In 2024, senior living developers, investors and operators are upgrading and repurposing their communities.
For example, about a quarter of IntegraCare’s portfolio has recently undergone “a major makeover or a memory-care conversion,” CEO Larry Rouvelas told Senior Housing News.
And IntegraCare is hardly alone in going big on renovation and repositioning projects, as capital market conditions and other headwinds have made it difficult to pursue ground-up development.
This year, Senior Housing News is showcasing how developers, investors and operators are renovating, repositioning and reimagining senior living for a rapidly approaching generation of older adults. Our annual BUILD conference is returning on November 20 and 21 with a new name, (Re)BUILD, to reflect the current times. The event will bring together operators, developers, capital providers, architects, interior designers and many other professionals for two full days of networking opportunities and insights on the future.
Sessions already planned include fireside chats with Charter Senior Living CEO Keven Bennema and Retirement Unlimited President Doris-Ellie Sullivan, a primer on how to prevent senior living communities from becoming obsolete, mastering the art of the community turnaround, and best practices for CapEx calculations. Buzz is building as we continue to add great new speakers to the agenda. Click here for more details and to purchase tickets.
Senior Housing News reached out to this year’s upcoming panelists to talk about what they see ahead in senior living construction and development. What follows are their answers to questions on top development trends, growth strategies and conditions in the coming year, 2025. Their answers reveal that even though conditions are challenging for new construction, forward-thinking providers are hard at work both upgrading communities and creating new, re-envisioned products for the next generation.
Development Trends:
In our latest design, we went with more common space. Adaptable multi-purpose common areas where they can be used for various activities. Example: Large common area with pizza oven and demonstration kitchen, but also has the space to use as an activity room. Integrating more smart home features. Alexa, lights, thermostats. We are adding yoga studios. We still have gyms, but want to have an area for yoga and similar activities. [We have] a variety of dining spaces versus just one large dining room such as bistro’s, rooftop martini bars and a breakfast cafe.
Strategies for Growth:
We are growing through acquisition right now.
We are purchasing distressed assets and taking on some third party management contracts. We have one building under contract to close Nov. 1 and one third party contract in California starting on Aug. 1.
Our strategies on buying distressed assets involve quite a bit of networking. We stay in close contact with brokers, lenders and capital sources. We look for off market deals as well as listings. Recently, several properties that we made offers on have been listed, but we ended up not getting them. We still follow these buildings because they often go off the market. Maybe the owner was asking too much or they fell out of contract with another buyer. They may come back around once the owner realizes he is not going to get what he wants or someone in contract ends up not executing. The building we have under contract now is an example of one we lost but fell out of contract and we stepped in.
Construction and Development in 2025:
I am anticipating interest rates to come down helping get some capital off the sidelines for new construction. Construction costs are now stabilizing now, and I believe that will continue.
If inflation stabilizes and we do not go into a recession, we could see a boom in development. However a big factor in this happening will depend on the upcoming elections. We are currently working on building design and evaluating markets for new development growth. We do not have any land tied up as yet but hope to do that in 2025 and start a pipeline of new development.