recreational and educational options, and within the building, residents find — as an extension of their homes — a suite of lifestyle-oriented amenities.” The development is immediately adjacent to the 273-unit Landmark on Grand River student housing community, also designed by BKV Group. “The development offers intergenerational fusion while fully serving each distinct demo-graphic,” adds Harris. On the mixed-use end, BKV designed Abiitan Mill City, an independent living, assisted liv-ing and memory care community in Minneapolis’ Mill District. The project includes ground-floor retail and outdoor recreational space. Public offerings include a fit-ness center where personal train-ers work with residents and non-residents, restaurant that doubles as the development’s dining hall, music center and a parkway along the Mississippi River. “The mixed-use design at Abii-tan Mill City lends itself to commu-nity engagement, but let’s consider other ways to create similar connec-tions through existing spaces,” says Harris. “An indoor pool might be used for exercise classes and therapy contracted with a third-party pro-vider in the community. The bar-ber/beauty shop could deliver spa services such as manicures, pedicures and massages facilitated by local businesses. Peer-led edu-cational programming or courses taught by local colleges can be held in lounges or other larger spaces.” Affordability still a concern BLACK DOG CAPITAL ADVISORS Over 45 years of experience building award winning companies Merrill Gardens and Pillar Properties • Strategic solutions for value recovery in senior housing • Capital for the acquisition and development of Active Adult/55+ communities PLEASE CONTACT US TO LEARN MORE: The penetration rate of seniors housing — the percentage of age-qualified residents that have chosen to live in seniors housing — has reportedly held steadily around 10 percent for several decades. On one hand, that’s a good thing. As the number of seniors grows, a steady penetra-tion rate means the number of occupied units will increase. But NIC MAP Vision’s Gardner suggests that improving the pen-etration rate and making seniors housing more affordable for the middle class walk hand in hand. “The majority of seniors hous-ing inventory currently available is tailored to serve high-income seniors. Therefore, this historical penetration rate is best suited for analyzing products aimed at serv-ing a similar demographic,” says Gardner. “This historical trend is less precise when applied to new product types, such as active adult or middle-market offerings, because these products were not as prevalent in historical supply and are aimed at different consumers.” NIC’s research shows that less than half of middle-income seniors will be able to afford the average seniors housing and care costs in 2029. The original 2019 “The For-gotten Middle” research paper says that 59 percent of seniors will have annual financial resources of $60,000 or less, making them unable to pay for assisted living. “If we, as an industry, intend to boost the adoption of seniors hous-ing products, we must develop products to serve seniors of all backgrounds, including middle-income seniors and their families,” concludes Gardner. By way of advice on how to improve affordability, Dagher again returns to the idea of flexibility. “Build fewer amenities and more multi-purpose rooms. Most facili-ties built in the last 10 to 15 years tried to incorporate a lot of amenity areas that may not be used enough to justify their costs of construction. Operators need to evaluate their facilities to determine what ame-nity areas are truly getting utilized versus ones that are not.” He also suggests that adaptive reuse projects are a great way to lower construction costs, leading to lower rents. What’s more, middle-market seniors housing supply was already lagging demand before the effects of the pandemic and difficult economic factors slowed development down even more. In 2017, NIC forecasted that it would take 17 years at then-current construction rates to build the addi-tional 750,000 seniors housing units needed to serve the middle-income market. In the years since, NIC MAP Vision data shows that con-struction timelines have extended on average and construction starts have slowed. “We see a massive opportunity for investors and capital providers to fill the supply-demand gap and ensure that tomorrow’s seniors are well served and taken care of,” says Gardner. “This could hap-pen in the form of developing new seniors housing assets or being a pioneer in developing active adult or middle-market products.” Bill Pettit 206-619-3549 Billp@bdcapadvisors.com 14 Billy Pettit 206-498-0762 Billyp@bdcapadvisors.com Located across from the Michigan State University campus in downtown East Lansing, Michigan, this BKV project is part student living (Landmark on Grand River), and one part active adult (Newman Lofts), with both being positioned as market-rate residences. www.seniorshousingbusiness.com Seniors Housing Business July 2023
Seniors Housing Business July 2023: Page 14
