Developers Eye Hotel Conversions as Next Senior Living Opportunity

As senior housing development continues to take cues from the hospitality industry, conversion projects that transform defunct hotels into senior living communities might be more trouble than they’re worth, though it largely depends on the property type.

Resident acuity levels and complying with varying states’ building code requirements makes hotel conversions more feasible projects for independent living transformation, rather than assisted living, says Greg Hunteman, president of Pi Architects.

“It’s much simpler to do independent living that complies with [regulations] and makes sense from an affordability standpoint,” Hunteman says. “Codes are much more flexible on IL than they are on AL—there’s less things to fix and accessibility is easier to accommodate.”

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Austin, Texas-based Pi Architects specializes in designing senior living communities mostly in its headquartered state and one project in Waveland, Mississippi. One of Pi’s projects converted an old convention hotel in Dallas, Texas into a luxury independent living, assisted living and memory care community dubbed Windsor Senior Living.

Converting the community presented several challenges, specifically in getting the building up to code with assisted living and memory care requirements as mandated by Texas’ Department of Aging Services (DADS).

Everything from meeting certain ceiling height and corridor width (5ft-6ft) requirements, to adjusting the building’s mechanical, electrical and plumbing systems in compliance with assisted living regulations needed to be done for the conversion.

For a multi-story development like the Windsor, which tops between 9-12 floors, there was also the challenge of building with non-combustible materials.

By law, the Texas DADS requires multi-story assisted living developments to use non-combustible construction such as metal studs, whereas other states like Oklahoma and North Carolina allow a multi-story assisted living development to be built using wooden studs, Hunteman says.

“Finding a building that meets existing requirements is a key and lends itself to [hotel] conversion the easiest,” he says. “It’s a tough conversion to make.”

F&F Realty, Ltd., a Chicago real estate developer and hotel management company, found a building in Palatine, Illinois, which it sees lending itself well to a senior housing conversion.

The company, whose portfolio consists of hotels, apartments and restaurants across the Chicagoland area, is planning to transform Palatine’s now-defunct Hotel Bollero into a 118-unit independent living community for seniors age 55 and older.

F&F has already received zoning approval for its project named The Grand at Twin Lakes and is currently in the midst of entertaining bids from contractors and submitting for final permits, says Eli Finestone, director at F&F Realty.

Although the developer has yet to put hammer to nail for construction, it’s already working to overcome the challenges of transforming a non-purpose built structure into senior housing.

“A main hurdle is the room sizes and seeing what we can put into hotel-size rooms,” Finestone says.

Originally a 192-room hotel, F&F scaled their project down to 118-units, which Finestone says will allow them to provide residents with more living space by combining hotel rooms into one-bedrooms and keeping larger rooms as studios. Of the total 118-units, 89 will be one-bedrooms, with the balance being studio units.

In addition to the interior transformation, F&F also has plans for major exterior changes to the building as well to make it more visually appealing.

“Currently, it’s a very boxy look,” says Finestone. “There isn’t a warm and inviting feel, so we’re trying to give it a more residential look on the outside.”

The developer plans to invest between $8 million to $10 million into the conversion, which also includes an array of amenities such as an on-site movie theater, private dining rooms, and social areas for various activities, crafts, games and family time. Project plans also call for the development of a 7,000-square-foot retail building attached to The Grand at Twin Lakes.

If all goes according to plan and F&F Realty secures permitting to begin the conversion, construction can begin in May and The Grand at Twin Lakes could open as early as the first quarter of 2015, Finestone says.

The Grand at Twin Lakes is the only senior living-hotel conversion F&F has under its belt and the developer’s second foray into senior housing. Also in the company’s portfolio is Concord Place Retirement & Assisted Living Community in Northlake, Illinois.

“The Palatine project is the only conversion so far, but we’re always looking,” says Finestone.

Written by Jason Oliva

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