Senior Living News Wire

This is a follow-up to Part 2 of a multi-part series exploring the question, “Will the Nation Go Broke Paying for Senior Housing & Long-Term Care?” Check out parts one and three.

While some states are making use of Medicaid waivers to create “affordable” assisted living models, there’s industry consensus that the concept of affordability probably isn’t viable in assisted living facilities.

“It’s a very difficult thing to accomplish, to make a meaningful difference in the cost of assisted living without compromising the service,” says Tom Grape, chairman and CEO of New England-based Benchmark Senior Living.

The only real way to provide truly affordable assisted living is with a reimbursement or grant of some form from the government, he says.

“There’s no way to offer it without some payment from an outside source, and I don’t think that’s going to happen in the near term,” Grape told SHN.

He broke down the economics of an assisted living community: Roughly 70 cents of every dollar goes toward operating costs, another 20 cents goes to mortgage or debt services, and the remaining 10 cents is left for cashflow.

“Someone could give you the building for free, and it would reduce costs by 20%. But once you start chipping away at 70% of operating expenses… you can chip away at the margin, but you still have to provide three meals a day, and all the other basic services,” he said.

And until there’s some sort of government waiver program set in place, residents often end up relying on their families to “chip in,” Grape said.

“The long-term solution that is best for the country is an expanded long-term care insurance product, whether publicly or privately sponsored, but I don’t think a new large-scale reimbursement program from the government’s likely, so I think the situation will likely remain as is for most of [the next 10 years].

Andrew Carle, a former senior living administrator and the founder and executive in residence of George Mason University’s seniors housing administration program, agrees wholeheartedly with Grape. He’s done extensive research on the topic of technology and its role in senior care, including how it can help senior living facilities reduce costs and become more efficient.

Despite the possibility of using technology to cut costs, it’s not enough to constitute affordability.

“There are fixed costs that you can’t do anything about,” he says. “There’s an opportunity to make things more affordable, but not actually affordable with technology.”

He says that some of those currently using various technological developments in their senior housing communities are actually the county-run, low-income senior housing organizations.

This is because they don’t have a business interest in ancillary revenue, says Carle.

In general, while it’s possible to make facilities “more” affordable and efficient, he says, there will probably never be a truly affordable model because at a certain point, it’s just not possible to trim costs any further.

Written by Alyssa Gerace

On Feb. 3, Health Care REIT, Inc., (NYSE:HCN) closed its acquisition of Belmont Village Sabre Springs LP, an assisted living facility located in Scottsdale, Ariz., for a purchase prices of approximately $67.5 million.

The 176,379-square-foot building is located at 13075 Evening Creek Drive S., and follows the Ohio-based Health Care REIT’s November acquisition of a California assisted living facility, Belmont Village Senior Living.

The REIT’s real estate portfolio is valued at more than $13 billion and includes senior living communities, medical office buildings, inpatient and outpatient medical centers, and life sciences facilities.

Written by Alyssa Gerace

The Ensign Group, Inc. (Nasdaq:ENSG) announced on Feb. 3 that it acquired an assisted living facility located in Reno, Nevada, effective Wednesday, Feb. 1, 2012.

Park Place Assisted Living is a 60-unit facility that has an occupancy rate of approximately 45% at time of acquisition. Ensign expects it to be operationally accretive to earnings in 2012.

“We are excited to extend our footprint in the well-regarded Reno healthcare community,” said Christopher Christensen, Ensign’s president and CEO, in a statement. “This opportunistic acquisition adds assisted living services to the skilled nursing and rehabilitative services we are currently providing at Rosewood Rehabilitation Center, a 99-bed facility we acquired last month, and further enhances Ensign’s operating synergies in this market.”

The purchase was made with cash, and brings Ensign’s portfolio to a total of 103 healthcare facilities, 78 of which are Ensign-owned, three hospice companies and four home health businesses in 10 states.

Written by Alyssa Gerace

Most salaries for those working in assisted living facilities rose from 2010 to 2011, and did so universally for those with management positions, according to the 14th annual Assisted Living Salary & Benefits Report, published recently by the Hospital & Healthcare Compensation Service (HCS).

