American House CEO’s Upbeat Take on Senior Housing in the Midwest
Here’s why Dale Watchowski expects the region to show continued growth and stability.
Roughly a year after Monarch Alternative Capital and American House Senior Living Communities joined forces to acquire, develop and manage senior housing properties, the joint venture continues to take advantage of high market demand to expand its footprint.
American House Senior Living Communities now owns 34 properties in Ohio, Michigan and Illinois, but it also operates assets in Florida, New Hampshire and Tennessee. Most recently, the company opened a 174-unit community in suburban Chicago and a 150-unit property in Bloomfield Township, Mich.
“We are continuing to see growth and stability in the Midwest market, and I believe this to be true for the next 12 months as well,” Dale Watchowski, CEO of American House Senior Living Communities and President & CEO of REDICO, told Multi-Housing News.
Here’s what else he shared about his projects in the Midwest and expectations for the senior housing sector.
What can you tell us about your relationship with Monarch? How has it evolved?
Watchowski: Our relationship began several years ago when we purchased a high-rise office building that required a significant turnaround. Given Monarch’s deep health-care expertise, execution capabilities and financial commitment to the existing relationship, the next step was to introduce them to our senior platform, American House Senior Living. The synergy between Monarch and American House led to a partnership that enabled us to execute on our vision of providing high-quality housing for the senior community and further expand our footprint.
Monarch believes that the senior housing industry is at an inflection point due to the juxtaposition of a growing elderly population against the backdrop of a recent significant slowdown in the construction activity of new properties.
What is the average occupancy rate across your Midwest senior housing portfolio? How has it fluctuated in the past couple of years?
Watchowski: Currently, we are seeing an average of 85-86 percent occupancy in the Midwest. No doubt, the pandemic was hard for American House, as it was for all senior living operators. We saw a dip during the COVID-19 pandemic and, as we started rebuilding, we have seen a significant increase.
Are there any amenities at your communities that residents seem to enjoy the most?
Watchowski: Increasingly, seniors want an enriching lifestyle that gives them the services and amenities to enjoy an engaging, entertaining life, full of experiences. Because of this, we are seeing a desire for newer spaces and richer amenities.
Our amenities include restaurant-style dining featuring fresh and healthy chef-prepared meals, casual bistros and pubs, game lounges, activities centers and libraries, on-site theaters, spas that include salon, nails and massage services, as well as fitness and wellness centers. In our Florida region, we also provide resort-style heated swimming pools and shaded lounge areas.
Between now and 2030, a total of 10,000 Baby Boomers will turn 65 every day. By that same year, seniors will make up over 20 percent of the population, according to the U.S. Census Bureau. Today’s seniors don’t see retirement as a time to relax, but more as a time of transition. A time to turn their attention to the joys of life, such as family, friends, hobbies and adventures.
Why are Midwestern markets good for senior housing development and investment?
Watchowski: The demand metrics for senior housing are strong in many areas of the Midwest. The Baby Boomers will hit their early 80s—the age we are now seeing seniors enter senior housing—in 2030. Currently, the average age of our seniors is 76. This presents the possibility for an increase in demand for senior space going forward and substantially in the markets that are already favorable.
In a study completed by Bankrate, Michigan and Ohio are among the top five best states to retire when factoring in a range of criteria. Michigan boasts the best affordability in the nation, based on the combination of a low cost of living and a light tax burden. The state also did well in wellness, placing No. 12 in that category.
Do you think the Midwest can outpace southern states such as Florida when it comes to retirement places?
Watchowski: Due to the senior population in Florida, we don’t necessarily expect the Midwest to outpace the Florida market, but we do expect growth in some hot spots we’re targeting in the Midwest.
Please tell us some details about your most recent project in Illinois.
Watchowski: One of our newest communities recently opened in downtown Oak Park, Ill. It is one of our premier senior communities, located on the newly redeveloped corner of Madison Street and South Oak Park Avenue, with a total of 174 units, comprising 74 independent living units, 65 assisted living units and 35 memory care units.
The new senior living community enhances senior residents’ lifestyles and meets their current and future needs. American House Oak Park is in a great walkable area with many community amenities surrounding the building, including well-appointed units with great views both downtown and throughout Oak Park.
Are there any other developments that you completed recently?
Watchowski: We recently just celebrated the grand opening of American House Village at Bloomfield. This completes the redevelopment of its The Village at Bloomfield property in Bloomfield Township, Mich. From inception, REDICO envisioned a development that would serve the broader community in every conceivable way. The Village at Bloomfield includes multifamily housing, fitness, medical, hotel rooms, grocery, convenience retail, home goods and office.
This was a project from a previous owner which failed during the 2008 recession. The ruins had sat for nearly a decade, creating an eerie landscape of windowless building frames that was memorably dubbed “stonehenge” by Oakland County Executive L. Brooks Patterson, who has long desired to see the land redeveloped.
REDICO’s vision for The Village at Bloomfield was an 87-acre development including retail, office, dining, grocery, hotel and multifamily residential, and a new parking structure. And now, we are pleased to complete our development with housing for seniors. The Village at Bloomfield is a true mixed-use development in a market or location where the demand was met with a robust response to our desire to effectively program the site.
American House Village at Bloomfield features 150 units, offering independent living in a modern, but cozy community setting. Amenities and services will include restaurant-style dining, a salon, a fitness and wellness center, a game lounge and an activities center.