Developers and operators seeking their share of China’s growing senior housing market pie have identified design as a way to distance themselves from the competition.
As senior living in China enters a new era, architects and designers are putting as much effort into a community’s look and feel as its functionality, Jason Briscoe, a partner with architecture firm Steinberg Hart, told Senior Housing News.
“There is a market here for just about everything,” Briscoe said.
Steinberg Hart, headquartered in Los Angeles, opened an office in Shanghai in 2000. Briscoe has been general manager of the office since 2010. The firm has designed over 10.6 million square feet of senior housing in China, ranging from sprawling, low-rise campuses to high-rise projects in denser urban areas, and collaborates with developers, government agencies and U.S.-based operators such as Watermark Retirement Communities and Merrill Gardens on their Chinese communities.
Many of these projects are ambitious in scope. Tucson, Arizona-based Watermark has an office in Shanghai and is involved in the Chinese market through consulting services, management contracts and local partnerships; one of its projects in the works is an 800-unit continuing care retirement community (CCRC) on Shanghai’s Chongming Island. Steinberg Hart is the architect.
Senior Housing News interviewed Briscoe about Steinberg Hart’s Chinese projects, the fast pace in how senior living in China is changing and how it is positioning itself for future demand.
Can you discuss the scale of the projects Steinberg Hart is designing in China, and any constraints you have to work around?
A lot of the projects we’ve been involved with have been 1,000 units or more, and our approach is to create almost resort-style communities. With our initial projects, the land had lower density requirements and they were height restricted. We can rise only a few floors and take up a huge piece of land. The amenities are distributed around the community: there are multiple dining venues, care venues, recreational.
The challenge is connecting all of those and creating weather-protected connections, creating a core that’s practical for elderly people to be able to get to on their own. We want people to move around independently, if they’re able.
When we work in a denser setting like a central business district (CBD), we’ve done both ground-up construction and repositionings. There is a lot of underutilized real estate in the CBDs. We’ve been helping a number of developers and operators evaluate buildings for their potential to be redeveloped as senior living. It’s the fastest route, skip all of the land usage issues. It saves them years, literally.
The interior design and amenities equation is the same. We just distribute them differently within a vertical building. In the vertical community, we create ways for people to move around, like indoor bike loops. Even if they can’t move out on the street, they can be active. We’re creating similar social environments than if someone was out and about.
What types of finishes are going into these developments?
In terms of finishes, it’s not so different from what we do in the U.S. They need to be durable and sustainable, because these are institutional hospitality buildings.
Stylistically, the market is expanding rapidly. Every developer-operator we work with is trying to establish their brand and find that niche that differentiates them from the competition. We have an operator from the U.S. who see that as a major element of their brand, and want their interiors and finishes to be distinctively American. We’re also working in environments with culturally historic significance in China, and we need design elements and finishes to relate to that. There is a market here for just about everything.
At the level where we work, senior living globally is a luxury product. In China, we’re targeting a high end of the market. Even a mid-level product is targeting 5% of income earners. These are people who have traveled and live in comfort. Their expectations, particularly if their children are part of the buying process, is they want luxury product. We balance that with the principles of good senior living design: comfort, safety, sensory experience.
What type of technology is being outfitted in these communities?
We’re seeing a lot of tech being developed and implemented targeted to convenience and connectivity between family members, doctors and care providers. Because of the scale of what we do, we’re not directly involved all the time in technology implementation. Because a lot of this is cloud based, it doesn’t have to be part of the hard shell of the building anymore It can be an overlay and still be almost invisible. We want the communities to feel as normal as possible and too much gadgetry can make a home feel very institutional, very quickly. Our approach to integrating these elements is to have them in the background as much as possible.
One thing we see a lot, especially with less experienced developers, is a focus on the gadgetry. They spend tremendous amounts of money on these things and someone has to pay for all that stuff. There are seniors who lived through one of the worst periods, economically, in China’s history. They’re very frugal, even if they’re from wealthy families. We’re advising clients to keep the projects efficient and implement the tech and equipment that really matter, and be cautious of anything that hasn’t been tested or proven.
As it pertains to senior living, what is the regulatory environment in China like?
It’s a very new industry here and because of that, the regulation is very rapidly evolving. It has been an acute care/hospital system until very recently, and the regulations were geared toward that model. Now that the market is expanding to something we’re more used to in the U.S., the regulations need to catch up. There are regulations at a central government level and a provincial/city level and they need to be coordinated. It’s lagging behind the pace of development.
The advantage is [government entities] can make those changes quickly and unilaterally. They’ll decide it happens and roll it out the next day. Even though projects here happen quickly, it’s not uncommon for policy changes to happen mid-project we have to respond to.
What is happening here is not dissimilar to what happened in the U.S. 30 years ago. It was more about medical care for people who weren’t well in their old age. Steinberg Hart has been involved in many of the stages of evolution in the industry. Like a lot of things with Chinese development, that path will happen here but the timeline will collapse dramatically.
How hard was it for Steinberg Hart to plant stakes in China?
There was an element of good fortune. We were in the right place at the right time.
At this point, we are strategic about which clients and projects we take on. We probably turn away as much work as we accept. We’re looking for owners who share our same passions and who partner with operators who also share that passion and have an ability to take the facilities we design and make them successful. Our initial entry into the market was smooth, but our ongoing success will be directly related to the reputation of the projects we design. Reputation is only partially based on design. It’s primarily based on word of mouth and if the residents feel well cared for.
Are more of your Chinese projects involving a developer who is also the operator?
As the insurance companies start to understand the market better, they are working on their own operations companies. Ultimately, operations will shift to domestic companies just by demand. There’s a practicality limit to the ability of foreign operators to take on this demand.
It’s the same for design companies. There are just over 200 million seniors over age 60 in China, that population will expand to 300 million over the next 15 years. For that reason the domestic design and operations communities will have to take on a majority of the work. The challenges to meet that need are immense.
Written by Chuck Sudo