Swenson Completes San Jose Senior Housing Project Anticipating Sector Rebound
Despite the coronavirus pandemic temporarily driving up vacancy rates at senior housing facilities, the fundamental drivers of the sector remain strong, something that developer Swenson is intending to capture with its new senior living facility in San Jose.
Construction wrapped up in April on Sonnet Hill Senior Living at 429 Meridian Ave. in San Jose, supplying 52 assisted living and memory care units ranging from 360 SF to 525 SF within a three-story facility. The 46K SF project has a total of 78 beds and includes a commercial kitchen, theater room, courtyard and activity rooms designed to foster rejuvenation for residents. The facility with units currently available for rent also offers 24-hour staffing and full-time licensed nurses.
"With a growing need for quality senior living in our area, Sonnet Hill provides a beautiful retirement community in a great location with easy access to shopping or medical services," Swenson Project Manager Joshua Almazan said.
San Jose ranked No. 8 in the nation for the highest percentage of Q4 2020 occupancies for independent living facilities at 90.3%, according to a report from CBRE. The pandemic’s onset had heightened the risk at such facilities with seniors especially vulnerable to the coronavirus. However, the vaccine rollout, which prioritized the over 65 demographic, is providing relief to the sector that was in high demand pre-pandemic.
Overall, the senior housing sector has taken a hit over the past year with some areas seeing a 25% decrease in occupancy. However, cities like San Jose and San Francisco have maintained steadier occupancy levels during the pandemic, according to Swenson Senior Vice President Summer Ludwick.
"Seniors and senior care facility workers were the first groups to receive vaccinations outside of healthcare professionals," Ludwick said in an email. "This has sped up the recovery of the industry and as more people get vaccinated, we see the senior living industry going back to pre-pandemic levels.
As is the case with other commercial real estate sectors, amenities and environments that prioritize safety will be in high demand for senior housing during the post-pandemic era.
The CBRE report found that the main sector drivers of aging demographics, historic sector undersupply and new construction being below 1% of supply have not changed compared to pre-pandemic conditions.
"The market supply is so low that the availability of these new living facilities is creating a market in [and] of itself, and with the huge emphasis on health and safety protocols in place, folks are becoming more comfortable transitioning into them," Ludwick said.