Despite longstanding occupancy turbulence in the standalone memory care sector, one provider continues to chart future growth.
Irvine, California-based memory care provider Silverado intends to add two hospice sites and between two and three memory care communities per year over the next five years, President and CEO Loren Shook told Senior Housing News.
Silverado has been expanding its presence for some time.
The operator made its first move to the U.S. East Coast earlier this year with the opening of a memory care community in Alexandria, Virginia. Looking ahead, the provider plans to develop additional communities throughout the Virginia/Maryland/Washington, D.C. metropolitan area, as well as in the Pacific Northwest.
All the while, a Silverado community is scheduled to open within the next few weeks in St. Charles, Illinois, and there are communities under construction in Wisconsin and California.
In June, Silverado announced it had received a $45 million investment commitment from real estate investment management firm Artemis Real Estate Partners. The financing is set to support Silverado’s five-year development plans, Shook explained, though there’s also “other money that’s coming in to do that.”
“It’s not just Artemis money alone,” he said.
Meeting future needs
Currently, Silverado operates 37 memory care communities and has 11 territories in which it offers hospice services. The provider fell just short of making Argentum’s top 10 largest memory care providers by unit count in the U.S. in 2017.
In five years, the company plans to manage between 50 and 55 memory care communities and run 20 to 25 hospice sites. Silverado intends to develop new communities, rather than acquire them. A typical Silverado building with 90 to 100 beds costs about $20 million to open, Senior Vice President of Development Paul Mullin told Senior Housing News last year.
The provider’s home care division will also likely be “30% bigger,” Shook told Senior Housing News.
Right now, Silverado serves about 950 hospice patients “on any given day,” roughly 70% of whom live outside of Silverado communities, he added. The need for both hospice and memory care services throughout the U.S. is expected to increase exponentially in the coming years, spurring Artemis’ $45 million investment in Silverado’s growth.
“The dementia population is projected to grow over 30% faster than general senior population growth in the near term, which creates a compelling investment opportunity to fill a market need for Class A real estate that will provide the highest quality of care and service for residents,” Artemis Principal and Managing Director Kelly Sheehy said in a June 15 press release.
State of the memory care industry
As an industry, memory care has seen better days.
Occupancy at standalone memory care communities nationwide spiked at 88.8% almost 10 years ago, in late 2008. In recent quarters, though, standalone memory care communities have struggled to maintain high occupancy; in fact, in the second quarter of 2016, the occupancy at these communities nationwide averaged just 82.7%.
A surge in construction activity driven by the perceived upcoming demand for memory care services may have contributed to the occupancy decline, according to experts.
Written by Mary Kate Nelson