Senior Living News Wire

After home values tanked as much as 30% from 2006 levels in certain parts of the country, according to Case-Shiller home price indices, some senior housing operators have been forced to purchase seniors’ homes in order to attract new residents to their facilities.

Home purchase programs function as an agreement that a senior housing company will purchase a prospective resident’s home after it has spent a certain amount of time on the market without selling. The house is generally purchased at a previously agreed-upon price, usually obtained from a third-party appraisal.

Most programs have different components as to how long a house must remain on a market, and at what price, before the senior living company buys it. The program allows seniors to enter a senior living community with a down payment, rather than paying the full cost of the entrance fee up front. The house’s eventual sale then functions as a promissory note, and its proceeds go to pay off the rest of the entrance fee, with any remainder going back to the senior.

Brookdale Senior Living, headquartered in Brentwood, Tenn., is one such company that offers this, although Chris Bird, a divisional vice president of operations, says it’s not exactly a common practice as only 12% of the company’s communities have an entrance fee; the rest are rental.

“For Brookdale, it’s a practice that we brought back to the table in 2008, when housing started to slow down, and prices started to erode in resale values,” says Bird. “We wanted to inject some opportunities for seniors to enter Brookdale Living.”

That year, 15% of residents entering the communities that offered the home purchase contract utilized the program. One-quarter of incoming residents used the program in 2009, and by 2010, nearly four out of ten, at 38%, participate in a form of the program, says Bird.

Since the housing purchase program started in 2008, Brookdale has seen an uptick in sales and occupancy, and now in 2011, move-ins have increased 31%, says Bird.

While occupancy rates remain steady in independent living facilities, at 87.4% in the second quarter of 2011, a slight decrease from the previous quarter, this can be attributed more to high demand paired with low supply rather than seniors flocking to pay steep entrance fees, according to data from the National Investment Center for the Seniors Housing and Care Industry. Seniors housing annual inventory growth was down 2.1% for the quarter compared to the previous year, the lowest level seen in the current market cycle.

In response, Windsor Parks, located near Chicago, Ill., is another retirement community that offers a home purchase program, implemented in 2009. It’s been extremely beneficial to the community, says Julie Gambino, director of sales and marketing at Windsor Parks.

“We want to get people to move in, and it’s harder for older adults to sell their homes in the current market. I do foresee that there will continue to be a need for this program,” says Gambino.

Although a better housing market will limit the need for such a program, Gambino says those days won’t arrive for a while.

“As the economy changes, there will be less of a need because houses will be selling quicker. Until 2018, at least, the forecast is that the Illinois market won’t be stable, and we want to get people moved in in the meantime,” she says.

Windsor Park facilitates its home purchase program through Moving Station, whose senior division works with multiple retirement communities throughout the nation. Vice president Patti Saulig says the housing market won’t get better for another few years, furthering the need for her company’s services. She says there will be ongoing concern for seniors about selling homes, and this extends to the FHA-insured loan limit reduction.

“We do not see the real estate industry turning around in the next couple years,” says Saulig, adding that she thinks it will get worse before it starts to improve.

The Department of Housing and Urban Development recently announced that the limit for FHA-insured loans will be lowered from $729,000 to $625,000 in October. The lower limit means some borrowers will be unable to get an FHA-insured loan, which by extension means it will be even harder for baby boomers to sell their homes and downsize into alternative living arrangements, such as independent living facilities or continuing care retirement communities.

“Anything that limits what today’s borrower can qualify for ultimately affects anyone trying to sell a home these days,” says John Walsh, president of Total Mortgage Services, LLC, based in Milford, Conn. ‘“This reduction in the FHA limits will definitely affect some people’s ability to purchase a home once the new limits are put into effect.”

Both Saulig and Bird agree that there will continue to be a need for home purchase programs in the next few years, although many hope the service won’t be necessary for too much longer.

“The intention is, these are short-term programs,” says James Janicki, the senior director of marketing for Riverside Health System, located in Virginia. “When the economy rebounds, we don’t expect to have those.”

Although only two people have entered Riverside’s home purchase program since they began offering it in 2009, it has increased leads, says Janicki, adding that many people who were initially drawn in through the program went on to choose another financing option.

“It definitely made incremental sales that we wouldn’t have made without the program,” he says. And while some didn’t feel comfortable with the program’s guidelines—Riverside agrees to buy a house if it hasn’t sold after being on the market for 15 months, at 80% of its appraised value—”Others viewed it as peace of mind, knowing their house would be sold.”

