As demand for senior housing is on the rise, investor interest is matching up with the trend. Gradually increasing market activity has attracted a sturdy competition, commanding for innovation and a greater variety of services. Retirement communities are upgrading and diversifying their offer, in a race to attract residents and satisfy their unceasingly changing needs.
Pathway to Living has been an owner, operator, manager and developer of independent, assisted living and memory care communities in the Midwest for the last two decades. Maria Oliva, the company’s chief operating officer, spoke with Multi-Housing News about the demand, challenges and outlook of the senior housing market.
What are the latest innovations in the senior housing sector (in connection to amenities, management, marketing, etc.)?
Oliva: Technology will play a growing role in senior housing, as it has in other real estate asset classes. A growing number of startup companies are establishing technologies that meld hospitality and care services, making them a perfect fit for our communities. Additionally, we’re seeing more on-demand services being offered—for example, ride-sharing partnerships that support transportation independence, choice-driven dining that allows residents to choose what and when they eat; and apps that make it easy for residents to sign up for classes, schedule appointments and make purchases within the community.
What challenges do you face as a manager of senior housing communities in 2018?
Oliva: The greatest challenge in 2018, and likely in the foreseeable future, is attracting and retaining staff. While always a top priority to carefully screen and recruit people who have the passion and heart to work in senior housing, it is now a significant challenge for operational success, due to several market conditions, such as the lowest unemployment rates in decades reducing the sheer number of people available, or the explosive growth of senior living developments and resulting number of new service and care positions. Another factor is the younger generation of workers who don’t necessarily select senior living as their career path.
Can you think of a specific property that is a good reflection of your overall strategy? What can you tell us about it?
Oliva: Azpira Place of Lake Zurich, a 120-unit senior living community in Lake Zurich, Ill., completed in May 2017, highlights our overall future strategy. Azpira Place provides well-appointed, apartment-style assisted living units, purposefully designed common area amenities and thoughtful interior design at a moderate price point, compared to other new developments in the market. We believe we can replicate this model and provide more attainable housing for area seniors without sacrificing the high level of care and engaging lifestyle experiences our residents—and their adult children—have come to expect from a Pathway community.
You offer various living options, such as memory care or assisted living. Which are in highest demand and why? How do you see this going forward?
Oliva: Though demand varies by market, we are seeing a strong need for both assisted living and memory care. Across our portfolio, we’ve also seen demand for customized care options rather than a one-size-fits-all model. The biggest risk factor for Alzheimer’s disease is age, and the population is aging, so the need for purposeful memory care programs will only continue to increase.
Which are the most popular common amenities in your communities?
Oliva: Amenities that promote wellness, independence and socialization are important for our communities. We consciously design spaces to have multiple uses that encourage a lively, communal environment. Some examples include:
- Bistro—with separate breakfast and lunch menus, as well as a coffee bar
- Bar—fully equipped bar for daily social hour, viewing parties and special events
- Fitness center/yoga studio—with hydraulic machines equipped with software to track and monitor individualized fitness programs
- Art studio—purposefully designed space to explore a variety of instructor-led art programs
- Wellness center—residents are just steps away from a doctor’s office and gym where they can receive physical and occupational therapy
What are your predictions for the future of the senior housing market?
Oliva: Development, in the long term, will still be a viable growth strategy as demographics shift and generational tastes change. Senior housing will still be an important housing option in the future, but the offerings will have to evolve. The traditional assisted living and independent living care segments as we know them today will be different five to 10 years from now, so we’re already anticipating how that will impact design, marketing and operations.
Oliva: Yes, strategically we’re expanding outside of the Midwest to larger metropolitan areas with sound demographic fundamentals such as economic and population growth. Waterton, a multifamily owner and operator, is our partner and has a presence and market knowledge in larger markets outside the central U.S. It’s natural for us to follow in their footprint. We, however, will remain very disciplined in our site selection and acquisition pursuits.