landreville to Associate Executive Director for Riderwood in Silver Spring, Md.

Erickson Living has promoted Jean Landreville to Associate Executive Director for Riderwood located in Silver Spring, Md. She joins Riderwood after serving as the Renaissance Gardens extended care neighborhood Administrator for Fox Run, an Erickson Living -managed community in Novi, Mich.  Landreville began her Erickson career more than six years ago, serving first as the Assistant Executive Director before she opened the Fox Run Renaissance Gardens as its first administrator.  In this role, she helped create one of the finest and most reputable health care facilities in the state of Michigan.

Landreville graduated from Madonna University in Lavonia, Mich, with a BS in Dietetics. She is currently seeking her MA in the Management of Aging Services program at the Erickson School at the University of Maryland, Baltimore County. She holds a Nursing Home Administrator’s license from the State of Michigan and has been a nursing home administrator for more than ten years.  She currently serves as Treasurer of the Michigan Chapter of the American College of Healthcare Administrators.

Oak Grove Capital Names Kelleher to Lead the Firm’s FHA Platform

Oak Grove Capital has announced that Brian T. Kelleher has joined the St. Paul-based firm and will open a Columbus, Ohio office. Kelleher will be responsible for the firm’s FHA Platform and will lead its growth by establishing new offices and adding experienced team members nationwide. Kelleher has been involved with FHA, Fannie Mae and Freddie Mac financing for over 23 years. Previously, he was Chief Financial Officer for AMI Capital, Inc., a Bethesda, Md.-based FHA and Fannie Mae lender. More recently, Kelleher was with Red Capital Group in Columbus, Ohio, serving in various senior management roles.

Brookdale Senior Living Senior VP Named Jeremy Bloom’s Wish of a Lifetime Foundation Board Chair

Joska Hajdu, senior vice president of dining services for Brookdale Senior Living, has been named chairman of the board of Jeremy Bloom’s Wish of a Lifetime Foundation, a nonprofit organization dedicated to granting life-enriching wishes to older Americans. Hajdu has been with Brookdale for nearly 20 years and is responsible for overseeing all aspect of dining services operations for the company nationwide. A native of the Netherlands, Hajdu began his career as executive chef at The Hallmark on Lake Shore Drive in Chicago. Prior to joining Brookdale, he was employed by Classic Residence by Hyatt as Director of Food and Beverage.

Software Veteran Mike Seashols Appointed G5’s Executive Chairman of the Board

G5 has announced the appointment of Mike Seashols as Executive Chairman.  Mike joins G5 with more than 30 years of experience as an executive in the software industry and has been instrumental in the growth and IPOs of several of the software industry’s leading companies, including Documentum and Oracle Corporation.  In addition to serving as Oracle’s first Vice President of Sales and Marketing, Seashols held the position of CEO at Avolent (eBilling), Documentum (Content Management), GoldenGate Software (Database Synchronization), Versant (Object Database), and Evolve Software (Staffing Optimization). Seashols also serves as Chairman of NetBase, a leading social media sentiment analysis software company.

Bayview Manor Retirement Community Welcomes New CEO

Bayview Manor Retirement Community has announced Mary Cordts as their new CEO and Nursing Home Administrator. She takes over for long-time administrator, Rich Tomlinson, who stepped down to pursue his own retirement plans. Cordts’ previous position was the Regional Director for Ecumen, including the duties of executive director of Ecumen’s Parmly LifePointes, a senior housing and community service campus located in Chisago City, Minnesota. She has had over 25 years of experience in these fields, ranging from hands-on health care to senior living administration and planning.  Cordts began her career as a Licensed Practical Nurse (LPN), later becoming a Registered Nurse (RN) and then a Nursing Home Administrator for senior facilities. She has had over 25 years of experience in these fields, ranging from hands on health care to senior living administration and planning.

