Studying our past may show what’s ahead for the industry.
By Frank W. White III
In the seniors housing marketplace, the past 30 years have seen many things change.
While the basics of “bricks and sticks” construction haven’t transformed that much, today’s beautifully appointed facilities would be unrecognizable to previous generations.
Even before Kaufman Lynn broke ground on its first assisted living facility, the seniors housing market was changing. In the post-WWII era, those who were building housing for senior citizens catered to affordability. The objective was to build as cheaply as possible.
Back in 1997, Kaufman Lynn built the Sterling Houses — one-story assisted living facilities throughout Florida — the standard for an assisted living facility was one bedroom, one disability-accessible bathroom, a dining room and living room. We added brand new technology for the time: an emergency/life safety alert system connected to the nurse’s station. Unlike austere post-war era facilities, these buildings were surrounded with open walkways, patios and gardens.
Coming into the new century, we began to see the escalating level of demand for increasingly higher quality finishes. Thirty years ago, we were using vinyl composite tiles in corridors and units, while wallpaper was chosen solely based on cost and durability. Today, there are still essential cost considerations, but there is also a move towards more elegantly designed interiors.
Modern seniors demand modern homes
As we enter 2019, new seniors housing requires upscale finishes such as porcelain tile, European-style cabinets, quartz or granite countertops, and stainless steel appliances.
What is driving senior living most from the consumer standpoint is the desire for a “cruise ship on land” — especially among the higher income population. In 1989, seniors housing was just that: housing. In just three decades, there has been a 360-degree turnaround.
We started to see the emergence of this trend in 2002 when we built Tequesta Terrace. This Florida development by Terrace Communities is surrounded with flowered walking paths and tropical courtyards and provides a tiki lounge and several elegant living rooms complete with fireplace. There are also several recreational facilities such as an activity center, fitness center, library, computer lounge and state-of-the-art theater.
Dining preferences have also changed. The communal dining room must be open to guests, and cater to whole families. There is a focus on activities and, thus, fully outfitted gyms and community rooms with attention to comfort and acoustics. There are no more folding chairs and sound bouncing off the walls! Personal care facilities such as beautifully appointed hair salons and spas are also now the rule rather than the exception.
The Allegro at Boynton Beach in South Florida rode the same wave. Built in 2015, it is a three-story, 147,000-square-foot community on a 7.5-acre site. The facility includes two independent living wings, one assisted living wing and one memory care wing. The building provides many amenities, including common and private dining, game room, spa, sauna, swimming pool, hot tub, salon and putting green. The facility also includes an indoor and an outdoor kitchen, mechanical equipment building and emergency generator.
Demographics can be deceiving
It would seem that the current advancing age of the huge baby boomer population would automatically create a booming market for seniors housing. But the baby boomer generation is not one-size-fits-all when it comes to their expectation for where and how they want — and can afford — to spend their golden years.
What we are starting to realize is that the market didn’t necessarily account for the rise in affluent senior citizens who are gravitating to multifamily rental buildings. These empty nesters are renting units in luxury, active buildings with amenities. Lower-priced rental units are an available affordable option as well for retirees.
It is only recently becoming evident that the market may have misread this generation in continuing to focus on 55+ communities with single-family homes for active adults. While these developments have seen some success with early baby boomers in Arizona and Central Florida, today 80 percent of the 65+ population don’t want to live in these age-restricted communities. They want families, kids and amenities in their communities. Interestingly, this means that they may still want to rent a small house or condo that is “somewhat” targeted for those 55 and older, but they don’t want actual age restrictions.
Hard costs present a challenge
From a builder and developer point of view, what is affecting the near future of building seniors housing is the cost of land. Back in 1989 and even before, assisted living facilities were generally one or two stories. However, because of the rising cost of land, especially in the southeast and particularly in Florida, construction is becoming more vertical. Senior residences are now more likely to be four or five stories. In downtown Miami, there are 15-story facilities.
This land-constrained situation can be good news for builders as it is easier to get an exception from the municipality on certain rules such as parking requirements. Fewer residents have cars at this stage of life, so the “rule” is becoming one space for every two to three units.
An example of this is the Evernia Place downtown residential building we built in West Palm Beach, Fla., in 2014 for Eastwind Development Group. The 100,000-square-foot building has 90 units on six levels over a single-story parking garage. Ever mindful of the desire for amenities, the first level of living space also consists of a lobby, fitness center, clubhouse and pool.
Moorings Park at Grey Oaks in Naples, on Florida’s west coast, is one of the new breed of seniors housing. Comprising 480,000-square-feet, this CC Residential project was a new construction of 96 high-end independent living units in a new continuing care retirement community completed just two years ago. Each of the 12 buildings has four residential floors with two units each over parking. Site work includes more than $1 million in water features and a lushly landscaped resort-style site.
Senior living will reach a new benchmark with our most recent project, Siena Lakes, also in Naples. Construction is underway for the first phase of this continuing care retirement community that will open July 2021. When completed, the 30-acre Erickson Living development will feature 355 independent living units and an additional living section with 35 assisted living beds and 30 skilled nursing and memory care beds.The maintenance-free apartment homes feature community amenities including several restaurants and an on-site medical center.
The past and present for seniors housing points to a future of growth, but the years ahead will also require the industry to diversify. With the combination of economic diversity among baby boomers, a lack of consensus for what constitutes “ideal” conditions for senior living, and rising cost of land and development, the only sure bet in seniors housing is that there will be a continued need for more of it.
If the last 30 years have proven anything, it’s that each new generation of aging seniors has different needs and expectations than the one that came before it. The ability to be agile and meet those changing needs from a building and municipal planning standpoint will be what changes the next game in the seniors housing business.
Frank W. White III is president of Kaufman Lynn Construction. Established in 1989, the Delray Beach, Fla.-based commercial construction company has approximately 200 employees in Florida, Texas and North Carolina.