Senior Independent Living

15 Replies

Does anyone invest in Active Senior Living that are all in a large building with common area dining and gathering areas, etc.?  (not assisted living needing medical care)  If so, what is your criteria? Any other information you can share on the subject? 

This arena will see much growth, however I do not plan to include the operational segment, rather will build and look for someone else who has the expertise to operate the facility.

Originally posted by @Kathy Stewart :

This arena will see much growth, however I do not plan to include the operational segment, rather will build and look for someone else who has the expertise to operate the facility.

Same here.  

I think I'm in the same boat as the original poster, as we are just looking into these sort of developments. So I'm too green to speak from experience. However, I've been looking deep into the ins and outs of senior living and I'll share some of what I have found.

There are several stages of care levels from fully independent living in age-restricted communities all the way to full medical care nursing homes. If you're talking about one large facility, (or any other, really) what I have seen is a very detailed pro forma done by companies that specialize in this particular field along with a pretty good market study of the area, and pretty solid assumptions. If it's a smaller building, you could probably get by without all that, though.

Having easy access to medical care is important. You will want to have regular transportation to a medical center. There is usually an RN on site.

Amenities are a must to make it marketable. It's very competitive and the market is full of giants with golf courses, aquatics, tennis courts, and lakes. If you can access cultural centers or some kind of retail by foot, that's a big plus.

Even if there is no medical care, there will be employees and it's not a passive investment for anyone that gets involved. The model is more like commercial property than residential. Whoever occupies the project is not looking at the purchase cost so much as their ROI.

The client seems to be skittish on development in general, as they are outside the building industry, but I am completely open to taking on a senior living project. They bought the lot not intending for senior living, and it was the only path moving forward that I could see to help them recoup the costs they (over)spent on the property. It seems like a great market to get into. It's a growing industry, and even when there's overall declines across the country, there's still areas that are underserved. The city was ecstatic about getting their first senior living project.

I am working with an older 16 unit apartment building with some common space/dining area and commercial kitchen.  it is handicap accessible but is fairly run down now and would some updating.  I am wondering about updating it to better independent senior housing with no medical/prescription services or anything like that.  Just maybe finished 1 bedroom apartments and providing 2 meals per day as well as possibly laundry service.   Senior living with meal providing would a new area for us. Is this a possible viable concept? Any major pitfalls I should aware of.  I am assuming health departments inspections/permitting for the kitchen but I assume a 55+ community as I describe with no medical services doesn't require any special permitting?  What level of occupancy would be necessary to support the costs of hiring someone for the kitchen work? Estimated costs on providing commercial kitchen services in a 16 unit building? Thanks in advance for your insight.  

@Greg Myroth Did you do anything on your project yet? Each state has their way of licensing and what is required. Here in California there are various types of projects that fall under Community Care Licensing. If you are dealing with seniors that are "independent", meaning they don't require any medical assistance, etc. it's basically like a boarding house. Again, you'd need to check with both state and local authorities to find out what is required. 

In CA you can have group living of up to 6 residents before you fall under stricter standards. 

Someone was talking to me the other day and said that on homes of under 16 people there weren't as stringent of guidelines as over 16, so I will be looking into that. 

I'm just starting to look back into this, as I think it might be a good direction for me.

@Karen Margrave - Hi Karen, I was wondering if you ever jumped into the retirement community space? I'm considering the BRRRRR method on a large house, converting into a 4plex and turning it into a small exclusive 65+ Luxury Retirement Apartment.

Thanks - John

I had a colleague who invested in a senior's only community. The ownership structures differ wildly. As a rental it makes more sense to me, given that you would have inheritance and turnover on a semi regular basis. 

@Karen Margrave

If doing an active adult community, similar to independent living but residents are self sufficient and want a simple lifestyle, good amenities are a must. Higher end luxury amenities will attract seniors that will choose that lifestyle. It depends where on the spectrum of costs and what you’ll be charging per bed, I worked with a developer that has done active adult projects and they made it like a high end resort.