Watermark Opens $330 Million Highrise as Other NYC Luxury Projects Near Finish Line

The first of a spate of luxury senior living communities has come online in New York City.

Watermark Retirement Communities has announced the opening of The Watermark at Brooklyn Heights, the $330 million redevelopment that turned the Leverich Towers Hotel in Brooklyn into a luxury senior living community with 275 units and a variety of high-end amenities and services. The community was originally slated to open in March, but that date was pushed back due to delays related to construction and the Covid-19 pandemic.

Other similar projects slated to welcome residents in the weeks and months ahead include Maplewood’s Inspir Carnegie Hill project, which it’s undertaking with Omega Healthcare Investors (NYSE: OHI); and Sunrise at East 56th, a senior living highrise from Welltower (NYSE: WELL), real estate firm Hines and Sunrise Senior Living.

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The Watermark project may provide early indications of how severely the Covid-19 pandemic has complicated the long-anticipated openings of the New York City senior living developments. The Big Apple has a dearth of private-pay senior living options, creating an expectation that these large and expensive projects would fill up due to robust demand. But, the pandemic has raised questions about demand for senior living in general, depending on whether and when older adults feel comfortable moving into communal environments.

At Watermark, reassuring new and prospective residents about safety, and making some operational adjustments related to the move-in process, are proving to be important. But the Watermark team is also selling new, higher standards of senior living from both a physical plant and operations perspective.

The Watermark at Brooklyn Heights is one of the properties in the Tucson, Arizona-based operator’s Elan Collection of luxury senior housing communities. It’s also one of a handful of new high-end senior housing developments exemplifying the demand for luxurious senior living services in the Big Apple.

“I have worked in some really nice, luxury communities,” said Rocco Bertini, executive director of The Watermark at Brooklyn Heights. “Hands down, this is [like] a five-star hotel.”

Watermark operates 63 senior living communities across 21 states.

Inside the NYC community

The building at 21 Clark Street in Brooklyn dates back to 1928, and has a storied history. It is perhaps most famous for being a hotel that once hosted Brooklyn Dodgers players during home games. And the building served as a national hub for the Jehovah’s Witnesses until 2017 when it was slated to become senior housing.

The Watermark at Brooklyn Heights still resembles an upscale hotel today, with 50,000 square feet of high-end amenity space for residents and an intricate design. The community houses multiple upscale and diverse restaurants along with a lounge-like library bedecked in walnut wood paneling and shelving, with leather and velvet seating. Other amenities include an art gallery and studio, movie theater, performing arts center, salon and spa, fitness center with a yoga and pilates studio and an indoor heated therapy pool.

Rates range from $8,295 for a studio apartment to $19,500 for a two-bedroom/two bathroom residence. Private equity investor Kayne Anderson Real Estate Advisors and Tucson, Arizona-based Watermark Retirement Communities acquired the property in 2017 with real estate investment and services firm Tishman Speyer.

The architectural team for The Watermark at Brooklyn Heights included Richard DeMarco, principal of Montroy DeMarco Architecture; and Andres Escobar, partner and design principal at Lemay+Escobar Architects.

To keep residents safe amid Covid-19, Watermark is screening anyone who enters the community, limiting the number of family members new residents can bring along during the move-in process and regularly disinfecting the building, among other measures. That process is informed by the company’s national Covid-19 task force led by COO Karen Mlawsky.

So far, the community has about 45 deposits from residents, with another three or four expected to sign on by the end of the month, according to Bertini.

One of the biggest challenges thus far has been demonstrating to residents who made deposits that the community is a safe environment, and that Watermark has all the necessary precautions in place amid the Covid-19 pandemic, he added. Residents and their loved ones often ask questions about safety, visitation and communal activities — and Watermark answers them with a policy of transparency.

“We have full disclosures, signage throughout the building and everything is encapsulated in a manual with all our contact information, contact tracing, screening processes and infection control [guidelines] at our front desk,” Bertini said. “It’s there for anyone to review, and it serves as a guide for the management team and my staff.”

Still, while the pandemic has made prospective residents more cautious about making the move into senior housing, it has not stymied demand for senior living in New York City, according to Bertini.

Part of that has to do with the needs-based nature of assisted living and memory care.

“People that require memory care needs, or they require assistance with activities of daily living, they’re still going to seek out senior living,” Bertini said.

It’s the independent living residents who own their own homes and are still active that are the harder sell, he added. But, Watermark is able to win those residents over by touting the community’s lifestyle offerings.

In addition to its resort-style amenities, Watermark has hired a former film and theater director to lead activities and programming at the community, such as live music and theater events, arts and music classes; and social outings to museums, Broadway and local theater performances and cultural events.

“Your independent living residents, we’re convincing them because we’re selling a lifestyle,” Bertini said.

Watermark points to several other trends that are helping to support demand for senior living services in New York City. These include a historically low supply of senior housing despite growing demand for those services in the city, and the fact that the NYC market for high-end senior housing has shifted from a predominantly entry-fee structure to one centered on higher monthly rates.

At the same time, senior housing companies are now on more equal footing with other real estate uses, such as condos or retail, when acquiring new land or buildings. For example, Watermark came out on top among nearly 40 competitive bids for the Brooklyn property when it acquired it in 2017.

While market-watchers will keep an eye on progress at The Watermark, attention will next shift across the river to Manhattan. The next senior living projects scheduled to open are Inspir Carnegie Hill and Sunrise at East 56th, both of which are slated to open later this fall.

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