Archive for May, 2010

Fine Dining in Long Term Care: A Contradiction in Terms?

Thursday, May 27th, 2010

Not in Phoenix! Or indeed all over the USA where fine dining in long term care is a definite trend. I toured a state-of-the-art not-for-profit skilled nursing facility in nearby Tempe AZ on Monday. I was profoundly impressed. The goal of the owner of the facility, Friendship Village, was to retain the ambience of a residential environment and avoid any feel of the institutional. Without question they achieved the goal. The hallways are gorgeous—no other word will do although it seems odd to describe a hallway as gorgeous. Unlike every other hallway I have seen in a care facility, they undulate. They are also carpeted, painted in beautiful colors, and highlighted with artwork and furniture at appropriate intervals.  Doorways are recessed. The contrast with many independent living communities I am familiar with could not be starker.

The dining rooms blew me away too— linen tablecloths and napkins! And menu choices! And open eating hours! I don’t like to overdo the exclamation marks but the facility was really unlike anything I have ever seen.

“Ah but what does all this cost?” you are no doubt thinking. Friendship Village is a life care community—residents buy in at the independent living stage and whatever care they need beyond that stage is provided at the same monthly cost. For example, a one bedroom unit may cost $160,000 (assuming no return of capital) plus monthly fees of $2,300 (meals, housekeeping, laundry etc). If someone buying in at this level were ever to require skilled nursing care, they would continue to pay the same monthly fee they paid in independent living (adjusted for inflationary increases).

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Kitchens in Independent Living Communities

Tuesday, May 25th, 2010

I am in Phoenix at the ALFA conference. It takes a long time to get to Phoenix from Vancouver in spite of the fact that the two cities are in the same time zone (in the summer—Phoenix operates on standard time all year long). I spent part of the travel time reading Jim Moore’s latest book, Independent Living and CCRCs.  Chapter 11 discusses high impact design features for independent living communities. Number one on the list is full-function kitchens, even in places serving three meals per day.

Yesterday I toured three life care communities in the area and I will be posting more about these three over the next few weeks, along with highlights from the conference itself. All three had full-function kitchens in their independent living units. My tour guides were shocked when I told them that full-function kitchens in Canadian independent living communities were rare. One of the three is upgrading its units—it is 20 years old—and the new fridges are the two door type with ice and water dispensers on one of the doors. The contrast with Danby bar fridges could hardly be starker. The upgraded stoves are full size with burners that are flush with the surface.

American operators include full-function kitchens more for the impression they create than for their actual utility. Consumers associate the lack of full kitchens with nursing homes and they don’t want to go there!

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Good Market Studies for Seniors’ Housing Projects can Save you Millions of Dollars; Bad ones can Cost you Millions of Dollars

Thursday, May 20th, 2010

Since one of Lumina’s business lines is market studies, it may sound self-serving for me to say that it is false economy of the worst kind to launch a real estate development project of any kind without doing a market study first. But very often, developers have great difficulty grasping the fundamental truth of this observation, partly because of personality. Lack of confidence is not a trait shared by many developers but it is easy to tip over the line from confidence to hubris. Even granting a solid understanding of a market on the part of a developer, a third party study is invaluable in terms of reducing risk and maximizing profitability. Lenders know this, which is why they are usually more likely to require a market study than a developer.

To make the matter more complicated, there are numerous ways for market studies to go off the rails, many of them not especially obvious to casual or uninformed observers, OR, it must be said, to unethical market analysts who write “market studies to order”.  Firms like this certainly exist and in most cases, knowledgeable industry participants know exactly who these companies are.

In future posts (interrupted by posts from Phoenix, where I am headed to the ALFA conference on Sunday) I will address some of the ways market studies can go off the rails and what you should watch for. This is assuming of course, that you are interested in a market study that tells you the truth.

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The Future of Senior Housing: Planning, Building, and Operating Successful Senior Housing Projects – new book by Kate Mancer, out soon

Tuesday, May 18th, 2010

When I say “soon” I mean June or July (2010!). We sold copies of the book at the pre-publication price of $25 (including tax and shipping) at the 3d Canadian Seniors Housing Forum held in Toronto  in March. (The conference was organized by inSIGHT—a Western Canadian conference is planned for November 2010.)

The pre-publication price will be in effect for a little while longer. One of the attendees at the Toronto  inSIGHT conference  suggested that it would make a great Christmas present, and it would!

Here’s what the book is about—this is the back cover:

9,000,000 seniors in 2031: How you can benefit from the coming boom in senior housing

Statistics show that 25% of the 65+ population moves between one census year and the next. In 2013 that will mean 2,225,000 movers! Where will they all live? This book will help you tap that market, whether you are a for-profit or not-for-profit developer, an architect, a lender, a builder, an owner, or an operator.

You will learn:

  • Who moves, who doesn’t, and why.
  • How large a market area you can reasonably expect to appeal to.
  • What consumers in your market area can afford to pay for housing.
  • How a good market study can save you millions of dollars.
  • What marketing techniques have the most impact.
  • What unit types and amenities consumers prefer.
  • How you can fill your project up fast and reduce turnover.
  • How you can make sure you don’t just have satisfied residents, but very satisfied ones instead—research shows that they are the only ones who will recommend your project to their friends.

