As resident demands shift, developers look to urban high-rises to provide a new lifestyle for seniors across the continuum of care.
By Jeff Shaw
Manhattan is the ultimate high-barrier-to-entry market, which is the reason the populous island really has no assisted living communities to speak of. But that’s about to change, and dramatically so.
Giant healthcare REIT Welltower has partnered with international real estate firm Hines on two projects in Manhattan. The venture is currently developing a 17-story community on the Upper West Side and a 16-story community in Midtown.
Another REIT-based partnership is also building a high-rise tower on the island: Omega Healthcare Investors partnered with Maplewood Senior Living, and the companies are constructing a 23-story community on the Upper East Side.
Although there are affordable seniors housing communities and independent living communities on Manhattan, the three towers will be the only assisted living options in the borough at the time of opening.
The prevailing wisdom has developers working more and more on high-rise senior living for a variety of reasons:
• High barriers to entry such as exorbitant land costs, rising construction costs, a challenging entitlement process and limited availability of plots give a competitive advantage to those who can clear those barriers. This leads developers to urban infill locations, rather than wide-open rural and suburban plots.
• Seniors — the incoming baby boomers in particular — are becoming more and more interested in retiring to bustling, active areas. This means they want to live in downtown metros rather than be “put out to pasture” on a huge campus outside the city.
• The demographic force of incoming baby boomers means that the seniors housing industry will need more senior living of all types in the next 10 to 15 years, both urban and suburban.
“Seniors don’t want to hear ‘now you’re old.’ They want to hear ‘you’re still a part of the community,” explains David Fik, president of Lantz-Boggio Architects. “That sense of community usually happens in an urban or semi-urban area, which means you have to go vertical.”
Lantz-Boggio designed Heartis Buckhead, an 18-story high-rise seniors housing property currently under construction in Atlanta’s ritzy Buckhead neighborhood.
Although Fik has experience in tower construction, this was his first project specifically for seniors housing. He doesn’t expect it to be his last.
“I’ve done high-rises in the past. I thought I left those once we got into senior living, so this is an exciting opportunity. Now I’m realizing that this is not going to be a one-off. This is going to be more of a norm,” explains Fik.
What follows are case studies of seniors housing urban high-rise projects currently opened or under development.
Case Study #1:
Home is where the Heartis
In 2018, Caddis Healthcare Real Estate bought a 10-story medical office building in Atlanta, which is when the company conceived of Heartis Buckhead.
“We realized there was sufficient land on that plot to develop seniors housing, and the existing office would benefit from the new parking structure,” says Jud Jacobs, partner and executive vice president of development. “The site dictated high-rise construction and the market supported that.”
The project will rise 19 stories, span 279,319 square feet and feature 213 units of independent living, assisted living and memory care. Caddis broke ground in June for completion in early 2022.
The community is located near The BeltLine, Atlanta’s massive and popular rails-to-trails project. While this creates valuable pedestrian and bicycle traffic to the community, it also adds another layer of complexity to the development efforts.
“We’re part of the BeltLine overlay district. There’s another layer of zoning and urban planning requirements,” says Jacobs. “One of the things it calls for is activity at the street level.”
A street-level market café will be the anchor of that activity. While not open to the public, it will allow residents to feel more ingrained in the surrounding neighborhood. Other amenities at the property will include a pool with a bar and grill, as well as a rooftop sky lounge with another bar and restaurant.
The sky lounge has “exceptional views of the BeltLine and Atlanta skyline,” according to Tami Cumings, vice president of Caddis’ seniors housing division, and can also be rented out by residents for private events.
The urban location allows the design team to focus on a style that’s more like luxury condominiums or hotels, which will appeal to the high-income residents accustomed to high-rise living, says Cumings. Monthly rents for independent living apartments will start at $3,700.
Important challenges for the design team included finding an efficient way to drop off and pick up elderly residents, and creating easy access to parking on a much smaller plot, says Jacobs.
Although this is the first high-rise senior living project for Caddis, Cumings believes there are more in the company’s future.
“As baby boomers age, they’ll be much more understanding of high-rise living. There are markets where it makes sense and the land works and the demographics work, where people will be receptive. We’re open to replicating this.”
