A continuing care retirement community (CCRC) in the greater Kansas City area is redeveloping its living units and amenities through a $90 million redevelopment phase to be completed in 2017.
But instead of going high-end and focusing on luxury updates in the renovation, the CCRC’s operator says it’s targeting the middle market for the future of its prospective residents.
Key enhancements to 44-year-old John Knox Village, which spans a 450-acre campus, include a new aquatics center, a community room and media center, courtyard, two restaurants, 163 independent-living units split between two new apartment projects and more.
“What we’re building now is in the middle market,” says John Knox Village CEO Dan Rexroth. “Back in 2006, 2007 [providers] just kept building bigger and bigger — sky was the limit on amenities and pricing. Today, we’re taking a different view.”
The net gain of new units will be 10, as many of the older apartments will be displaced by the new construction, he says. All buildings will feature Wi-Fi.
The new units and amenities reflect what seniors today are looking for, which differs from past trends, he says.
While seniors want new units with nice finishes, they’re also more careful with their budgets.
“So, we’re building really nice units, but they’re not huge — we’re trying to hit that sweet spot in the market,” he says. “Our strategy is different, not as extravagant.”
Residents in apartments being torn down will be rehoused on campus, Rexroth says, adding that those buildings had not been marketed for a number of years.
Occupancy for the village’s marketable units is 93%, he says, adding that he expects occupancy rates will increase after the redevelopment.
The Village is combing some existing units at $100,000 cost per combined unit to offer more space and an updated design. All of the first five combos, which were completed at the end of March, have sold. Phase two of the project will include construction of nine additional apartments, one of which has already sold. Common area renovations in that building cost $2.3 million.
“The square footage of apartments will dramatically increase,” Rexroth says, adding that the Village previously had to lease some of the smaller, less desirable units. All new units will follow the entry-fee model.
Last year, the Village demolished 21 older cottages and replaced them with 11 spacious villas with modern amenities and finishes. Of the first 11 new villas to be constructed, eight have already sold. Phase two of the project will create six more villas.
The Village is also completing construction of a free-standing building with 25 apartments for those with Alzheimer’s and dementia.
Following the completion of all new projects the Village will have a 100% cash to debt ratio, he says, adding that redevelopment projects come on the heels of a more conservative fiscal approach.
“From 2008 until 2012 we said, ‘Let’s be careful and hunker down — not take any risks,'” he says. “We did a little redevelopment and we paid down debt.”
In 2012 the Village saw positive indicators in the housing market that gave the company a green light to move forward on projects, he says.
“We began to say, ‘We need to redevelop so we have got to start being more forward thinking,” he says. “We positioned ourselves well. On the front end of the rebound of the housing market our timing was very good for a different way of strategic thinking.”
Key trends integrated into redevelopment projects include an emphasis on wellness and creating options for residents.
A new pool will join two existing ones on campus, and two new restaurants will join three existing ones.
The restaurants all have different menus and atmospheres.
In addition, the Village partners with local colleges and universities to provide residents with opportunities for ongoing education, he says.
The $90 million redevelopment is just the first phase of much more to come, Rexroth says.
Ziegler is serving as the investment banker for the $90 million redevelopment. Other partners in the redevelopment include Paric Corp., a St. Louis-based general contracting firm; SFCS, an architecture firm specializing in senior housing; Studio Six 5, an interior design firm; and Westwood Civil Engineering Services.
Written by Cassandra Dowell