Senior Housing News is taking a more in-depth look at our list of Top Development Locations for 2013. This third installment features a couple southern developers with projects in or around Atlanta, Ga. Read the first installment on the Carolinas here; and the second, on Florida, here. Please note that SHN’s development list is not ranked in any particular order.
With a current temperature of 50 degrees, Atlanta, Ga. may not be the warmest Southern state heading into winter, but the state’s capitol—dubbed “Hotlanta”—could be heating up when it comes to senior housing construction.
The city ranks thirteenth on the National Investment Center for the Seniors Housing & Care Industry’s top 31 market area profiles (NIC MAP) for new development. As of the third quarter, Atlanta had a 2.61% construction versus inventory rate, compared to the average MAP31 rate of 1.99%, with 390 units of senior housing under construction.
Georgia’s 65+ cohort comprises 11% of the state’s total population, slightly below the national average of 13.3%. But its temperate climate is joined by moderate living costs, which could make the state attractive to seniors on fixed incomes. All major Georgia cities—including Atlanta—fall below the national average for cost of living, according to the 2010 American Chamber of Commerce Research Association.
Atlanta enjoys fairly favorable demographics along with fairly low barriers to entry, says Charles Bissell, MAI, CRE, the National Practice Leader of Integra Realty Resources’ Seniors Housing & Health Care Specialty Practice
“There’s a lot of talk about Atlanta, and a few deals that are under way,” he says. “It’s generally a lower-occupancy market in housing, and the housing market took a bigger hit, but I think it will eventually be a market that could be attractive.”
Similar to certain locations in Florida, land values have dropped in Atlanta, says Kevin Maddron, senior vice president of fund management for CNL Financial Group’s healthcare sector and advisor to CNL Health Care Trust for asset management.
“People who were in development had closed shop for a while due to the economy,” he says. “Now, we’re in the early stages of operators feeling like they can find sites, tee them up, and go through the pre-planning process.”
Operators are just now reaching the point of projects being able to start, and that activity is ticking up, he says. “We’re seeing it across the country—not just in Atlanta.”
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Other developers are finding the region attractive as well. Atlanta, Ga.-based senior living community developer and manager Medical Development Corp. recently opened a senior housing community about an hour outside of the state capitol, The Villas at Canterfield, as part of its development strategy.
“We’re building a footprint over the Southeast right now,” says Allen Porter, director at Medical Development Corp. “There’s very good demand right now.”
Those looking to develop may want to consider assisted living, he says. The product “has been around since the early 1980s, and [many communities] are becoming antiquated now,” says Porter. “If you’re building new assisted living communities around a bunch of older ones, it can be a good business strategy.”
Written by Alyssa Gerace