Written by Alyssa Gerace

Benefis Health System recently broke ground on its first continuing care retirement community, the Grandview at Benefis, in Great Falls, Mont.

The 42-acre campus, which will have 140 units, will cost about $67 million. Construction is due to start imminently, and is expected to be finished in 2014. Residents will consist of a range of seniors, from those who are active, to those who require assisted living or nursing care.

“This concept actually brings together independent living housing with the other parts of continuing care, assisted living, and a new concept in skilled nursing. We call it skilled nursing cottages,” says Frank Soltys, director of Benefis Senior Services.

The campus will include 15 houses, 77 independent living apartments, and 48 assisted living apartments. Half of the houses and a third of the independent living apartments have already been claimed with deposits by interested future residents.

Written by Alyssa Gerace

Investment banking firm Ziegler recently closed a transaction on Miralea, an independent senior living development situated on the current grounds of Masonic Homes of Kentucky’s Louisville campus.

The campus includes 146 independent living apartments, 104 assisted lving units, and 136 skilled nursing units, and Ziegler structured a $43.785 million bond transaction to construct 102 new independent living units. Miralea is an affiliate of the Masonic Homes of Kentucky, which has approximately 600 units on three campuses.

The Series 2011 Bonds from the transaction will finance Miralea’s development, which will include common dining areas, a wellness/fitness center, a pool, creative arts center, and other common living areas in addition to the independent living units. The first residential move-ins are expected to occur in December of 2012.

“This is an exceptional project for an exceptional sponsor,” said Tom Meyers, Managing Director in Ziegler’s Senior Living practice. ”Mirelea not only was 100% pre-sold by the financing’s finalization but also a wait list with more than 20 units had been established. This is a very rare accomplishment and it is a great sign of the project’s future success.”

Written by Alyssa Gerace

CRL Senior Living Communities recently completed the construction of its second Illinois location, and plans to continue its expansion into the Chicago area, reports REJournals.com.

The company’s CEO, Ari Weinberger, is the majority shareholder along with chairman Douglas Cameron, and the duo is looking toward senior housing acquisitions rather than construction when it comes to assisted and independent living facilities.

“We are looking to grow in the assisted and independent market, but we are not willing to build,” says Weinberger in the REJournals article. “We will acquire and reshape underperforming properties, but that is still a tough environment. Sellers and buyers are not always in agreement today.”

Although the poor housing market is hampering the ability of seniors to sell their homes in order to enter assisted or independent living facilities, there is growing demand for need-driven facilities, says REJournals. Weinberger sees profitability in memory care, especially with the nation’s aging population.

“People over the age of 80 have a more than 50% chance of having memory issues,” says Weinberger in the article.

The firm recently completed construction on North Grove Manor Alzheimer’s/Memory Care and Assisted Living, a $20 million, 112-bed facility in Morton Grove, and is also currently in the pre-construction phase of a similar project in Highland Park. Additionally, it has acquired properties in Naperville and Palatine for future memory care centers, and already operates 16 assisted and independent living facilities in the Midwest.

Read the full article here.

Written by Alyssa Gerace

Marcus & Millichap Real Estate Investment Services recently arranged the sale of a $40 million portfolio consisting of two New England assisted living care facilities.

The first property, Village at Fillmore Pond in Bennington, Vt., sold for $20.9 million, and has 101 units consisting of 30 independent-living units units, 45 assisted-living units, 12 memory-care units and 14 newly built independent-living cottages. The other property, The Inn at Spruce Wood, in Durham, N.H., sold for $19.1 million and has 100 units consisting of 35 independent-living units and 65 assisted- living units, 25 of which are dedicated to memory care.

“Seniors housing assets with consistent returns are becoming increasingly attractive to investors,” says Michael Pardoll, a senior vice president of investments in the firm’s Charlotte, N.C. office. “Facilities with assisted-living, independent-living and memory-care components remain the most sought-after seniors housing properties.”

Pardoll, along with senior associate Christopher Hyldahl, represented both the seller, NE4 Senior Living Facilities LLC, and the buyer, Emeritus Senior Living, in both transactions.

The portfolio continued to perform well even during the market crisis.

