With construction costs rising and the supply of talented staff diminishing, doing business has never been more expensive for seniors housing developers.
As such, both developers and operators are seeking new ways to save money. Increasingly, these groups are considering the role design plays in their projects, with a particular emphasis on identifying design concepts and elements that save on the bottom line without compromising the property’s sense of livability.
A panel of seniors housing developers and operators gathered at the Westin Buckhead Atlanta on Wednesday, Aug. 23 as part of InterFace Seniors Housing Southeast to discuss development trends in today’s market. More than 400 industry professionals attended the conference.
Moderator Will Childs, executive vice president of seniors housing for Oracle Healthcare Advisors and based in the firm’s Atlanta office, led the analysis of how construction and labor issues alike are driving developers to think outside the lines.
At the most fundamental level, many new designs for seniors housing properties share the goal of repurposing common and outdoor spaces, according to panelist Alan Moise, chief investment officer for Atlanta-based Thrive Development Partners.
“Overall pricing for development projects in the Southeast and mid-Atlantic is probably up about 6 percent this year,” said Moise. “Because of this, we’re taking a much harder look at unused flex spaces and common areas to create efficiencies within the building, particularly with properties located in tighter development sites.”
Scott Gensler, vice president of development for Baltimore-based Erickson Living and a fellow panelist, noted that rising development and operating costs are nothing new in the seniors housing space. Consequently, fine-tuning building designs is instrumental to his firm’s development practices.
“In climates that are appropriate, we’re really emphasizing putting amenities outside and maximize our use of outdoor space,” said Gensler. “We’ve also brought in people who analyze our designs and determine if there are elements that we’re overlooking that are going to cost us more.”
The panelists all agreed that the competitiveness of today’s market dictates a fresh approach to design.
Panelist Tom Brockwell, a founding partner of California-based Big Rock Partners, noted that his firm goes so far as to contract with architects that have zero experience designing seniors housing projects, just so the properties will have a novel look and feel to them.
“Our thought process was we don’t want to build something that looks like everything else out there,” said Brockwell. “We wanted to make sure that people didn’t feel like they were walking into a nursing home — the sliding doors, the stickers, the people sitting out front — we didn’t want that.”
Brockwell added that the emphasis on an upbeat look that made the property approachable extended to the interior design as well.
The panel’s discussion of the role of design quickly transitioned into analysis of the kind of amenities that today’s properties should offer. The panel was unanimous in its view that amenities included in today’s projects should be geared toward the next generation of seniors housing customers, for which the average age is a bit lower.
“The younger Baby Boomers coming in tend to stay up later; they don’t necessarily want to eat at six o’clock,” said panelist Jimmy Taylor, COO of Alabama-based Omega Communities. “Offering additional dining venues that don’t require cranking up the kitchen has become a major area for us to cost-effectively augment our designs.”
With an overall younger customer base, 24-hour dining options have become a more common feature in the seniors housing space. The same holds true for technology as many incoming seniors are proving to be savvy with everyday electronic devices.
As such, developers must be more mindful of integrating features like Wi-Fi and cell phone service, as well as tangible items like hi-definition televisions, into their designs.
“We’re always looking to find ways to lower the average age of our buildings,” said panelist Jeff Arnold, COO of New York-based United Group of Cos. ”So we want to offer a product that is aesthetically pleasing not only to them, but also to their children who help them make these decisions.”
— By Taylor Williams