Case Study #2:
Belmont Looks Up
Belmont Village Senior Living is planning to finish a new community in Fort Lauderdale, Florida, this fall that rises 12 stories and has “fabulous views of the ocean,” which is less than half a mile away, according to Patricia Will, Belmont Village founder and CEO. The community will offer independent living, assisted living and memory care.
The company is a big believer in high-rise seniors housing development. The company famously incorporated 11 stories of seniors housing into a Hyatt hotel project in Mexico City, and is planning to break ground on a 17-story community in La Jolla, California, by the end of the year.
Will notes that the company originally wanted its Lincoln Park project in Chicago to be 17 stories instead of six, but was unable to get government clearance to build that high.
“If you believe as we do that seniors want to be in the neighborhoods where they were before, in neighborhoods that have lots of activity, land is really precious,” says Will. “There’s really no choice but to go up.”
The company will build a high-rise in Coral Gables, Florida, as part of its newly announced partnership with Baptist Healthcare System. At this development, Belmont plans to “push the envelope with respect to the size and girth of the building,” says Will, as well as implement a progressive healthcare component that focuses on telemedicine and preventive medicine/activities that keep residents out of the hospital.
Will believes Belmont’s Mexico City project is the future of the high-rise trend, incorporating a wide variety of mixed-use functions.
“It’s opposite the best healthcare system in Mexico, with the best hospital across the street. We’ve got retail and restaurants on the ground floor. We’ve got up to 10 stories of seniors housing and care. Above that is a Hyatt hotel up to the 20th floor, and over the same garage is a 10-story medical office building. All of that is connected on the fourth floor via a sky bridge. The entire complex is on just one-and-a-half acres.”
Will says developers should plan on this trend continuing in the long term.
“The largest markets in the country are urban environments where people are used to living vertically. Increasingly we’re seeing the baby boom generation move back to the downtown area, selling single-story houses to be closer to the action. It’s only natural that they’re going to want to stay in those areas when it comes to seniors housing and care later on.”
Case Study #3:
Ocean Land Goes Way High
Multifamily developer Ocean Land Investments founder Jean Francois Roy’s roots are in seniors housing, having developed multiple projects in the 1980s and 1990s in Canada before selling them and moving to Ft. Lauderdale, Fla.
His first seniors housing project in the United States, Riverwalk Residences of Las Olas, will rise 42 stories, making it the tallest building in Fort Lauderdale upon completion. The community will offer 192 units of independent living, 152 units of assisted living and 52 units of memory care.
Amenities will include restaurants, a rooftop bar, full-service spa, fitness center, virtual sport rooms, theater, outdoor pool, hotel rooms, on-site doctor’s offices and valet parking. The project will also feature a ground-level gourmet market that will be open to the public.
The property is located near downtown Fort Lauderdale’s Riverwalk, museums, the Broward Center for the Performing Arts, shopping and dining. Residents can also take classes at nearby Broward College.
Building at that scale is not a get-rich-quick proposition. In this particular case, the development process has been ongoing for three years, and Ocean Land won’t even pour the foundation until later this year. Construction is expected to take about 30 months, according to Roy.
The location is worth that pain, says Roy.
“It’s right in the core of Fort Lauderdale, which has 17 high-rise buildings — hotels, multifamily units, condominiums — right in the heart of downtown. This was the last piece of open land left. The most important and special feature of this project is right on the Tarpon River, with a 3.5-mile boardwalk right out front.”
Over the last three years, Ocean Land has built five high-end condominium projects within a mile of the Riverwalk Residences site, several of which were targeting baby boomer-age residents. Roy believes that experience has given the company insight into what types of residences and amenities the incoming senior population will desire.
“Riverwalk will be ahead of its time because we’re designing for the baby boomers. It will be extremely modern, and not feel like other seniors housing. It will be like the design of a Four Seasons hotel.”
Case Study #4:
Low-Cost High-Rise
Not every new seniors housing tower development is targeting the luxury customer. In 2018, Columbia Residential opened Tenth & Juniper, a rehabilitated affordable seniors housing high-rise in Atlanta’s burgeoning Midtown neighborhood.