“Each property in this portfolio has sustained occupancy levels greater than 90 percent through the economic downturn, while increasing rents between 4 percent and 6 percent annually since 2007,” says Hyldahl. “Currently, the two properties have a combined total of 201 stabilized units, with expansion potential for another 16 cottages at the Bennington, Va. facility.”

Written by Alyssa Gerace

An investor group led by affiliates of Westport Capital Partners LLC recently announced it has closed on the sale of a senior housing property to a publicly traded senior housing property owner-operator. The property, The Inn at Fillmore Pond, represents the fourth and final sale of a four-facility portfolio, acquired in April 2007 by the Westport Group for $83 million.

Known as the New England Healthcare Portfolio, the properties were acquired in partnership with Capital Health Group and Kaplan Development Group, and provide independent and assisted living as well as dementia care services.

Total sales for the portfolio, which included The Inn at Fillmore Pond in Bennington, Vt., The Inn at Forge Hill in Franklin, Mass., The Inn at Robbins Brook in Acton, Mass., and The Inn at Spruce Wood in Durham, N.H., all of which have now been sold, came to about $210,000 per unit.

The Westport group added 14 independent living cottages and a 28-unit dementia wing expansion to The Inn at Fillmore Pond before selling it; the ownership group says it has nearly doubled its net income in the four years since the acquisition due to cumulative portfolio improvements.

“This investment is consistent with Westport’s pursuit of healthcare related assets where we can create value through active management and asset repositioning in partnership with strong local operating partners,” Jordan Socaransky, Principal at Westport, said in a press release. “The operating improvements and facility expansions we undertook led to improved performance at each of the properties and have resulted in a successful exit for the partnership.”

Written by Alyssa Gerace

Occupancy rates are holding steady for seniors housing in the second quarter of 2011, while the pace of rent growth is rising, says NIC MAP, a data analysis service of the National Investment Center for the Seniors Housing & Care Industry (NIC).

Rent growth increased fairly significantly on a quarterly basis, going from 0.9% to 1.4% between 1Q 2011 and 2Q 2011, with a slighter annual swell of 0.2%.

“This annual pace of rent growth is the highest we’ve seen in the past five quarters, and is on par with core inflation for this same time period,” says Charles Harry, director of research & analysis, NIC.

The rent growth has not deterred seniors housing renters, however, as occupancy rates either went up or remained steady.

From 2Q 2010 to 2Q 2011, there was a 0.5% increase in the seniors housing occupancy rate, whereas there was no fluctuation whatsoever between this quarter and last, with the average occupancy rate resting at 88%. This rate is 0.7% above its cyclical low of 87.3% in 1Q 2010, the data analysis shows.

Occupancy rates for both independent and assisted living properties have also shown stability from last quarter’s rates. Occupancy increased slightly from 88.4% to 88.5% for assisted living, while independent living occupancy rates remained the same.

However, while rates haven’t exhibited much change on a quarterly basis, independent living occupancy has increased 0.6% from its cyclical low of 87.1% in 1Q 2010. Assisted living, on the other hand, peaked in 3Q 2008 with an 88.8% occupancy rate, and even though 2Q 2011 rates don’t quite match that, they’re at the highest levels since that time.

“While occupancy rates are currently trending sideways, they have moved from beyond their recent cyclical lows,” says Harry.

Even though occupancy rates have been holding steady, annual inventory growth isn’t making such a strong showing. In the second quarter, the inventory growth rested at 1.1%, down 0.2% from the previous quarter. While this isn’t a huge decline, it’s substantially lower than 2Q  2010′s 2.1% inventory growth, and NIC says this is the lowest level seen in the current market cycle. Despite this, however, construction vs. inventory seniors housing maintained its 1Q  2011 level at 1.9%.

The second quarter’s annual absorption rate, at 1.6%, is down somewhat from last year’s 1.9%, and has decreased from the first quarter’s 2.1%. However, Harry says this lower rate reflects the continuing softness in both the economy and the housing market.

The occupancy rate for nursing care decreased slightly to 88.4%, down from the previous quarter’s 88.5%. Annual inventory growth for nursing care fell 0.1% in the second quarter, while the annual pace for private pay rents went up 3.3%, matching the first quarter’s pace.

Written by Alyssa Gerace

Although average vacancy rates for independent living suites in Canada have gone up in the past year, Canada Mortgage and Housing Corporation (CMHC) says analysts are expecting a bigger demand for senior housing as the baby boomer generation continues to age.

