Senior living projects in city centers are not for the faint of heart. Between high land and construction costs, site scarcity, lengthy entitlement processes and sticker shock for lenders, taking on this type of development is no easy endeavor—and that’s not to mention design constraints.
But given the unique strategies the majority of senior living communities employ in order to fit into specific city settings, whether that’s high-rise structures or mixed-use construction, there’s much opportunity for creativity, innovation and success.
First, developers and operators targeting this opportunity must understand there is additional scrutiny when it comes to the financing process, according to the latest report from Senior Housing News, “The Urban Opportunity: Senior Living Development and Design in the City.”
“The numbers are much bigger, which makes everyone scrutinize the operator’s ability to lease up,” says Jason Dopoulos, a managing director with Lancaster Pollard. “The biggest thing we see is that larger dollar amount transactions usually go hand-in-hand with urban projects.”
One difficulty along those lines is that projects with high price tags tend to be deals needing syndication, because one bank usually can’t handle the weight of lending entirely on its own. Investors also want to be sure the project and those involved have the financial wherewithal to withstand slower lease-up periods, Dopoulos says.
“That’s what banks look at versus projects that cost $20 million, because those can endure slower absorption than monster urban deals,” he says.
High barrier’s to entry in dense city markets, however, typically play in developers and operators’ favor when they’re securing financing. Since it takes a long time to get entitled, there’s more comfort for lenders, as it would be harder for someone to come in and compete with the proposed project. This isn’t necessarily true in suburban areas, where building today bears the risk of someone else building nearby within four months, Dopoulos says.
“There’s a better ramp to stabilize you before someone can compete with you—that’s the biggest benefit.”
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Once financing is secured and development plans are smoothed out, special attention needs to be paid to the design of senior living buildings in city centers.
From figuring out how to install green spaces in concrete jungles to completely altering the way the industry things about amenities and programming, there are several trends that have the potential to bring city senior living to a whole new level.
For example, one hot trend is to blend buildings into the fabric of the city. Belmont Village Senior Living has taken this approach with its development in Chicago’s upscale Lincoln Park neighborhood, where the assisted living and memory care community will very closely resemble the historic Nellie Black building razed to make room for it. Likewise, Balfour at Riverfront Park, a Balfour Senior Living continuing care retirement community (CCRC), includes a retrofitting of the Moffat Depot, Denver’s second train station and a city landmark.
Incorporating gardens and outdoor spaces is another essential trend for urban senior living, but this proves a challenge with limited land and the need to maximize the efficiency of a site.
But developers and operators have made do in clever ways. Lenbrook, a CCRC in metro Atlanta, designed a garden on top of the facility’s parking deck. Meanwhile, Maplewood Senior Living’s upcoming development in Manhattan will incorporate wood, light and other natural elements throughout its design, in an effort to harmonious with nature in an urban environment, says CEO Greg Smith.
In any case, developing and designing communities within urban centers is certainly appealing from a business perspective, ash as the baby boom population continues to age and consumer preferences shift, it’s likely to become hotter than ever. As the industry continues to navigate the urban challenge and opportunity, the sector is well positioned to adhere to seniors’ unique desires and distinct lifestyle preferences.
Written by Kourtney Liepelt