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Senior Housing Looks More Like Luxury Apartments Today, But It Can Be Harder To Build

The look and feel of senior housing has changed dramatically from hospital-like nursing homes to amenity-filled buildings that resemble today's luxury apartment buildings.

CPDC's Suzanne Welch, Trammell Crow's Cheri Clarke Doyle, Capitol Seniors Housing's Scott Stewart, BCT Architects' Janet Meyer, LandDesign's Gabriela Cañamar Clark and Nixon Peabody's Colette Dafoe

The shift has come as more baby boomers are reaching retirement age and looking to maintain an active lifestyle concurrently with more traditional multifamily developers entering the senior housing space. But senior housing can be more complicated to build and operate, creating barriers of entry that give experienced players an advantage. 

Trammell Crow Senior Vice President Cheri Clarke Doyle, speaking Wednesday at Bisnow's Greater D.C. State of Senior Housing event, said she has seen a nationwide boom of what the company calls "active adult" projects.

"It is really multifamily with a little bit of a rent premium and bigger amenities," Clarke Doyle said. "It caters to a 70-plus person who wants to sell their house and move into a rental situation with folks that aren't millennials running around the pool at midnight." 

Capitol Seniors Housing founder Scott Stewart

Capitol Seniors Housing founder Scott Stewart said the most gratifying part of working in the senior living industry is seeing how it has changed over the last few decades. 

"You think back to the '70s, seniors housing was really a hospital bed," Stewart said. "It was institutional and horrible with drop ceilings, florescent lights, your grandmother curled up in the corner of the bed and Nurse Ratched walking the hallway. It was just horrible." 

But today, Stewart said residents of senior housing have benefits such as stimulating activities, preventive healthcare and better nutritional offerings that improve their lives.

"Through these idyllic, wonderful settings and amenities we've been able to give seniors as a result of the real estate we've built, they're living longer, happier lives," Stewart said. "Seniors lives have become better and their dignity has been restored."

ZOM Senior Living's Brett Gelsomino and Mather LifeWays' Gale Morgan

While baby boomers are boosting demand for senior housing, the oldest people in the generation are still in their mid-70s and are largely going to make the choice to move to a senior housing community rather than do so by necessity, ZOM Senior Living Vice President Brett Gelsomino said. This means it is important to remove the negative connotations of senior housing and make it a more appealing product that people would choose to live in. 

"It is a sector that has historically had a nursing home connotation, with florescent lights and tile floors," Gelsomino said. "We need to overcome that by softening it and bringing more of a luxury residential edge and more of a hospitality approach and a luxury approach."

A key to appealing to the new generation of seniors is not thinking about them differently than other renters, Mather LifeWays Senior Vice President Gale Morgan said. Over 90% of Mather's residents have an active fitness regime, she said, so the company provides the type of dynamic workout options one would see in a typical apartment building. 

"No one on their 72nd birthday is going to want to do chair volleyball instead of volleyball," Morgan said. "It's about realizing that consumers want what we want. When you're 50, you want the same type of capabilities as when you're 75." 

Senior housing projects may be moving in the direction of luxury multifamily, but that does not mean they are just as easy to design, operate or finance. 

BCT Architects' Janet Meyer, LandDesign's Gabriela Cañamar Clark and Nixon Peabody's Colette Dafoe

Designers of senior housing communities have to pay more attention to detail than they would with a traditional multifamily project, BCT Architects principal Janet Meyer said. Seniors often require special touches like rounded edges on countertops or increased lighting levels to meet their needs and keep them safe, she said. 

"The finishes aren't more expensive, but there absolutely is an expectation of quality and you have to be very careful from a design perspective," Meyer said. "It's not just 'oh I can design it the same as my multifamily community and it's going to work.'"

Operating senior housing properties requires more on-site staff than a typical multifamily building, and today's tight labor market has made that a significant challenge. Morgan said labor recruitment and retention is the top strategic initiative Mather LifeWays is working on. 

"Times have changed," Morgan said. "A great site with great buildings with strong demographics no longer indicates it will be a success. You have to look at the organization that's going to operate and manage it. Can they attract and keep the staff?"

EagleBank's Chris Painter, Wesley Housing's Kamilah McAffee, ZOM Senior Living's Brett Gelsomino, Mather LifeWays' Gale Morgan and Hickok Cole's Laurence Caudle

Senior housing developers can also face hurdles financing projects, EagleBank Senior Vice President Chris Painter said. Designing larger amenity and wellness spaces can help attract residents, but they also drive up cost and reduce the amount of space for rentable units, making lenders cautious about some of the new trends. 

"Any lender is going to be skeptical when a client comes in and says, 'Hey, we want to do this crazy high-end building' or something that's not really common in the market," Painter said. "Lenders like what they know. So to the extent that amenities are above and beyond what we'd normally see for a community, that would definitely be something we'd have to get comfortable with."