CMHC recently released its annual Seniors’ Housing Report, which looked at 14,392 independent living suites, and also 12,278 seniors’ housing units made up of heavy care units, respite beds, and subsidized units. The vacancy rates of the units surveyed rose to 11.5% in February 2011, up from 10.4% a year previously.

“Seniors’ housing operators are anticipating an increase in demand for seniors’ housing as the housing needs of people in the baby-boomer cohort shift to supportive living,” notes Sarena Teakles, CMHC Market Analyst. “New seniors’ complexes are being built throughout the province, however at the current time there is a higher than anticipated number of vacant units resulting in an higher overall vacancy rate.”

Teakle went on to say the report shows a trend for seniors to choose to live in seniors’ housing complexes with different types and levels of services, and as Canada’s senior population continues to expand, it seems likely demand for senior housing will increase.

CMHC says average rent levels for independent living suites vary by region, with high rents in the Lower Mainland and Vancouver Island/Central Coast regions; price-influencing factors include land cost and the differences in the cost of services and amenities.

Written by Alyssa Gerace

Two California senior housing properties have recently been bought in a transaction coordinated by CB Richard Ellis National Senior Housing Group. The facilities, located in Beverly Hills and Livermore, Ca., sold for $31,925,000.

The Beverly Hills facility, BridgePoint, was built in 2000 and has 60 independent and assisted living units. Rosewood Gardens, build in 1974, has 64 independent or assisted living units, with an additional 18 units recently converted into a secured dementia wing.

CBRE represented the seller, AEW Capital Management, and procured the buyer, Watermark Retirement Communities, which is an affiliate of The Freshwater Group. Watermark’s acquisitions bring the number of communities it will manage to 27, with a total of nearly 6,500 units. The company owns nine of those assets, as well as three regional home health agencies.

Demand was high for these facilities, evidenced by competitive bidding.

“Bidding was strong due to the strong southern and northern California locations, especially the Beverly Hills asset, which is irreplaceable and has tremendous barriers to entry,” says David Rothschild of CBRE Senior Housing Group, adding that this bodes well for the long term success of the community.

Written by Alyssa Gerace

Ascom Wireless Solutions released a new line of Home Care Services for the Independent Living Segment, starting with a phone that enables a secure line of communication with the outside world for home bound individuals.

“Ascom Wireless Solutions is a strong solution provider of mission critical communication for the acute care & institutional care segments,” said Peter Härdi, Vice President of International Marketing and Product Management for Ascom Wireless Solutions.  “The new line of Ascom Home Care Services gives home bound individuals a direct link to professional care or emergency help much in the same way our patient monitoring/critical alarm solutions directly link medical staff with critical patients in need of immediate assistance.”

The Ascom Care Phone is the first of a number of products the company has planned for meeting the needs of individuals wanting to live with dignity in their own homes as they get older or recover from illness.

Ruud Lohuis, Business Development Manager for Ascom Wireless Solutions says, “We have transformed the aspiration of independent living into a number of purpose-build devices and solutions designed to eliminate the anxiety often felt by home-bound individuals. The Ascom Care Phone offers the security that help will arrive when needed, as well as gives the user the mobility to move in and around the outside of their home.”

View more information here.

Senior living community operator Arcadia Communities, based in Louisville, Ky., said it closed on the acquisition of the Trace Senior Living Community in Covington, La., for an undisclosed amount.

The 77-apartment community provides independent living, assisted living, and memory care options for its residents.

“We are very excited with the addition of the Trace to our company. The Trace is the premier assisted living community in the area and we look forward to continuing to build upon the success they have achieved” said Brian Durbin, President of Arcadia Communities.

Built in 2009, the community was at full occupancy at the time of the acquisition, and Arcadia stated its plans to retain The Trace’s staff and management.

Arcadia also operates other independent and assisted living communities in Michigan and Ohio, with additional communities under development.

Written by Alyssa Gerace

The Department of Housing and Urban Development awarded more than $31 million in grants to public housing authorities, resident associations and non-profit organizations across the U.S. to help public housing residents connect to services available in the community to find employment to increase their economic independence.

The money will also link the elderly with supportive services that allow them to remain independent and age in place.

“We need to take a wider view of the needs of public housing residents beyond just housing if we’re to be true to the goal of promoting self sufficiency,” said HUD Secretary Shaun Donovan.  “The caseworkers that housing authorities can hire or keep on staff help thousands of public housing residents connect to opportunities to obtain jobs or increase their incomes that lead to self-sufficiency and improve quality of life.”