Prudential Mortgage Capital Company Hires Casey Moore

Prudential Mortgage Capital Company has announced that Casey Moore has joined the company as a principal on the seniors housing originations team.  He joins Thomas Goodsite, principal, and Karen McGinnity, director, who currently lead Prudential Mortgage Capital Company’s seniors housing lending platform.  Moore is based in the company’s Boston office. Moore spent 10 years as a senior managing director with Red Capital, originating more than $1 billion in loans to finance seniors housing and long-term care facilities. Earlier, he was senior vice president for Health Care Lending at Washington Mutual Bank/Bank United.  Moore earned a bachelor’s degree from the University of North Texas and an MBA from Boston College.

Presence Health Announces Connie March as New Head of Continuum of Care

Resurrection Healthcare and Provena Healthcare, now joined as Presence Health, has appointed Connie March as President and CEO of its Continuum of Care. March has served as the head of the continuum of Provena Health and its predecessor organizations since 1985, leading their operations in both Illinois and Indiana.  A former Geriatric and Adult Nurse Practitioner, March has authored several articles and books pertaining to long-term care, and has worked in the field of geriacs for most of that time holding various clinical, educator and administrative roles.  March serves on The Joint Commission Board, Illinois Catholic Health Association Board, Life Services Network Board and Northern Illinois University School of Nursing Advisory Board. She previously served on the LeadingAge Board, a national association for senior care providers, and the Catholic Health Association Board.

Isle at Watercrest–Mansfield Names Smith as Director of Nursing

Isle at Watercrest–Mansfield recently named Jana Smith director of nursing. Smith has been a successful long-term care nurse consultant for more than 20 years. She joins Isle at Watercrest–Mansfield from Fort Worth Center of Rehabilitation where she served as director of nursing. Smith also served as a regional nurse consultant for 7 facilities under Trisun Healthcare. Previously, she served Senior Living Properties as director of nursing in a 120-bed facility.

Querencia at Barton Creek Names Weyand Associate Executive Director

Querencia at Barton Creek has named Nate Weyand associate executive director. Weyand joins Querencia from South Carolina, where he served as director of The Cliffs Communities.  Prior to joining The Cliffs Communities, Weyand served as the nursing home administrator for The Goodman Group, managing a 120-bed skilled nursing center in Florida. Weyand received a bachelor’s degree in health care administration from Carson-Newman College and will soon complete his MBA coursework from North Greenville University.

Integral Senior Living Names New Chief Operating Officer

Integral Senior Living (ISL) has announced that Collette Valentine has been promoted to Chief Operating Officer for ISL. In her new role, Valentine will provide strategic direction and oversight for all the day-to-day operations and marketing for ISL and its 49 communities as well as oversee new development. Valentine came to ISL in 2010 as the Vice President of Operations and Marketing.  Prior to joining ISL, Valentine was with Merrill Gardens for four years, serving most recently as Vice President of Operations. Prior to which she was with Atria Senior Living Group as a Regional Vice President of Operations. Throughout her eight year career at Atria, she held a variety of positions including: Divisional Operations Specialist, Regional Director of Operations, Regional Sales and Marketing Director, as well as Executive Director and Community Sales Director at an Atria/ARV community.  She began her career with Harrah’s Entertainment as a Hotel Sales Manager.  She is a graduate of the University of Nevada, Las Vegas with a degree in Business Management and is RCFE certified.

Dr. Richard Birkel to Lead NCOA’s Center for Healthy Aging

The National Council on Aging (NCOA) has announced the promotion of Dr. Richard Birkel of Washington, D.C., to Acting Senior Vice President, Healthy Aging & Director of NCOA’s Self-Management Alliance. Dr. Birkel has been a public health activist and an advocate for families living with chronic illness and disability for more than 30 years. He is a national expert on long-term care, family caregiving, and the implementation of evidence-based practices in health and mental health systems. At the Center for Healthy Aging, Dr. Birkel will lead NCOA’s efforts to encourage and assist community-based organizations serving older adults in developing and implementing evidence-based health promotion/disease prevention programs. Prior to coming to NCOA, Dr. Birkel served as Chief Executive of the Rosalynn Carter Institute and held the Pope Distinguished Chair in Caregiving at Georgia Southwestern State University. Dr. Birkel received his B.A. from Yale and a Master’s in Public Administration and Doctorate in Psychology from the University of Virginia.