Kate Mancer, M.A., is one of Canada’s foremost market analysts in the seniors’ housing and health care field. Her company, Lumina Services, has conducted hundreds of market studies and needs assessments for all kinds of seniors’ housing projects—active adult, supportive housing, assisted living, and long term care. She is a frequent presenter at industry events.

Don’t miss out on pre-publication pricing (and don’t forget Christmas).

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US Seniors’ Housing Conferences

Thursday, May 13th, 2010

I am heading off to Phoenix a week Sunday for the annual Assisted Living Federation of America (ALFA) conference. The last ALFA conference I went to was in San Diego in 2006. Since then I attended National Association of Homebuilder 55+ Housing Council conferences in Denver (2007) and New Orleans (2008). The NAHB conferences were focused exclusively on active adult housing for years but both Denver and New Orleans added a service-enriched stream. That was dropped in 2009.  The whole conference was dropped in 2010, presumably because things are so bad in the US seniors’ housing industry, at least from the perspective of the NAHB. So it’s back to ALFA.

I will be posting regularly from the conference itself. In addition I am touring three projects and will post about those as well.

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University-Based Seniors’ Housing in Canada

Monday, May 10th, 2010

People don’t typically move to golf course communities in cold climates, although a recent edition of CARP magazine lists 27 active adult communities in Ontario, six of which feature golf courses. Canadians looking to avoid winter but still wanting to keep active might be more inclined to move to amenity-rich buildings. Some developers have taken dead aim at these consumers, incorporating pools, gyms, golf simulators, and personal trainers into their menu of services. On a more intellectual level, communities that offer links to universities or are built right on university campuses have become extremely popular in the US. There are more than 100 such communities, which offer reduced or free tuition, access to libraries and university events, and even opportunities for employment.  Many of these communities operate on an entrance fee basis, similar to life lease housing.

Although a number of Canadian universities are adding residential components to their campuses, very few seniors’ communities have been developed—in fact, we have only been able to identify two, although a third is in the planning stages at Trent University in Guelph. (In an interesting reversal, several floors of a nearby seniors’ residence have been converted to student housing at the University of Winnipeg.) The first and largest is the Village by the Arboretum, on the campus of the University of Guelph. Home to over 1,000 seniors and active adults, the community consists of single detached houses, townhouses, apartment-style condominiums, an on-site medical centre, and social and recreational facilities. An assisted living component is planned. At the University of British Columbia, Concert Properties and Leisure Care are building a 180 unit seniors’ community that will include 134 rental units and 46 condominium units.

It seems rather curious that university-based seniors’ housing is such a rarity in Canada. The old 10-1 rule suggests that if there are 100 seniors’ housing communities on university and college campuses in the US there ought to be around 10 in Canada. It is also worthwhile considering that the university-based seniors’ communities in the US were developed in the pre-baby boomer era. What will happen when the boomers start retiring in large numbers? Will campus-based seniors’ housing explode?

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Migrating Seniors (reprise)

Thursday, May 6th, 2010

My last post discussed the surprising fact that Alberta attracts and retains more interprovincial migrants over the age of 65 than BC. Those migrating seniors are part of the 20% of the 65+ age group that moved between the last two censuses. Not all moved interprovincially of course—in fact, many more moved within the same province. To take BC as an example, for every 100 people over the age of 65 who moved between 2001 and 2006:

  • 49 moved within the same city or town;
  • 36 moved within BC;
  • 10 moved from a different province;
  • 5 moved from another country.

The proportions were almost exactly the same for younger BC seniors (55 to 64), which is interesting because that group contains many leading edge boomers. The expectation among many industry observers is that baby boomers will behave differently from older generations, but that expectation has yet to materialize in mobility patterns.

Generally speaking, the older people get the more likely they are to stay close to home. More people over the age of 75 move within the same city or town than other age groups, and fewer move between provinces. We might expect then that younger seniors would be more inclined than older seniors to move from province to province, but that’s not what happened, between 2001 and 2006.

One of the reasons for this is probably the snowbird phenomenon—people don’t move from province to province because they go away for six months every year. A far greater proportion of American seniors move from state to state: they’ve got all kinds of warm places to move to. Canadians have South Western British Columbia, milder than the rest of the country to be sure, but it’s not Arizona!

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Alberta, not BC, is Canada’s Retirement Magnet for Seniors

Tuesday, May 4th, 2010

Here is a chart that surprises almost everyone who sees it. Over the 10 year period between 1998 and 2008, Alberta attracted and retained considerably more interprovincial migrants than BC. The numbers come from Canada Revenue Agency records.

Interprovincial Migration of Seniors 1998 - 2008

Interprovincial Migration of Seniors 1998 - 2008

Note that we are talking here about NET migration, in minus out. The net figures are interesting but the detailed in and out comparisons are just as interesting, perhaps even more so.  As an example, about the same number of people moved to BC and Alberta over this period, but more left BC than left Alberta.

We will return to the subject in later posts but after having spent a great deal of time thinking about this apparent conundrum, we have come to the conclusion that the two major reasons for the ascendancy of Alberta are 1) much greater job creation, at least until the recent recession and 2) lower cost of living. Of course seniors aren’t moving to Alberta in search of jobs, but their kids (and grandkids) are. As for the cost of living, we have charted some amazing differences between the two provinces but overall, it’s probably about 25% cheaper to live in Alberta than in BC if you are over the age of 65.

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