The national average salary of an assisted living facility’s director of marketing rose slightly in 2011 compared to the previous couple years, HCS data shows.

Source: Hospital & Healthcare Compensation Service

A closer analysis reveals an average annual salary of $46,872 for directors of marketing, with an average bonus of $9,354—nearly 20% of the salary.

Salaries rose 3.31% for CEOs/Presidents, and nearly 2% for assisted living administrators.

More than 1,700 assisted living facilities participated in the study, providing compensation data on nearly 65,000 employees nationwide.

Written by Alyssa Gerace

Senior Living Investment Brokerage, Inc., based in Glen Ellyn, Ill., announced on Feb. 3 that it recently brokered the sale of 13 senior living properties across nine states.

The total value of the nine transactions was $55,436,000.

“Due in large part to the historic lows in interest rates and improved access to financing, acquisition activity for senior living properties nationwide continues to gain momentum,” said Grant Kief, president of the brokerage firm, in a statement. “Investors are increasingly gravitating toward the consistent performances and steady returns for  skilled nursing centers and seniors housing.”

The transactions include:

• Three independent/assisted living communities located in Washington, Sterling, and Pekin, Ill., for a total of 186 units that were 96% occupied. These Class A seniors housing properties were built between 2007 and 2009, and sold for a total $30.75 million; an operating company affiliated with the seller will continue to manage the sites.
• Windcrest Alzheimer’s Care Center, in Abilene, Tex., and Wesley Woods Alzheimer’s Care Center, in Waco, Tex. Both skilled nursing centers have 120 beds and were purchased for $14.2 million but a publicly traded real estate investment trust; the seller is a not-for-profit organization based in Austin, Tex.
• A 142-bed skilled nursing center, 25-bed inpatient rehabilitation facility, and administration/medical office building on a 12-acre site in Daphne, Ala., sold by a local not-for-profit organization for $10.55 million to a buyer who operates a large portfolio of healthcare assets nationwide.
• Stone County Nursing and Rehab, a 97-bed skilled nursing center, and Stone County Residential Care Center, a 32-bed residence, both located in Mountain View, Ark. The two properties were sold by White River Health System to a national operator for $4.2 million and had a combined occupancy of 92% at the time of sale.
• North Roanoke Assisted Living, a 142-unit residence in Roanoke, Va. The facility, located on 18 acres of land, was recently renovated and sold for $3.5 million to a local operator. Approximately 80% of the facility’s revenue comes from state reimbursement, which impacted the sales price and cap rate.
• Rose Court Senior Living, an assisted living and memory care property in Phoenix, Ariz. This property was sold in foreclosure by a Detroit bank to The Ensign Group for $3,225,000. More than 80% of the facility’s revenue comes from Medicaid.
• Creekside Senior Living, an independent/assisted living community in Green Bay, Wisc. This senior living residence defaulted on its loan in 2006 and was court-appointed a receiver who oversaw the repositioning of the property, which was about 75% occupied at the time of sale to SABRA REIT. It sold for $2.6 million and will be operated by Pathway Senior Living.
• A 40-bed assisted living property located in Saint Ann, Mo. which sold for $1.2 million to a local operator. The facility was originally built in 1984 as a short-term rehabilitation facility, but was converted to assisted living.
• Family Care Center, a 29-bed skilled nursing center in Fairland, Ok., which sold for $561,000 to a regional owner/operator from Texas. It was previously family-owned and operated.

Written by Alyssa Gerace

CLW Health Care Services Group recently represented a national healthcare REIT in the sale of Brantleys Assisted Living, located in Milledgeville, Ga.

The 40-unit senior housing community was built in 1987, with additions in 1989 and 1993. It is licensed for 48 beds.

Senior Living Management Corporation, a senior housing operator and developer with communities throughout the Southeast and Pennsylvania, is the buyer. SLM will operate the property under the name Savannah Court of Milledgeville.

