Senior Living News Wire

Construction: Planned

Senior Star to Expand Mo. Retirement Community

Senior Star is breaking ground on an addition to its Kansas City, Mo.-located Wexford Place to add new living units and expand available services.

The project includes the addition of 67 apartment homes as well as adding Alzheimer’s and dementia services with 24 memory care apartments. 

Purdum Construction, based in Overland Park, has been hired for pre-development and construction management services for the project, with Interior Design Associates, Inc., Schlagel and Associates, CFS Engineers, and Beery Rio Architects providing design services. 

The new addition to the campus, which already provides independent living, is scheduled to open a year from now. 

Development Fund to Buy Vacant Hospital for $2 Million, Plans Senior Housing Conversion

Hudson Valley Housing Development Fund, Inc. is planning to buy the former Highland Hospital/St. Francis Hospital in Beacon, N.Y. for $2 million, with plans to convert the vacant structure into senior living apartments, reports MidHudson News.

The city must first go through an approval process to acquire the former hospital, located in Wappinger Falls, N.Y., but already has the backing of the mayor. 

The Development Fund is planning to transform the building into a 68-unit senior apartment complex. Construction on renovations and upgrades are expected to take place in 2013, with an anticipated 2014 opening. 

Bernardon Haber Holloway Designs Senior Cottages for Community Expansion

Kennett Square, Pa.-based design firm Bernardon Haber Holloway Architects recently designed new cottages for the Kendal at Longwood Retirement Community expansion.

The cottages will have a variety of aging-in-place features, including windows that are easy to open, extra-wide garages so car doors can be fully opened, and walkways with gentle slopes. Other details include lever door handles rather than knobs; bathrooms wide enough to maneuver with wheelchairs or walkers; and blocking in the bathroom walks to enable the easy installation of grab bars. 

Other design features include sustainability measures such as drought-tolerant landscaping; geothermal heating and air conditioning systems; and a system to percolate stormwater back into the ground to recharge the aquifer. The 48 cottages are registered with the U.S. Green Building Council with goals of Gold and Silver certifications under the Council’s LEED program. 

Construction: In the Process

SCC Healthcare Group Breaks Ground on $10 Million Tex. Senior Care Facility

SCC Healthcare Group recently broke ground on a $10 million senior care facility in Odessa, Tex. 

The Madison Medical Resort will be a 43,000-square-foot care center offering post-hospital recovery, skilled nursing, and long-term care. 

It will feature hotel-style recovery suites, large, flat-screen televisions, and “resort-like” amenities. Various levels of physical, occupational, speech, ultrasound, electronic stimulation, wound, and IV therapy will be provided by rehabilitation professionals. Admission to The Madison will be initiated by a physician, hospital social worker, or discharge planner. 

SCC Healthcare Group will own and operate the development, which has a scheduled Summer 2013 opening.

Gary Holding Group Developing Ga. Senior Living Community

Gary Holding Group recently broke ground on a senior living community in Noble, Ga., reports the local Patch.com, expected to open in the fall of 2013. 

Noble Village will be an independent living community featuring 19 cottages intended for people aged 55 and older. There will also be services provided for assisted living or memory care residents. 

The development will feature amenities including a pet park, zero-entry heated pool, laundry service, post office, dining room, chapel, and several other dining areas.  

The Douglas Company Begins Renovations on Ohio Senior Community

The Douglas Company, a general contractor based in Toledo, Ohio, recently began extensive renovations on Bellefontaine Manor, an affordable senior housing community in Bellefontaine, Ohio. 

The $2.48 million renovation will take place in five resident buildings and one community center. A total of 40 units will get a “face-lift” consisting of upgraded appliances, barrier-free baths and kitchens, and efficient windows and exterior doors. 

Bellefontaine Manor is owned by Buckeye Community Twenty-Five, L.P. The renovation is expected to be completed by Feb. 2013.

Construction: Completed

Two Aviv REIT Assisted Living Communities Open in Connecticut

Aviv REIT, Inc. recently announced the opening of two new assisted living communities in Darien and Norwalk, Conn. The properties, which cost about $32 million to develop, are both triple-net leased to and operated by Maplewood Senior Living, who has an existing tenant relationship with the REIT. 

The Darien property has 66 units, and the Norwalk property has 84 units. Maplewood entered an initial lease term of 10 years with Aviv for both properties. 

$12 Million Affordable Senior Housing Community Opens in Ohio

The local Metropolitan Housing Authority recently opened a $12 million affordable senior housing community in Cincinnati, Ohio.

The Reserve on South Martin offers 60 one- and two-bedroom apartments to those aged 55 and older with certain income levels. Residents won’t begin moving in until January, but the building is already nearly 100% leased, according to a spokesperson from the CMHA.

Property amenities include a walking trail, indoor community space, and washer/dryer hook-ups in each apartment.

Northland Development Corp. served as general contractor, with Berardi Partners providing architectural services. The project received funding from the Department of Housing and Urban Development Neighborhood Stabilization program. 

Many non-profit continuing care retirement communities (CCRCs) have enjoyed getting 100% financing for their properties in the past, but that could change going forward, according to panelists speaking at SHN’s first annual Senior Housing Summit in July.

LeadingAge, a non-profit advocacy group of senior living providers, says 80% of CCRCs are non-profit, and while most have fared well through the downturn, the dozen or so that have ended up in bankruptcy during the recession have had a significant impact on the market.

In light of this, the future of financing CCRCs for non-profits will require more equity in order for developments to be successful, said David Reis, CEO of Senior Care Development, during the panel.