HUD’s Resident Opportunities and Self Sufficiency (ROSS) – Service Coordinators Programs work directly with residents to assess their needs to connect them with education, job training and placement programs and/or computer and financial literacy services available in their community to promote self-sufficiency.  For an elderly or disabled resident, the service coordinator arranges supportive services that allow them to maintain their independent lifestyle.

The purpose of the ROSS Service Coordinator program is to provide funding to hire and maintain Service Coordinators who will assess the needs of residents of conventional Public Housing or Indian housing and coordinate available resources in the community to meet those needs.

“This program works to promote the development of local strategies to coordinate the use of assistance under the Public Housing program with public and private resources, for supportive services and resident empowerment activities. These services should enable participating families to increase earned income, reduce or eliminate the need for welfare assistance, make progress toward achieving economic independence and housing self-sufficiency, or, in the case of elderly or disabled residents, help improve living conditions and enable residents to age-in-place.”

Through HUD’s Elderly/Disabled Service Coordinator Program, the coordinators help obtain supportive services for the elderly and persons with disabilities residing in public housing.  The program’s objective is to help this resident population continue to live in place, independently, without having to move to more expensive assisted care environments.

Eppstein Uhen Architects (EUA) has broken ground on the Crestwood, a new $18 million independent living community in Tulsa, OK.

The facility spans 204,000 square feet, with a 4-story independent living community located in the center of the Oklahoma Methodist Manor.  The community has 103 residences which range from a 670 square foot one bedroom to a 1,500 square-foot two-bedroom with sunroom.

The amenities include under-building secured parking along with a main entry/porte cochere. Additional features include a library/business center, full service restaurant, café, hobby zones, a theater/Academy Classroom, member’s club and a game room.

Centrally located within the campus, the center offers an equipment room, fitness classroom, locker rooms, aquatic center, beauty salon, exam rooms and a massage therapy room.

EUA said it expects the community to be completed in February 2012.

Institute on Aging (IOA) announced this week the opening of a new campus that will incorporate services and housing for independent senior living. The new campus, based in San Francisco, is a 50,000 square foot facility that began in the year 2000 and will open the weekend of April 2.

“With our new campus, IOA is continuing its transformative mission of helping older adults navigate the process of aging with dignity and joy through supportive resources for the elderly and those who care for them,” said David Werdegar, M.D., president and CEO of IOA.

“The integration of housing and services to support independent living for older adults is a new and unique model nationally,” explained Werdegar. “The focus of IOA’s new campus is to provide everything necessary to enable older adults in the Bay Area to maintain their health, well-being, independence and participation in life.”

The community-based non-profit has a focus on developing and providing programs in health, social service, creative arts, spiritual support, education and research. It’s new campus includes an education center, fitness and rehabilitation centers, auditorium and art studios, among other facilities.

Within the campus, a partnership with BRIDGE Housing Corporation allows for 150 independent spaces for seniors of modest income. Fifty-three of these units are reserved for PACE-eligible (Program for All-Inclusive Care) seniors who have special needs.

“The need for such services has never been more critical as baby boomers begin to turn 65, elderly live longer and more productive lives, and federal government programs increasingly focus on senior home care and community-based services,” said Anthony Wagner, IOA’s chairman. “IOA has helped seniors maintain, and improve, their health and well-being, and live independently for much more of their lives. For caregivers, IOA has been an invaluable resource for education and support when more costly alternative care is not an option or their choice.”

Find out more.

Over 200 senior living and health care professionals converged in Atlanta over past few days to take in tours, presentations and discussions as part of the 11th annual Environments for Aging. The conference, hosted by the Vendome Group and its publications, partnered with the American Institute for Architects – Design for Aging, SAGE and ASID for its three day conference.

Participants had the opportunity to tour the 64 acre Wesley Woods Center which is Emory Healthcare’s campus for senior care and the Georgia Institute of Technology Aware Home Research Initiative that features both state of the art technology and off-the-shelf products to demonstrate aging in place systems.

The conference sessions focused heavily on design of various senior living campus environments and stand-alone facilities that included repositioning older physical plants to ground-up design of various plays on the elder/senior care village concept. The sessions drew from both the presenter’s expertise and the audience interaction during many of the sessions in an open, round table format during many of the sessions.

Next year’s conference, set to happen in March 2012, will be located in Orlando, Florida.