A few high-profile bankruptcy filings by continuing care retirement communities (CCRCs) brought a lot of scrutiny to the whole concept, but these are isolated incidents that aren’t indicative of the entire sector, according to LeadingAge, and these types of communities have a strong future.
CCRCs were impacted by the recession and housing market crash, as most seniors moving into communities need to sell their homes before doing so. Occupancy dropped across all sectors of senior housing from the low 90s% to the mid 80s%, says LeadingAge, and in response, CCRCs began undertaking various marketing efforts and looking at operations to ensure the greatest levels of efficiency and service.
Since the recession began, the article points out, 12 CCRCs have filed for bankruptcy—out of nearly 1,900 communities. That’s less than 1%, and in all of the cases, the communities were able to remain open, and residents weren’t forced to relocate.
LeadingAge cites the economy as the common denominator for bankruptcy in all of these filings, and points out that only in one instance were residents financially impacted, when they lost rights to entrance fee refunds but were still able to live in the CCRC and receive the services they contracted for.
“In no other business sector can you say that consumers weren’t harmed except in one isolated case,” says the article.
The future of CCRCs is bright and growing. Feasibility studies and ongoing financial management continue to be sophisticated and rigorous. The demographics of the growing numbers of seniors demonstrate a strong need for CCRCs and they will continue to be built to meet this demand.
As the economy gets back on its feet, the orderly development of CCRCs will proceed and CCRCs will be built and occupied at a rate similar to the years before the recession. All in all, while CCRC development has been impacted by the recession as all of us have, CCRCs are and will continue to be financially strong and provide tremendous benefits to the seniors they serve.
Check out the full piece on LeadingAge’s website.
Written by Alyssa Gerace