“Skin in the game is important,” Reis said. “So is the history of the non-profit and the communities it has. If you’re a nonprofit, you need to think very carefully before building a large-scale CCRC.”

Most of the failed projects have had little experience in operating CCRCs and financed the communities with large amounts of tax-exempt debt.

“Then when trouble came, they were the first to hit the exits,” said Reis.

In April, his company purchased the Clare at Water Tower in Chicago at bankruptcy auction for $53.5 million in cash, and is working to turn the project around.

The 750,000-square-foot building entered bankruptcy last year, leaving bondholders with only pennies on the dollar for its debt. The $272 million project was financed with $233 million of debt and ended up as 2011′s largest municipal bond default after the Clare’s sponsor first missed its payment in September that year.

But not all of the CCRCs being built today are experiencing financial distress. Located on the north side of Chicago, The Admiral at the Lake is finishing construction on a 31-story redeveloped community built on the site of the original Admiral, which first opened its doors in 1858.

The first residents moved into the new Admiral at the Lake in July, and 80% of the community’s independent living units are pre-sold, with expectations of reaching 50% occupancy by the beginning of October, said Glenn Brichacek, CEO of The Admiral at the Lake, during the panel.

For some institutions, years of brand recognition and a longstanding reputation can help, but increasingly CCRC projects will be asked to come to the table with something more tangible—their own equity stake.

“One thing that distinguishes us,” said Brichacek, “is when you look at larger CCRCs you see highly leveraged debt projects. When you include both the value of the land and the equity we put in, it was more than $20 million. That’s somewhat reassuring to investors as well as [non-profit partner] Kendal.”

Other non-profits such as Mather Ways have had successful CCRCs in the Chicago area, which seems to indicate there is enough market demand for high-end communities.

Cain Brothers Managing Director Mike Zarriello told SHN that many of the communities developed between 2007 and 2009 are experiencing some form of distress, he says.

“The primary reason for that is the fact that they were done by organizations who funded them with 100% debt,” he says. “That’s not a lot of leeway.”

As the economy heads toward recovery, investors don’t want to replicate that situation, he says.

While non-profit CCRCs have been able to fund development of projects through the tax exempt bond markets, profit-driven companies say getting financing continues to be a challenge.

“At one point, banks were very comfortable lending,” said Gary Smith, chief financial officer of Vi Senior Living. “[Those banks] are either not around anymore or have taken a break from lending, which makes sense given what’s happened.”

Smith does believe that financing will come back, but it will require a higher level of equity investment than it did in the past.

“The interesting thing is, start-ups that are getting done are with some form of equity contribution, [with] a guarantee from the related entity,” says Zarriello. “That’s the difference here—these deals aren’t being done with 100% debt. It gives the lenders a cushion. That’s the primary change that we see.”

Written by Elizabeth Ecker

A few high-profile bankruptcies by continuing care retirement communities have made waves in the senior housing industry, and there’s more drama to come—for at least four more years, says a New York-based owner-developer of CCRCs who specializes in acquiring distressed assets.

During Senior Housing News’ inaugural Senior Housing Summit, held last Thursday in Chicago, Ill., a panel of three senior living executives weighed in on the financial outlook for CCRCs, including a forecast for additional bankruptcies.

Hint: financial distress isn’t over yet.

“I think there are more [bankruptcies] to come for many years,” said David Reis, the CEO of Senior Care Development and buyer of Chicago’s Clare at Water Tower.

He said his company is currently tracking about three dozen projects. They’re not quite at the Clare’s caliber, he said, but he predicts that “a couple dozen” more CCRCs will end up changing hands in the next couple of years.

He’s not the only one who’s monitoring the situation.

“We’re keeping an eye on opportunities like that, as a subset that could be a good fit with our [portfolio of ten entrance-fee] CCRCs,” said panelist Gary Smith, the CFO of retirement community developer, owner, and manager Vi.

The driver leading to these distressed opportunities is the debt, Smith added, because they had taken on too much debt and couldn’t withstand the real estate market crash and lowered home values that hindered people’s ability to move into independent living.

Reis also questioned the financing model that he said many nonprofit sponsors use. It’s not surprising some are now finding themselves in distress after contributing little-to-no equity and taking on enormous amounts of debt, he said.

“How can you exist with so much leverage, when everyone’s taking out of the pot?” Reis asked, indirectly addressing fellow panelist Glenn Brichacek, CEO of another Chicago-area CCRC, The Admiral at the Lake.

“It’s too many fees going out [to financial and management partners or various other obligations] and not much equity coming in,” he added.

It was an open secret that Reis has had his eye on the Admiral, which he alluded to several times during the panel. His company, in partnership with management company Life Care Services, jumped at the opportunity to buy the Clare out of bankruptcy, but Reis views his competition to the north in stark contrast.

Since 2007, The Admiral has been in the process of building a new CCRC on the site of the original community, founded in 1858. But during the economic recession, financing for new construction largely dried up, and the nonprofit ended up entering into a partnership with The Kendal Corporation.

“If you’re a nonprofit, you need to think very carefully before building a large-scale CCRC” through the commonly used, no-skin-in-the-game financing structure, Reis said, pointing out that the Admiral—Chicago’s oldest nonprofit organization dedicated to providing senior living—is now affiliated with The Kendal Corporation.

While banks will often work through distress situations with communities, they don’t always fix the problem and instead apply an ineffective band-aid that just brings more pain when it gets ripped off.

“There’s still a ways to go,” said Reis regarding when distressed situations would subside. “If someone said four [more] years [of financial distress], that would not untenable.”