Link to the Springfield Business Journal article online: http://sbj.net/stories/on-watch-for-the-silver-tsunami-developers-evolve-senior-living-communities,58788?
BY: HANNA SMITH, FEATURES EDITOR
Posted online May 14, 2018 | 2:25 pm
Last edited 5:15 p.m., May 18, 2018
They redefined culture.
Baby boomers – born between 1946 and 1966 – have changed the lifestyles of today, Miller Commerce LLC owner Matt E. Miller said, and no industry is exempt.
“They brought us Woodstock and The Beatles and everything else,” he said with a laugh. “They changed the way that we do things throughout American history. They turned every industry on its head.”
That includes real estate, and it’s the reason Miller founded a subsidiary dedicated to senior housing development – Miller Living Communities.
“We were doing so much work in the senior housing space now that we thought we would just establish a senior brand that gave us more of a specific identity to these projects,” Miller said. “With 1,000 people a day turning 65 in the United States, there is a very strong indication we will be serving the needs or more seniors tomorrow than what we are today.”
Miller Living Communities officials call this the “silver tsunami,” and it isn’t the only developer riding the wave. According to Springfield Business Journal research, there are currently at least 297 independent living units, 60 memory care beds, 190 skilled nursing beds and 192 assisted living beds in planned developments in the Springfield area – adding to multiple facilities already completed.
According to the most recent census data, the national median age rose to 37.9 in July 2016, from 35.3 in April 2000. A census report cited the baby boomer generation, the oldest of which turned 65 in 2011.
Persons 65 years and older comprise 16 percent of Missouri’s approximate 6.09 million population. According to the Population Reference Bureau’s 2016 report “Aging in the United States,” Americans over 65 are projected to more than double to 98 million by 2060 – then representing 24 percent of the population.
Since opening at the end of 2017, The Castlewood Senior Living in Nixa is at 90 percent capacity, said Brenda Raynor, a marketing consultant for owner/developer O’Reilly Development Co. LLC. Inquiries are already being received for continuum-of-care facility The Township Senior Living, she said, which includes 83 independent living units, 46 assisted living beds and 16 memory care beds. It is slated for completion in November 2019.
“They pretty much fill up before they are completed,” she said.
Arrow Senior Living CEO Stephanie Harris, operator for local O’Reilly Development projects, said while new developments with modern amenities may be experiencing high occupancy rates, the majority are not.
“Only 10 percent of all seniors, age-qualified, even consider senior living,” she said. “Every senior living community in this country would fill up with a waiting list if the demand grew by even 1 percent.”
According to the Missouri Department of Health & Senior Services, Greene County’s occupancy rate is 85.6 percent – higher than the state average of 72 percent.
“We have a very high break even, so the community has to be in the high 80s, low 90s to be profitable,” she said. “Springfield is doing better than the state of Missouri, but in line with industry declines in occupancy.”
Home by design
The statistics show seniors gravitate to the modern amenities of newer developments. And although the majority of baby boomers have not yet moved into senior housing, Harris said designing housing for them must begin now. She said baby boomers parents’ currently are in senior and assisted living homes – providing experiences that are creating impressions impacting their future choices.
“We already have to design features for our community that would attract the children to say they would want mom or dad to move in to our communities,” Harris said. “That’s an early indication for what they’re interested in and what they’re responding to.”
Even with all the converging factors and variables, Miller said the designing work is the fun part. Take Turners Rock, for example. Who else designs a rooftop bar in a senior living community?
“It needs to be vibrant,” Miller said. “It needs to be the senior housing of the future.”
Located on East Sunshine past U.S. Highway 65, the roughly $30 million project includes 50 assisted living beds, 20 memory care beds and 52 independent living units. Other amenities are a modern fitness room, yoga studio and plenty of technology.
In O’Reilly Development properties managed by Arrow Senior Living, Harris said the facilities are adding swimming pools, pickleball courts and flexible media rooms with virtual reality and 2-D imaging games.
“I think those types of experiences are more commonplace for somebody that’s a baby boomer,” she said. “They’re using the technology every single day of their lives.”
Miller also is designing a senior living community with veterans in mind. Mission Ridge is planned adjacent to the Gene Taylor Community Outpatient Clinic nearing completion on Springfield’s south side. Partnering with Blue Harbor Senior Living, the facility is designed with 36 assisted-living beds, 24 memory care beds and 54 independent-living units. It is slated to be complete by early 2020.
Getting the Depression-era generation on board with the changes, however, is difficult.
“Although they are financially able to afford some luxuries, they don’t like to spend that type of money or they don’t think they are worth spending that type of money,” Harris said.
Baby boomers aren’t as cautious with spending on themselves, however, and because senior communities must begin the transition to baby boomer-oriented design, Harris said it can be difficult convincing the elder generation to enter homes.
“We compete for seniors against their own homes, not against retirement communities,” she said.
Addressing that hesitation means talking numbers.
“It’s getting them to realize that living in a senior-living community is more affordable than living at home,” Harris said. “It’s all inclusive. When you piece together all the costs they’re experiencing, adding those services together, it’s very similar in price.”
Harris said the communities she manages typically start at $2,500 a month. Seniors living in such facilities also might qualify for medical tax deductions.
Adkins said many of the seniors moving into Villas at Wicklow are paying cash for their condos using money from the sales of their homes.
“We have a lot of people moving from larger homes,” he said, “and moving into our condo project. And then we have people moving from our condo project across the street to the Castlewood.”
Not everyone can afford that, Harris said, so keeping costs down in senior living is critical.
“The risk we run with new people developing without experience is how are they going to be able to meet that affordability gap and bring best in class practices to create efficiencies and drive the cost down?” she said.
One way Arrow Senior Living has managed costs, Harris said, is through technology – from food service to medication administration and a 2-D imaging system called Foresite that monitors falls and tracks vital signs.
Harris said the industry also is fighting the stigma of nursing homes, partly stemming from baby boomers witnessing their parents’ unsavory experiences.