By Bruce Cannon, VP/Director of Business Development at LCS
Adaptable designs, resort-style or boutique amenities, community-centric spaces, technology integration, dining options. At LCS Development, An LCS® Company, we see a variety of trends with new senior living construction to meet the desires of today’s consumers and future generations. Whether it’s a new development, expansion or repositioning of an existing community, demand for senior housing is healthy. Fueled by a strong economy, job growth, steady consumer confidence and an improving housing market, the future is bright for senior living development. With four decades of experience, we’ve compiled some key components to success. Here are our top considerations as you get started planning and searching for a senior living development partner.
Top considerations for new developments
- Market analysis. Conducting market studies and understanding the senior population is more important than ever. What services and amenities do seniors want and what can they afford? And of course, does the market have the appropriate number of age- and income-qualified consumers? It’s important that your development partner’s initial research also takes into account home sales, home values, time on the market, and more.
- Site selection. Location is one of the most important considerations for any development, including senior living. When assessing location, your partner should look at current availability of health services, proximity to retail and other location-driven factors.
- Competition. What is the competitive environment, what are occupancy levels at existing communities, how old are those communities, what are their pricing models, how does your community compare and how will it differentiate itself? You and your development partner need to know these answers.
- Market Penetration. This hinges on the education level in the particular market about senior living products, and how accepted the lifestyle is. Your partner should know these levels, the relationship between the components and how it can impact the development’s success.
- Financials. On the for-profit side, planning includes matching the development with the company’s goals. On the not-for-profit side, it’s knowing how to work with a board of directors and aligning the development with the board’s strategic planning goals.
Heron’s Key, a not-for-profit Life Plan Community, formerly referred to as a Continuing Care Retirement Community (CCRC) in Gig Harbor, WA, is a good example of how to effectively execute the many steps involved in developing a new CCRC project. See how our extensive team of experts collaborate with local teams to achieve successful outcomes.
Top considerations for repositioning
We’re seeing the repositioning of existing communities at an all-time high. The economic downturn of 2008 led to a great deal of deferred maintenance. Now those capital improvement projects are picking up. Here are a couple of key points to keep in mind when working with a development partner to reposition your community.
Understand differences in desires.
Studies and surveys conducted by LCS show stark contrasts in amenity preferences between current residents, future residents, and adult children. In dining, for example, a study on the desire to add a bistro found that current residents ranked it low on their priority list, while future residents (those on a wait list or hot leads) ranked it as their #1 priority. Adult children of current and future residents also ranked a bistro addition low on the list.
It’s important that you and your development partner understand the true wants and needs of stakeholders. Your design should meet these desires for your repositioning project to achieve the greatest success. Failure to gauge this correctly can result in reduced sales and occupancy, timeline delays, significant cost overruns and potential community reputational risk.
Communication is key.
Getting current residents on board with a repositioning project is important for success.
- Communicate, communicate, communicate with residents. Forums include the resident council, small group meetings and larger resident town hall gatherings.
- Focus on the facts about what’s being done and why you’re doing it, and encourage feedback.
- Convey the benefits, including how residents will benefit from the project, how it will help keep occupancy high and help keep the community financially healthy.
Regulations are one of the biggest risk factors in all development projects. They involve zoning, licenses, permits, and state and city approvals. States including Maryland, Florida, California and North Carolina have very challenging regulatory hurdles. On the positive side, an experienced project team can provide a barrier to entry for other competition. It’s important to choose a development company with experience and expertise in navigating regulations specific to senior living, as those regulations can significantly affect a project’s timeline and costs.
Balancing the partnership
It’s important your development partner provide single-source precision coordinating everything from the initial planning stages, all the way through construction and marketing of a successful development. Depth of resources and tools help drive process, create efficiencies for cost savings and deliver a project on time, allowing the community to maintain control of vision, mission and operations to successfully run the business.
The development market in senior living is healthy and poised for continued growth. This is a specialized field, and not just any company is equipped to lead a successful project. I encourage you to use this checklist when looking for a senior living development partner:
- History of success developing senior living communities
- Market research capabilities to plan for future generations
- Risk-averse approach
- Depth of resources
- Processes, tools and expertise to deliver a project on time and within budget
Let us put our experience to work for you.
About Bruce Cannon:
Bruce Cannon serves as vice president/director of business development for LCS. He has more than 25 years of senior living experience and has helped prepare more than 100 financial feasibility studies for various types of senior housing communities. Additionally, he has been involved with the issuance of more than $1.5 billion of retirement living and long-term care financings. Prior to joining the LCS Family of Companies, Bruce was chief financial officer for CRSA Management, LLC. Additionally, he served as a member of a retirement center consulting group for one of the nation’s largest audit firms. He also served as a member on a national advisory committee for LeadingAge and was a faculty instructor for LeadingAge’s Retirement Housing Professionals certification program. Bruce holds a bachelor’s degree in accounting from the University of Alabama.