Industry Reinvents Luxury Housing

Balfour Senior Living founder and CEO Michael Schonbrun delivers communities that would appeal to his mother, a fashionable, fun-loving, well-traveled New Yorker looking for a “Four Seasons experience.” Pictured is the Pompeii Pool and Spa at Balfour Senior Living’s Riverfront Park in Denver. Balfour Senior Living founder and CEO Michael Schonbrun delivers communities that would appeal to his mother, a fashionable, fun-loving, well-traveled New Yorker looking for a “Four Seasons experience.” Pictured is the Pompeii Pool and Spa at Balfour Senior Living’s Riverfront Park in Denver.

From butlers to spas to fine dining, operators put emphasis on service, but shouldn’t assume all customers want the same amenities.

By Lynn Peisner

Most seniors housing communities offer more than care and a nice place to live. A pool, fitness center, quality dining — these are the bare necessities most residents of an average for-profit rental community expect for the dollars they spend. 

So if it’s all basically the same, how do so-called “luxury” properties move the needle on units, amenities and services they deliver to the wealthy senior?

Luxury offerings vary by owner and by region. They can, however, be broken down into two simple categories that Vi Living President Randy Richardson applies to his 10 luxury life plan communities: environment and experience.

Vi comes from the Latin word vita, meaning life. The company says it exemplifies a dedication and enthusiasm as an organization to providing quality environments, services and care that enrich the lives of older adults.

Entry fees at Vi’s life plan communities, all of which are located in affluent areas throughout the United States, vary from $250,000 to $4 million plus a monthly fee, which averages from approximately $3,500 to $6,500. Vi owns and operates all 10 of its life plan communities, with a total unit count of 4,062. 

At Bentley Village in Naples, Vi completed an $80 million redevelopment that opened in 2017 with two new clubhouses and an additional 72 apartment units attached to the main clubhouse. The entrance fees for this specific group of apartments average $1.1 million apiece, plus a monthly fee.

For these costs, residents live in an environment that looks and feels like an exclusive, posh resort. This means multiple pools and 18-hole golf courses at some properties. Residential homes and apartments are spacious, with high-end finishes and custom colors for the paint and carpet. The average age of a Vi resident at move-in is 78 to 80.

The communities offer many amenities including several dining venues, health and fitness clubs, activity programs, movie theaters, art studios, and on-site salons to name a few. Programming includes instruction in writing, art and music, guest speaker and lecture series, clubs, cultural outings, social functions and more. Richardson says each Vi community is constantly exploring new and unique opportunities for residents to experience.

Service is where Vi aims to truly differentiate. Vi chefs are certified and receive training at the Culinary Institute of America. The communities offer 24-hour valet and concierge services and salons with full spa menus. In the care department, licensed nurses are available 24 hours a day, and several wellness programs involve physicians, personal trainers and yoga instructors. 

Richardson asserts that the daily life experience matters more than the buildings, amenities and grounds. The quality of the staff really makes a difference. He says the results of a recent survey revealed that 93 percent of Vi’s residents have or will recommend a Vi community to their friends or family. The reason for that high mark is the community’s staff. 

“In this industry, the average turnover rate is 45 to 50 percent,” he says. “If you’re turning over half your workforce every year, there’s no way that you can provide consistent, high-quality service and care every day. You just can’t do it.”

Richardson reports Vi’s employee turnover rate is 20 percent, and more than 30 percent of its employees have been with the company for over 10 years. This is due in large part not only to offering a competitive salary and benefits package, but also to the company’s focus on training and development, promoting from within and on employee-centric programs, such as tuition reimbursement. 

“The high-quality service and care provided by our outstanding staff translates directly to high resident satisfaction,” says Richardson.

High-end look

Luxury communities often provide special investment and attention for interior design standards that set themselves apart in a market. Louisville, Colorado-based Balfour Senior Living, for example, is committed to elevating architecture and design in the seniors sector. Phill Barklow, chief operating officer of Balfour Senior Living, says that some communities that call themselves “luxury” don’t look any different from moderately priced communities.

“Luxury seniors housing is an overused term in our industry and has become a bit of a misnomer,” says Barklow. “What we have observed is that seniors housing projects exist in luxury markets, but often the traditional seniors housing architecture and interiors dominate the developments and decrease their luxury appeal.”

Balfour has brought interior design and architecture in-house, which enables the company to work in partnership with national architecture firms that may not specialize in building seniors housing.

Balfour Riverfront Park community in Denver is a repurposing of the historic Moffat Depot. Opened in 1906, the Georgian Revival style depot was the hub for a rail line its founder, David Moffat, hoped to extend to the West Coast. The routes, known as the Moffat Road, were never completed, and the building went through a series of tenants and periods of vacancy until Balfour purchased it. The company returned the building to its former glory and opened it in 2014 with independent living, assisted living and memory care residences.

In 2015, Hospitality Design magazine awarded the community the Best Design award in the senior living/health care category.

The magazine noted that the interiors of Balfour Riverfront Park were influenced by Dorothy Draper & Company’s Carlton Varney, one of the country’s best-known interior designers, with products from Schumacher, Kindel Furniture and Moore & Giles leather. The restoration of the train depot retained the building’s 21-foot ceilings and palladium windows.

“Our CEO was inspired to create Balfour after researching retirement communities for his mother, a fashionable, well-traveled and fun-loving New Yorker who only wanted a Four Seasons experience,” says Barklow.