Lifespace Communities Names Regional Director of Sales and Marketing

Ann Runkle has joined Lifespace Communities, Inc. as a regional director of sales and marketing. Runkle will oversee marketing and sales operations at six senior living communities in the Midwest. She is a graduate of the University of Illinois in Urbana-Champaign, Ill., where she earned a Bachelor of Science degree in psychology.

Nancy J. Ulanday Named Director of Health Services for Winchester Gardens

Nancy J. Ulanday, RN, MSN, APN, LNHA, has been named Director of Health Services at Winchester Gardens, a continuing care retirement community in Maplewood, New Jersey.  Ulanday is responsible for overseeing all health-related services and managing the community health care staff for independent and assisted living residents and those with special care needs. Prior to joining the community, Ulanday was associated with the Bergen County Health Care Center, serving  in varied management capacities, most recently as Acting Administrator (2011) and Assistant Administrator since 2005 of the Rockleigh (N.J.)  Center. She also served as Wellness Director for the Bergen County Housing, Health and Human Services Center in Hackensack (N.J.).

Previously for Care One, a premier health care company in New Jersey, she served as Clinical Service Coordinator for Pine Rest, a 120-bed nursing home at Paramus (N.J.) and for two assisted living communities, Cupola at Paramus and Morris Assisted Living at Parsippany, as well as Director of Health Services at the Paramus community. She received her Bachelor of Science degree in Nursing from Roberts Wesleyan College in Rochester (N.Y.) and a Master of Science in Nursing as a Clinical Specialist in Primary Health Care of the Aged from Seton Hall University (N.J.). Her current certifications include those as a Gerontological Nurse Practitioner and as a Clinical Nurse Specialist from the American Nurses Association where she continues active membership and is certified in Advanced Nursing Administration.

Cox Named Director of Sales and Marketing for Delray Beach Senior Living Community

Abbey Delray, a not-for-profit senior living community owned by Lifespace Communities, announced Constance Cox as its director of sales and marketing. Cox brings more than 20 years of leadership experience, including positions in the field of senior living. Cox’s experience in the field of senior living prior to joining Abbey Delray include positions with the Alzheimer’s Association, Erickson Communities and most recently, Franciscan Communities, where she served as sales and marketing director.

California Assisted Living Association Names Atria Executive Director “Advocate of the Year”

The California Assisted Living Association (CALA) has announced that Atria Tamalpais Creek Executive Director John Zikmund has received the group’s prestigious “Advocate of the Year” award. Zikmund was recognized for his leadership in building relationships with and educating state and local officials and others on key industry issues. In addition, Zikmund worked to protect the independence of older adults residing in assisted living communities throughout the state by working with aligned groups to clarify important dementia care issues. Zikmund has inspired others involved with the assisted living industry to participate in advocacy efforts as well.  As executive director of Atria Tamalpais Creek, Zikmund manages and oversees the daily operations of the senior living community as well as the sales and marketing initiatives.  Zikmund resides in Napa, California and has been working for Atria for over three years.

Benchmark Senior Living Announces President & COO

Stephanie Handelson has been promoted to President and Chief Operating Officer of Benchmark Senior Living. Handelson joined Benchmark in April 2009 as Chief Operating Officer. Under her leadership as COO, Benchmark has achieved an increase in occupancy of six percent, from 89 percent to 94 percent, and an increase in NOI from $58 million to $77 million.

The board heard testimony on the six-story facility the Fountain Square Development … which is being spearheaded by Montclair Partners. Steiner went through a detailed explanation of the site engineering he believed would …

He expects that the REIT’s volume will be about one-third of the level it saw in 2011, roughly $300 million. Respondents are slightly more optimistic that independent living/ properties will experience the greatest …

says Hegarty. He expects that the REIT?s volume will be about one-third of the level it saw in 2011, roughly $300 million. Respondents are slightly more optimistic that independent living/ properties will experience the greatest …