Mixed-use development in senior living is on the rise, and the creative thinkers are winning.
Whether including senior living or not, a common template for residential mixed-use is a single building with public retail, dining or both on the building’s ground floor, and apartments and condos above. This model is popular in senior living, too.
But a new report from Senior Housing News shows the creative ways senior living providers are delivering the value inherent in mixed-use, while thinking outside the box to create new avenues for care delivery and business success.
Here is a look at four recent examples of creative mixed-use senior living.
A skybridge, a hospital, a hotel and senior living
Lesson: Think creatively to increase walkability and deliver care
Case study: Belmont Village Santa Fe
Location: Mexico City
Opened: May 2017
Units: 133 (67 assisted living, 32 memory care, 34 separate memory program)
Ownership arrangement: Belmont Village Senior Living owns the building in a partnership with investors in Mexico City, and acts as landlord
Care operator: Belmont Village Senior Living
Occupancy: About 33%, as it is still in the fill-up stage
Construction cost: $55 million
Reason for mixed-use: When Houston-based senior housing owner and operator Belmont Village Senior Living prepared to open a $55 million mixed-use assisted living and memory care tower in Mexico City, Belmont Village CEO Patricia Will saw a very small piece of acreage with room to build up, not out.
The mixed-use approach made sense due to the city’s population and land density.
“It made sense if you can conquer that [density] problem to put more than one use on the land,” Will says.
The Mexico City investors found the land. Belmont Village took over after that. Will and her team created Belmont Village Santa Fe (BVSF), which is mixed-use in two ways. First, in its own building it offers retail and restaurants on the ground floor, 11 stories of senior housing, an eight-story Hyatt Hotel above the senior housing and underground parking. All of this sits on just an acre and a half of land.
Second, across the street from BVSF is ABC Medical Center — the top hospital in Mexico City — along with a medical school. While the hospital system does not own nor control the land, they were consulted about what they felt the development most needed.
The connection between the hospital’s needs and that of the development are physical too: the Hyatt and the hospital are connected via skybridge. The hospital serves the senior housing and vice-versa, while the Hyatt gives family members of the senior housing a place to stay while visiting.
“All of these uses work incredibly well together,” Will says. “It demonstrates that in dense urban markets where it is difficult to find and acquire land, you can combine uses which helps you pay for the land, but also creates synergies that would probably not be there if they were not all attached.”
Senior living as hospital tenant
Lesson: when health care and senior living team up, care — and business — thrive
Case study: American House Grosse Pointe at Cottage
Location: Grosse Pointe Farms, Michigan
Units: 84 (40 independent living, 29 assisted living, 15 memory care)
Ownership arrangement: Henry Ford Health System’s Cottage Hospital owns the building and sold two floors in a condominium arrangement to American House Senior Living Communities, which developed those floors for senior living
Care operator: American House Senior Living Communities
Occupancy: 98% — American House’s portfolio averages just above 92%
Construction cost: undisclosed
Reason for mixed-use: When the business model for the Henry Ford Health System’s Cottage Hospital became untenable, American House was there to help. The hospital, located about 10 miles northeast of Detroit, was shifting from an inpatient care model to more outpatient care.
This left the hospital with significant operational losses — they had too many beds. They reached out to nearby American House to find a solution. The two entities partnered up: American House purchased two floors in the hospital in a condominium arrangement and converted one floor to assisted living and the other to memory care.
“Our residents are very pleased because those services are right there on site,” says American House CEO Dale Watchowski. “What we’ve found is that our residents, if they weren’t using physicians of Henry Ford, they’ve shifted to Henry Ford as their health care provider.”
The condominium structure is American House’s preferred arrangement for mixed-use.
“We’re very pleased with the form of ownership,” Watchowski says. “We are in the senior housing business, and we do that well. Henry Ford is in the business of health care and they do that well. We can live and benefit synergistically through the relationship.”
Watchowski is not just CEO of American House, but also CEO, COO and president of commercial real estate developer REDICO. While some senior housing providers get tripped up by the other uses in mixed-use, Watchowski does not.
“The reason I decided to pursue mixed-use development is because I am a bit of a hybrid,” he says. “REDICO provides commercial real estate services and has done so for 50 years, and American House provides operating experience and has done so for 40 years. Without the history in knowing how each of those respective asset classes performs, it might be a scary prospect to embark on a project that would include a mixture of these uses.”
