When it broke ground on a luxury highrise in Manhattan earlier this summer, Maplewood Senior Living also announced that the building would launch its new Inspīr brand. Maplewood now is detailing ambitious plans to create other Inspīr communities by pursuing a multi-billion dollar pipeline of developments both in U.S. and international urban markets.
“There’s been such a pent-up demand for new senior housing product to go into these super high barrier-to-entry urban markets, what better way to meet that demand than to create a luxury brand that provides [needed] services?” Maplewood CEO Gregory Smith told Senior Housing News. “And there’s no better place in the world to kick that off than New York City.”
Over the next five to 10 years, there could be as much as $5 billion in capital deployed on Inspīr projects, he said. Maplewood and its development partners have already identified about half-a-dozen other potential locations for these communities in the United States, and the company is also scouting cities in Canada, Europe, Asia, and Australia.
Within five years, Smith anticipates rolling out at least 10 more Inspīr communities, and between 20 and 40 buildings could be up within 10 years—making the Inspīr brand significantly larger than the entirety of Maplewood today. The Westport, Connecticut-based provider currently operates 13 communities, in Connecticut, Massachusetts, and Ohio. It also recently launched a home care division.
Smith and his colleagues recently have traveled to Toronto, Montreal, London, and Paris to consider Inspīr locations, Smith said. Markets like these, which are relatively similar to the United States, likely will be the first spots for the new brand to grow.
Maplewood and its development partners might have to get more creative to bring Inspīr to cities further afield, such as in China, where they might weigh options such as starting franchises to surmount obstacles faced by foreign developers.
The timing is right to launch this effort, Smith believes. In places like New York City, where developers face extremely high barriers to entry, senior housing for years has not been seen as the “highest and best use of real estate,” he said. This has created an acute lack of supply. With demographic shifts now occurring, the status quo has changed.
Pursuing a 40-building Inspīr pipeline might sound like a bold gambit, but in fact these buildings would only serve a tiny fraction of the senior population in these urban centers, Smith said.
“When you look at the number of residents [in a typical building] versus demand and lack of supply, [development] comes to look like a no brainer,” he said.
However, he also understands it takes a certain amount of nerve to actually put up these expensive buildings.
“It’s being a leader and innovator in the space, and having the fortitude to go in and say, I see the market and I understand that there’s a demand, and we’re going to be first in,” he said.
A glimpse of the future
While Inspīr buildings will be tailored to their unique locations, the NYC highrise—dubbed Inspīr Manhattan—provides some idea of what the new brand will bring to the market and how these projects will be executed.
Going up at the corner of 93rd Street and 2nd Avenue on the Upper East Side, Inspīr Manhattan is slated for a 2019 opening. There is an estimated $270 million total project cost for the planned 23-story, 215-unit building, which will offer independent living, assisted living, and memory care.
Real estate investment trust Omega Healthcare Investors (NYSE: OHI) is the capital partner on the project, having acquired the real estate for $111.7 million. Omega also will be the capital partner on other Inspīr projects going forward, Smith said.
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In addition, Maplewood has embarked on a relationship with a “major developer,” but is not yet disclosing the name, he said.
In terms of design, Inspīr Manhattan breaks with conventional wisdom in certain ways. For instance, the amount of square footage for amenity space will be comparable to suburban senior living communities, not the smaller standards of urban projects. As part of this amenity focus, the ground floor will not be rented out to retail or other tenants.
“I said, this is all about resident experience,” Smith said. “And for us to take that away … would undermine our philosophy. If we provide an exceptional experience and care, the economics have a tendency of working themselves out later.”
As for those economics, rents are slated to start between $12,000 and $14,000 a month. On the top floors, it could be in the $25,000 range. That’s roughly in line with another Manhattan senior living project in development, involving real estate investment trust Welltower (NYSE: HCN) and operating company Sunrise Senior Living.
“We need to be competitive with highest and best use of this real estate,” Smith said. “It’s meeting the expectations of the urban consumer. This is Manhattan living. Manhattan lifestyle.”
To meet these high expectations, the 15,000 square feet of ground-floor space will be devoted to amenities, and will include a lobby area with 24-foot ceilings, sliding doors made of teak and mahogany, and a bar and lounge overlooking Second Avenue. There also will be multiple dining venues serving farm-to-table cuisine, and a “Roman bath” style wellness space that includes rain showers, massage therapy rooms, a swimming pool, and space for occupational and physical therapy.
Higher up, there will be a 16th floor “sky park,” encompassing 3,500 square feet of outdoor terraces.
Considering the sales office is not yet open, initial inquiries have been “quite rightly overwhelming,” Smith said. Not only Manhattan residents, but seniors from the Tri-State area have been expressing interest.
For Maplewood, this appears to be early validation of plans that have been years in the making.
“It may seem like we have lofty ambitions, but it’s something we’ve been considering for over five years,” Smith said. “We’ve done our homework and followed the market and we’re confident we’re going to be successful in this venture.”
Written by Tim Mullaney