Senior housing developers that aren’t also building medical office buildings are missing out on a profitable opportunity. That’s the line of thinking, at least, behind new real estate development company LifeCenters Development Group.
The Franklin, Tennessee-based company plans to develop both senior housing communities and medical office buildings throughout the southeastern United States—often on the same or neighboring parcels of land, CEO Jeff Tallman tells Senior Housing News. This approach, he believes, will help LifeCenters Development stand out amongst senior housing competition and more effectively turn a profit.
“I think it’s a unique approach,” says Tallman, who has more than 30 years of land development experience under his belt. “There are only a few [senior housing owners] in the country that have a similar approach.”
LifeCenters Development sets out to purchase more land than it needs for a typical independent living, assisted living or memory care community, he explains. In addition to medical office buildings, LifeCenters envisions building various commercial interests on the extra land—think coffee shops, restaurants or parks—that would better the lives of the senior housing residents living nearby.
Ultimately, this strategy can lead to a margin of profit if or when LifeCenters opts to sell off the extra land.
“Our vision isn’t simply to buy more land then sell it, but to buy more land, improve it in a way that contributes to the quality of life of the seniors who live there, then sell it,” LifeCenters Chief of Staff Jim Britt tells SHN.
LifeCenters Development Group has yet to build any properties so far, but a combination senior housing-medical office building project in Huntsville, Alabama, as well as a project in Murfreesboro, Tennessee, are slated to begin construction within the year. LifeCenters has partnered with Louisville, Kentucky-based DMK Development Group on the projects, which, together, total more than $70 million.
A ‘Natural Progression’
Though the stability of the senior housing industry originally attracted Tallman to enter into senior housing real estate, he feels that the medical office sector “has really come into its own.” Tenant stability plays a big role in his mindset.
“When doctors move in they don’t like to move out,” Tallman says. “It creates a sense of alignment.”
Additionally, though it remains to be seen how many other senior housing owners eventually follow in LifeCenters’ lead, Tallman believes the evolution from owning senior housing communities to also owning medical office buildings is pretty logical.
“Medical office is just kind of a natural progression,” he says.
Written by Mary Kate Nelson