Written by Alyssa Gerace

The Department of Health and Human Services recently drafted a plan to address the nation’s growing Alzheimer’s problem, but its framework fails to fully acknowledge the role of assisted living in caring for those with the disease, the Assisted Living Federation of America (ALFA) recently pointed out.

In response, ALFA is campaigning that assisted living’s role be mentioned and included more fully in the National Alzheimer’s Project Act’s goals and strategies. The HHS is accepting comments on its Draft Framework for the plan through Feb. 8, 2012, and the assisted living group has submitted a comment letter with some suggestions and recommendations.

Among the suggestions is adding licensed assisted living communities to the list of possible care settings to which individuals may be transferred after hospitals, along with including or mentioning assisted living in other areas of the framework.

“We were shocked that assisted living was not included as a setting [for] serving individuals with Alzheimer’s disease,” said Maribeth Bersani, senior vice president of public policy at ALFA. “We are a provider. We have companies that specialize in dementia-only care, and others who provide it with assisted living. We’re the leading consumer choice for the elderly, so it was just startling to us.”

A significant portion (42%) of assisted living residents have Alzheimer’s, according to the 2010 National Survey of Residential Care Facilities conducted by the Center for Disease Control’s National Center for Health Statistics, and ALFA says it expects this trend to continue as “many consumers prefer the state of the art programming that has been developed for memory impaired residents in assisted living.”

“The omission of assisted living is completely unacceptable,” ALFA said in a statement, urging others to also submit comment to correct the omission before the national plan is finalized.

“We hope to rectify that [omission], though,” Bersani told SHN, adding that the organization recognizes that this has been a draft, and not the final framework. “We have confidence that they will correct this.”

View ALFA’s comment letter here.

Written by Alyssa Gerace

Chelsea Senior Living, LLC, an assisted and independent living community operator with communities located in New Jersey, Pennsylvania, and New York, recently expanded its Northeastern presence with a New Jersey acquisition.

The operator acquired senior residence Van Dyk at Bald Eagle Commons for an undisclosed sum, and has since renamed the community the Chelsea at Bald Eagle.

“Van Dyk has successfully operated this wonderful facility for many years,” said Roger Bernier, president and chief operating officer of Chelsea Senior Living, in a statement. “We’re fortunate to be able to assume operations of such a well run community in this very scenic locale.”

Kevin Seidel is now the community’s executive director, after filling this role at the Chelsea residence in Montville.

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

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

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.

Of more than 38,000 assisted living communities across the nation, Caring.com sought to find the best facilities based on popular consumer vote. The site designated 119 communities “Caring Stars” of 2012 in recognition of service excellence, with the results announced this week.

Across 24 states, the communities received the designation based on a yearlong compilation of consumer ratings and reviews. The results were tallied in December 2011.

California holds the greatest number of Caring Star designees, numbering 23 facilities. Arizona has the second largest number of any state, boasting 21 facilities on the list.

“Our research shows that word-of-mouth recommendations from others outweigh all other factors for caregivers choosing an assisted living community for a loved one,” said Andy Cohen, co-founder and CEO of Caring.com. These first-hand testimonials are consistently cited as more important than anything else, including price and location, which are second and third in impact respectively.”

View the list.

Written by Elizabeth Ecker

The Assisted Living Federation of America this week announced it has partnered with the first-ever senior living association in India. ALFA will work with the new Indian group to develop its senior living program to benefit the country’s consumers, the organization said.

“The Indian senior living sector is still in its infancy and is expected to grow at a rapid pace in the coming years,” said ALFA Director Steven Vick, co-founder and CEO of Signature Senior Living. “Senior living providers in India can learn a tremendous amount from the fits and starts we had when senior living was in its infancy in the U.S.”

The announcement comes following the first-time Retirement Living World India conference, held in December in New Delhi. There, industry leaders announced the formation of the Indian senior living group coined Association Senior Living India (ASLI).

“ALFA, working closely with ASLI, can contribute to their success by sharing with our partners in India what we’ve learned over the past 20 years,” Vick said.

Written by Elizabeth Ecker