The 13-story building was originally constructed in 1974. The Atlanta Housing Authority (AHA) brought Columbia Residential into the project in 2015 to rehabilitate the property into 149 affordable housing units. Although the property was already affordable housing, it exclusively serves the disabled and those age 55 and older following the renovations. It’s now classified as an independent living community
Thirty apartments are reserved for residents earning up to 50 percent of area median household income, and 119 units are reserved for residents earning up to 60 percent of area median household income.
The rehabilitation project redesigned the units and added several amenities, such as a fitness center, business center, upgraded laundry facilities, exam room, community room, recycling center, covered terrace and outdoor patio.
Building improvements and upgrades included energy-efficient façades and exterior walls, new plumbing systems, two new elevators, new windows, upgraded electrical systems, energy-efficient appliances, HVAC systems and more.
“We pretty much gutted it down to the skeleton and redeveloped the entire interior, including every unit and the common areas and amenities,” says Yolanda Johnson, senior regional portfolio manager for Columbia Residential.
A full-time resident services coordinator helps arrange a variety of outside services for residents, including transportation and activities. The property is fully occupied, with a two- to three-year waiting list, says Johnson.
“We just keep that wait list open indefinitely, so it’s never closed. If someone walks into our property, they can always apply. We constantly take pre-applications.”
Like the luxury projects, location is key. Tenth & Juniper is in the heart of Atlanta, two blocks from its largest public park and two blocks from a MARTA rail station. Physicians and grocery stores abound in the property’s neighborhood.
The negative side of the urban location is parking. With a mere 28 on-site spaces, the community offers less than one space for every five apartments. A parking space in Midtown can run over $100 per month, which is not affordable to residents, says Johnson. As a result, most rely on family and public transportation.
Despite the many roadblocks to this type of affordable development, Columbia Residential is already contracted to build several more communities in metro Atlanta, all in partnership with the Atlanta Housing Authority.
“We have to have partners like AHA that see that affordable housing is much needed,” says Johnson. “With those types of partnerships we can do a lot more of this in the future.”
Case Study #5:
Mather’s Capital Idea
Like Belmont Village, Mather LifeWays is a believer in the high-rise seniors housing concept.
In 2009, the company built two towers in Evanston, Illinois, just north of Chicago. Two blocks to the east of the location are beaches along the banks of Lake Michigan. Two blocks to the north is Northwestern University. Two blocks to the west is a stop on the Chicago Transit Authority rail system.
The project has been a huge success, according to Mary Leary, Mather’s CEO and president. As a result, the company is now working on its second high-rise project, this one in the Washington, D.C. suburb of Tysons, Virginia. Both projects are continuing care retirement communities simply named “The Mather.”
“We learned that active, older adults are very interested in living in urban settings to continue being an active part of their community,” says Leary.
“Tysons is in the process of reinventing itself. It is becoming a
very pedestrian-friendly community, and we love the site that we’re pursuing because it’s a two-block walk from the Metro [public transportation] station on a direct line to the nation’s capital. It’s going to be a very walkable site adjacent to retail, services and restaurants. It will be a great place in which to live.”
So why take 10 years between high-rise projects if the company believes in them so strongly? Quite simply, development in this niche real estate sector is fraught with challenges.
Leary notes that the entitlement process is incredibly difficult for high-rise developers, and development/construction costs are much higher than in a standard seniors housing project. Additionally, many cities will require ground-floor retail, “which is not part of the core business to senior living operators.”
The Tysons project will include 14,000 square feet of ground-floor retail, but Mather is using a broker to help lease and mange the space. Part of the retail area is reserved for a community center with lifelong learning programs that specifically cater to a seniors clientele.
Although the high-rise will feature a 42,000-square-foot amenities level with four restaurants and a large fitness center, Leary says the community will essentially have many “free” amenities, since there are so many things to do right outside the door. The community’s website boasts that it is “near historical sites and landmarks, national parks, nationally ranked golf courses, scenic hiking and biking trails, boating options, and popular travel destinations.”
Given the desires of many baby boomers, Leary believes high-rise senior living is a trend that will continue to grow. However, she cautions the commercial real estate community against taking the long, complicated and expensive project lightly.
“Operators and developers really need to understand what they’re getting into when they seek to develop in such a location,” says Leary. “Such projects are not for the faint of heart.”