Greystone to Tap Huge Chinese Market With New Partnership

As the United States comes to grips with its own graying population over the next decade, real estate developers in China are looking to American senior living companies for expertise in providing both housing and health care-related services to serve their own aging boom.

Last week, Irving, Texas-based Greystone Communities announced a development and management partnership with CITIC Guoan Investment Co., Ltc. (CITIC GAI), a real estate development and finance investment firm based in Beijing.

One of the primary purposes for this partnership comes from GAI’s intention to buy from Greystone the company’s expertise in areas such as operations, hospitality, staff training and management systems, said Greystone Communities Vice Chairman and CEO John Spooner.

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“We would be mostly a consultant,” Spooner told SHN.

As part of this relationship, Greystone will essentially provide management consulting for CITIC GAI’s portfolio of senior care projects in China, including the company’s Grand Epoch City located in suburban Beijing. The company will also provide planning and operations management consulting to GAI’s high-end, large-scale senior living communities, which include projects dubbed Ermei and Beihai.

GAI has an equity capital of $840 million U.S. dollars and total assets of $5 billion USD. Though an experienced developer of real estate and several senior housing projects, the company is less familiar in the realm of operating senior housing communities with the concept of blending hospitality with housing and supportive services.

This is where Greystone comes into play.

To date, Greystone has advised more than 500 senior care organizations on a range of issues including strategic planning, development marketing and operations. The company has managed more than 100 senior living community startups, redevelopments and expansions involving more than $6.5 billion in capital costs.

While the company did not disclose financial terms—including the price for Greystone’s consulting services—Greystone said the partnership does allow for future projects throughout China, the U.S. and globally.

Some of those plans include three projects GAI intends to build soon in China, for which Greystone is assisting with operations and programming, Spooner said.

“We were impressed by their [CITIC GAI’s] commitment to their business plan and the range and scope for what they want to do,” he said.

Though there is a clear demand for senior housing in China, few U.S. providers have scratched the surface of the country’s senior care market. Genesis Healthcare is one exception. The company recently announced some small-scale initial projects in China, including opening rehabilitation facilities in a joint venture with a Chinese hospital.

Adults age 60 and older are projected to represent 24.8% of the U.S.’s total population by 2025, according to population data from the United Nations. In China, that same age group is expected to account for 19.8% of the country’s population.

But since China loosened its one-child policy in 2013, that rule is beginning to play itself forward, translating into a narrowed caregiving pool to care for the nation’s massive aging society.

This, in turn, is triggering a greater interest not only from the Chinese government as it evaluates how it will care for its seniors, but also among native real estate developers who see a great opportunity to enter the senior care market.

To make the partnership between Greystone and CITIC GAI official, the companies recently executed a Memorandum of Cooperation in a ceremony at the U.S. Embassy in Beijing—the first Chinese partnership that had the sanction of the U.S. government, Spooner noted.

“Our companies held extensive background discussions on the potential strength of the opportunities,” Spooner said. “Greystone believes that GAI and their partners offer many competitive advantages and market differentiators that will make these communities successful.”

Written by Jason Oliva

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