Comments

  1. In the Seniors Housing (as with any business with huge fixed real estate costs), achieving break-even (cost = revenue) is the first key benchmark. Thereafter, any operating profit directly improves the bottom line.

    Also, since NOI is key to valuation, achieving higher occupancy combined with the 20% increases in revenue unlocks the value of the property and the Return on Investment (ROI) to the Owner. Ultimately, a sale to other family members or a 3rd-party sale, then locks in the return to be used on another project or saved. 🙂
    Chris Foley
    Sr. V.P.
    Equity National Seniors Housing Brokerage & Advisors
    cfoley@Equity.net

  2. One of the most under-appreciated amenities is well designed in-unit laundry facilities. For decades, developers of mufti-family housing, both conventional and senior living, have view laundry as having no role in boosting rental values. Consequently, they have tended to put the cheapest machine in the smallest space. Witness the 24" top-loading stacks in hall closets.

    Laundry is an essential life function and one that is critical in senior homes for physical, psychological, and social reasons. I am 69 and people my age start to leak. Individual laundry is then a matter of sanitation and privacy. It is literally about washing your dirty linen in public.

    The other aspect is social. When a woman moves into a typical facility, many the life functions that have been part of her existence are either provided or minimized. Consequently, laundry assumes a disproportionate importance. This is especially true of the older generation but applies to younger generations as well. In-unit machines become essential and front-loaders with a "sanitizing" cycle are particularly popular. Equally important is design, which takes me back to the opening paragraph.

    Doing laundry requires a place to conveniently store detergent, fold clothes and put them on hangers before they wrinkle. In the typical closet installation, the only storage is on the floor. The folding area is the bed and the hanger rod is a doorknob. This is mostly a failure of imagination.

    New front-load washers, ventless dryers, and floating pans make it possible to design a fully functional laundry center in a 52" x 26" space. However, it requires looking at laundry as an amenity that enhances rents, not a no value component like a sink.