Senior Housing Market Sees Rosy Outlook Amid Improving Housing Market

As the economy begins to rebound, the outlook for senior housing is looking increasingly positive, with occupancy rates in independent-living and continuing-care retirement communities beginning to stabilize after nine quarters of decline. According to market research firm ProMatura Group, the demand for senior housing is driven by pent-up need, and as the housing market improves, so too will the demand for independent-living facilities.

The Aberdeen Heights project, a $179 million senior-living complex replacing the former St. Joseph Hospital in Kirkwood, Missouri, is a prime example of the growing demand for senior housing. With 243 apartments and a range of amenities, including a fitness center, restaurant-style dining, and underground parking, the development is already 85 percent reserved, with 10 percent deposits.

Key Takeaways:

• Occupancy rates in independent-living and continuing-care retirement communities rose 0.1 percent to 88.5 percent in the third quarter of 2009, marking the first hint of stabilization for the sector in over two years, according to the National Investment Center for the Seniors Housing & Care Industry.
• The Aberdeen Heights project is 85 percent reserved, with 10 percent deposits, and has financing from 16 institutional investors and Ziegler, an investment banking and services firm.
• The development will have four-story buildings, restaurant-style dining, a fitness center with indoor pool, an arts area, media room, club room, and underground parking.
• In addition to independent residential living, Aberdeen Heights will have 30 assisted-living apartments, 15 suites for people suffering from dementia, and 38 skilled nursing private rooms.
• Entrance fees for Aberdeen Heights are steep, with prospective residents paying around $250,000 for the smallest apartments and nearly $600,000 for the largest.
• The 18-month lead time for occupancy should be sufficient for persons who have put down deposits to sell their existing homes and raise the needed funds.

Statistics:

• Occupancy rates in independent-living and continuing-care retirement communities: 88.5 percent (third quarter of 2009)
• Reservations at Aberdeen Heights: 85 percent (as of January 20)
• Number of Aberdeen Heights units reserved: 205 (as of January 20)
• Time period for occupancy: 18 months
• Entrance fees for Aberdeen Heights:

+ Smallest apartments: around $250,000

+ Largest apartments: nearly $600,000

Sources:

• Byline: Tim Bryant, tbryant@post-dispatch.com, 314-340-8206
• National Investment Center for the Seniors Housing & Care Industry
• ProMatura Group
• Ziegler, an investment banking and services firm
• Presbyterian Manors of Mid-America
• Aberdeen Heights in Kirkwood | Post-Dispatch