Chinese culture with an all-ages offering
Lesson: serve an affinity group with intergenerational elements to create a unique living experience
Case study: Aegis Gardens at Newcastle
Location: Newcastle, Washington
Opened: February 2018
Units: 131 (all assisted living)
Ownership arrangement: Aegis Living owns the building and acts as landlord, collecting rent checks from business tenants
Care operator: Aegis Living
Occupancy: about 22% and “growing quickly”
Construction cost: $52 million
Reason for mixed-use: As chairman and CEO of Bellevue, Washington-based senior living provider Aegis Living, Dwyane Clark created Aegis Gardens of Newcastle to serve a Chinese community that totals nearly 600,000 people in Seattle and the nearby cities of Portland, Oregon, and Vancouver, British Columbia.
“We didn’t want to build a typical retirement home,” Clark says about his 131-unit assisted living facility in Newcastle, Washington. “We wanted to build the epicenter of Chinese life in the Northwest.”
The community, which opened in February of 2018, is a five-story mixed-use building covering 128,521 square feet. Clark developed the project with a goal of creating an intergenerational community of health care, culture and education. To that end, along with its more traditional dining, tea room and spa offerings, Aegis Gardens includes a cultural center and lecture area, with a preschool slated to open in September.
“We have 48-year-old people coming to our lectures,” he says. “Because of that, our 83-year-old residents feel like they are mainstreamed into life. It doesn’t feel like an old folks’ home. It’s much more lively.”
While the on-site dining, including one of a chain of nonprofit cafes called Queen Bee, gives Aegis a traditional mixed-use feel, its primary mixed-use mission is cultural. The lecture area focuses on topics such as Chinese medicine, longevity, Tai Chi and financial planning.
Unlike many other vertical mixed-use communities, Aegis Gardens of Newcastle is not in an urban center, and wasn’t built with intense land constraints. It was designed exclusively based on Clark’s desires and instincts for what care should be. He adds elements when he sees that they are “programmatically accretive” to the lives of residents.
“A lot of people look at mixed-use as an obstacle,” Clark says. “We look at it as an opportunity.”
The affordable senior housing library
Lesson: meet a community’s need and make a community whole
Case study: Independence Branch Library
Opening: Library will be open by the end of 2018, with the housing available in early 2019
Units: 44 (all affordable independent living units, including 30 units with rent subsidy)
Ownership arrangement: Evergreen Real Estate Group will be the building owner and property manager for the senior living, with the library as tenant
Care operator: Evergreen Real Estate Group
Construction cost: Approximately $23.8 million
Reason for mixed-use: In October of 2015, the Independence branch of the Chicago Public Library was destroyed in a four-alarm fire. This was a devastating loss for its community — despite floating from location to location, the library had been part of the Chicago Public Library system since 1914.
When community activists began a movement for a new, permanent library, the mayor’s office, library system and Chicago Housing Authority teamed up to combine a new public library with affordable senior housing.
Chicago is opening three such projects, with the libraries open for business at the end of 2018 and the housing available in early 2019. The project at Independence is a single structure with 44 units of affordable, independent living, 30 of which include a rent subsidy.
“In many ways, libraries have become a kind of community center,” says David Block, director of development of Evergreen Real Estate, which is building two of the three library-housing projects, including the Independence. “That’s why co-locating them with senior housing makes a lot of sense.”
The library and housing are financed together, with the senior living making the project more attractive to the city. Evergreen will be the building owner and property manager for the independent living, with the library as a tenant.
“If you have a big, sprawling campus, it may feel more isolating than a mixed-use campus,” Block says. “Many of the clients or the customers of the library are seniors. And for many of these folks, particularly low-income seniors who don’t have cars, it’s a way for them to stay connected, to get access to services, to connect with peers. Having senior housing connected to these buildings really creates a natural constituency for that library.”
This article draws from the new report, “Strategies for Mixed-Use Development in Senior Living.”
Click here to access the complete report, which takes a deep dive into the three templates for mixed-use senior living, and reveals how senior housing leaders are combining new models for care with new boosts to the bottom line.
Written by Jack Silverstein