Leisure Living Management Freezes 2 Development Projects, Prioritizes Covid-19 Response

A Michigan owner operator is temporarily halting construction on two senior living communities as it focuses on keeping residents across its portfolio safe from the coronavirus pandemic.

Grand Rapids-based Leisure Living Management will proceed with construction of the properties in the Michigan communities of St. Clair and Port Huron once the outbreak subsides, President and CEO Neil Kraay told Senior Housing News. The company owns and manages a portfolio of 24 communities across Michigan — primarily assisted living and memory care — serving over 1,000 residents.

When the pandemic swept across the country, Michigan Governor Gretchen Whitmer issued an executive order on March 23, ordering all residents to stay home and safe, while state and local public health officials fought the virus.

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Whitmer signed another executive order in early May easing those restrictions, including the resumption of residential and commercial construction. Leisure Living held groundbreaking ceremonies for the sites earlier this year, but had not broken any actual ground. By the time Whitmer relaxed her original order, Leisure Living decided to keep the sites dark, Kraay said.

With construction halted for the time being on the two sites, Leisure Living turned its attention to keeping residents and staff safe as confirmed cases of Covid-19 begin to climb again in Michigan and other areas of the country. The Michigan Department of Health and Human Services reported 891 new positive Covid-19 cases on July 15, the highest total in eight weeks.

To date, Leisure Living has reported no confirmed Covid-19 cases among its resident population, and only a couple of employees have tested positive but asymptomatic for the virus. The operator is regularly testing across its entire portfolio, and is accepting move-ins under heightened quarantine protocols.

Leisure Living has two other developments under construction that are nearly completed, and will accept new move-ins when they open near the end of 2020. At that point, the operator and its capital partners hope to reassess if it can restart construction on the other communities, Kraay told SHN.

“We’ve managed through the pandemic remarkably well. Our investor partners are appreciative of the focus [on residents],” he said.

The pandemic is expected to significantly slow the pace of commercial real estate construction over the next two years, including senior living. In the early days of the outbreak, cities such as Boston and San Francisco mandated that non-essential construction cease for the near-term, which affected projects such as 1001 Van Ness, the luxury senior living development from Atria Senior Living and Related Companies in San Francisco.

The virus’ impact on development extends beyond timetables. State and local building inspectors who contract the virus will have to take leaves of absence to convalesce, leaving their healthy peers to pick up the slack and potentially delay necessary permitting and inspections to keep construction projects on track. And the pandemic has disrupted supply chains, which could result in costly delays to an industry that saw costs rise 6.4% last year, and developers scaling down the size of their new projects.

Developments are proceeding in several states, however. Watercress Senior Living recently broke ground on a new community in Myrtle Beach, South Carolina. McShane Construction and Spectrum Retirement Communities broke ground on a 166-unit retirement community in Algonquin, Illinois.


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