For programming, Balfour focuses more on engaging its residents with outside activities in the arts and travel, and communities provide chauffeur and valet services around the clock.

Butlers and wine tasting

Mount Laurel, New Jersey-based Brandywine Living places a high premium on service. In fact, for about 20 percent more than a typical assisted living unit, residents can opt for a Serenade unit, which comes with butler service.

“In our opinion, people care less about what the door knobs are made of than they do about the level of service you get in a luxury product,” says Brenda J. Bacon, co-founder, president and CEO of Brandywine Living.

The Serenade units offer residents extra privacy and personal attention. Butlers can be tasked with breakfast in bed, shopping, picking up dry cleaning, cocktails, meals — the sky’s the limit. These units also include upgraded décor and private lounges. 

A typical assisted living suite at Brandywine averages $6,000 to $6,500 per month. Serenade units cost 20 percent more. Neither figure includes the cost of care and medications.

Brandywine owns and operates 29 properties and will soon be announcing a new development in Potomac, Maryland, where the average household income is $181,890. The portfolio currently contains 2,783 total units, 2,122 of which are assisted living, 606 are memory care and 55 are independent living. 

Kayne Anderson Real Estate Advisors (KAREA) is a luxury owner focused on delivering customized programming. The firm just closed a $1.85 billion fund earmarked predominately for seniors housing. The private equity firm likes to build in high-barrier-to-entry markets, such as San Francisco and Napa Valley, California, two markets where KAREA has seniors housing developments underway.

“Kayne Anderson only invests in private-pay rental communities and, with few exceptions, all of our communities offer amenity-rich offerings in best-in-market buildings,” says Max Newland, managing director with the company. These buildings offer units with finishes such as granite countertops and high-end cabinetry, and amenities such as pools, wellness programs and multiple dining venues, including private options.

“We also tailor our product offerings to a given market,” says Newland. “At a new community in Arizona, for example, we offer equine therapy programming for residents. In our project in Napa, we’ll offer a wine tasting studio comparable to what would be found at a local vineyard.”

Tucson, Arizona-based Watermark Retirement Communities relies on local arts organizations to deliver a luxury amenity package. 

The company also targets high-barrier-to-entry markets for its communities, such as The Watermark at Beverly Hills in Beverly Hills, California. The property is dubbed “boutique assisted living in the heart of Beverly Hills” and offers room service, personal shopping, door-to-door dry cleaning and pantries continually stocked with a resident’s favorite treats.

Watermark Chairman David Freshwater says he plans to differentiate his luxury community with unique programming. “We’re not interested in entertaining our residents, but rather we strive to engage them. We are committed to forming affiliations so that we create an inclusive community, not an exclusive one.”

In Tucson, Arizona, for example, the three Watermark communities enjoy a relationship with the Southern Arizona Arts and Cultural Alliance. The partnership brings courses on music, painting, sculpting and more directly to the properties.

“How many senior communities offer metal working, drama classes or something as esoteric as music theory class?” asks Freshwater. Depending on the level of care provided, rents at Watermark communities range from $7,500 to more than $14,000 per month.

Giving them what they want

The Ridge Senior Living owns assisted living and memory care communities in Holladay, Utah, Salt Lake City and Denver. According to Chief Operating Officer Mandy Hampton, technology is a key component of the company’s luxury offering. Residents enjoy individual touch screens outside their doors, where they can upload photos of their families and receive community announcements. 

The Ridge also differentiates itself in the market through custom interior design. 

The Ridge conducted focus groups during development of the Denver property and learned that the outdoors were very important to prospective residents. The development team went back to the architects and design team and asked them to bring the outdoors indoors as much as possible. 

“That’s why our properties have huge windows and great views,” says Hampton. “For us, it’s about being smart with design. It’s also incredibly important for our brand that, as a resident progresses in the level of care, the finishes and attention to detail do not decline.”

It’s tough to measure the return on investment in a luxury community, and it’s not always easy to know how to give wealthy seniors what they want. 

“One thing we’ve observed in large-scale studies is that overall, customers in our communities today don’t feel they’re getting value for the money spent,” says Margaret Wylde, president and CEO of Oxford, Mississippi-based ProMatura, a longtime researcher and consultant to the industry.

Common wisdom might dictate that the more a resident is paying, the more activities an owner should offer. But this isn’t always true. Wylde says that research conducted on behalf of the American Seniors Housing Association has shown that as the number of activities goes up, the sense of feeling at home goes down. Communities that had the highest number of activities on their calendars had a significantly smaller proportion of residents who felt at home.

“More is not necessarily better,” she says. “In our community planning research seminars to learn what qualified prospects want and are willing to pay for, we have found that even in luxury communities, prospects do not want an abundance of amenities. And, in some seminars we’ve conducted, we’ve learned that they are willing to pay more to have greater flexibility in their services package.

“Do they want everything done for them? Do they want the community to look like Club Med or a Ritz-Carlton? Not usually. Of good quality, yes. Tasteful yes.”

Because not every wealthy senior has a cookie-cutter personality, Wylde urges upscale property owners to put more effort into differentiating their communities. 

“They could probably do a better job of learning who their prospective customers are and understanding the lifestyle they want.” 

“When prospects feel they belong because they meet customers with similar interests, they are more likely to buy,” concludes Wylde. “No matter what the price tag is on a community, what makes a great day for most people is the same: They want to do what they want, when they want to do it, with the people they want to do it with.”