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Senior Living Development News, September 11, 2014 – Senior Housing Boom in Rochester, Minnesota
Your biweekly update on people, places, projects, plus…
Top Senior Living Developments
Granite Falls Manor, Granite Falls, MN
48 SN
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Senior Housing Boom in Rochester, Minnesota
The Affordable Care Act called for, in addition to many new reforms, increased continuum of care from America's health care providers. Health systems have taken to this call to action, increasingly affiliating with other health systems or health care businesses to add a wide variety of services to their portfolios. Concerning long-term care, Rochester, Minnesota may prove to be the best example of this new type of integrated senior/medical care in the country.
Fueled in large part by a 20-year, $5 billion expansion plan to Mayo Clinic, three senior housing projects are scheduled for construction or have already broken ground in the county.
The Bluffs of Lake City, a $13.4 million project that will have 67 units at $200,000 per unit, including independent and assisted living apartments and a memory care wing, is set to break ground later this month. The Bluffs will be connected to an existing care center owned by Mayo Clinic Health System. Susan Farr, VP of business development for Ebenezer Management Services, which will manage the community, said that the affiliation with the Mayo Clinic would bring a full continuum of care to Lake City.
Madonna Towers of Rochester, Minnesota is planning to develop two new senior care properties this fall: a new $2.7 million, 16-unit (or $168,750 per unit) memory care facility on its campus, called A Garden House, and an $8 million (or $160,000 per unit) senior care facility in Byron, Minnesota. The latter property will include 20 independent living apartments, 16 assisted living units and 14 memory care units on five acres. Both properties are expected to begin construction this fall and ready to open next fall. Madonna CEO Mark Noble is quoted as saying "Benedictine Health believes Rochester and southeast Minnesota are still very promising for development." They aren't the first to see this opportunity, as the city is expecting to see upwards of 32,000 seniors flock to Rochester to be near the top notch care of Mayo Clinic.
In addition to providing a continuum of care, large medical centers are centers of research and innovation, whose expertise and innovative ideas can also be used to improve the quality of care in senior living. For example, Mayo Clinic along with Minneapolis-based Hunhu Healthcare combined to create a new interactive "pendant" which when worn will monitor falls, track movement and provide communication. This sort of technology is a great selling point to families who want to be assured that their loved ones will receive accountable, quality care, which would be available at Mayo Clinic-affiliated senior residences………Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today
Allen, TX senior care community set to break ground later this month
Christian Care Centers (CCC) of Mesquite, Texas, is set to break ground on its third senior living community in the Dallas-Fort Worth area later this month. Located in the town of Allen, the 72,000 square-foot, two-story facility will offer 32 assisted living units and 36 memory care units, as well as 22 independent living cottages separate from the main building. Once construction is complete, scheduled for August 2015, CCC will operate the facility. The community was designed by REES Architects, which has an office in Dallas, and is to be built by Adolfson & Peterson, a U.S.-based firm consistently ranking in the top 50 construction managers and general contractors in the country. The community is the first senior living community in Texas built by A&P, and is also the first collaboration between the construction firm and REES. CCC is a not-for-profit, faith-based organization that operates two other IL/AL communities: Lakewood Village in Fort Worth and Christian Care Senior Living in Mesquite, as well as a hospice in North Texas.
The cost of the development is not known, but the source of the financing is. Mesquite Health Facilities Development Corporation, on behalf of CCC, issued $30.8 million of tax-exempt Series 2014 bonds, the proceeds of which would go to refunding approximately $8.1 million in outstanding Series 2005 revenue bonds, also issued by Mesquite Health Facilities Development Corporation, fund 18 months of capitalized interest, establish a debt service reserve fund estimated at $4.48 million, and pay certain costs of issuance. In addition, the bonds will finance a portion of the construction, acquisition and equipping of the new Allen facility. Fitch rated the bonds at "BBB-" which reflected the consistently stable and strong operating results, solid 86% occupancy, manageable debt burden and reduced exposure to government payers for the CCC portfolio (the Allen facility will be all private payers). What kept the rating down were the capital burdens placed on the company because of the new construction, but that is expected to improve as units are filled.
In terms of total inventory units, Dallas has more independent living than any other metropolitan area in the country with 10,690 units, according to NIC MAP, and for assisted living, it has the fifth most with 8,085 units. There are also three new IL properties, with 435 units, under construction in the Dallas area, (representing roughly 4% of inventory) which is high when compared to the other 99 MSAs. So, reaching a high and stable occupancy may take some time, but because of the lower exposure to governmental payers, it may still be a financial win for the not-for-profit………….Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today
Expanding in Houston
Not to be left behind by the ever expanding senior housing market in the Houston metro area, three existing retirement communities are planning significant additions which would expand both their size and continuum of care through a variety of services. The Buckingham, a 323-unit senior living community consisting of 204 independent living apartments, 43 assisted living units, 16 memory care suites and 60 private skilled nursing rooms, was built in 2005, but after reaching full capacity, they sought to fill a growing need for senior care in the area. The $56 million expansion, which will cost about $300,000 per unit, will add an additional 104 IL apartments, 33 AL suites, 18 memory care residences and 32 skilled nursing rooms. The project is set to begin early in 2015 and will finish in 2017. Greystone Development Co. will consult on the development, and D2 Architects, based in Dallas, will design the expansion. Just based on our records, there will be a large number of facilities opening in 2015 alone, so how much penetration The Buckingham will see in the Houston area remains to be seen. Baby Boomers are still at least 15 years away from moving into a lot of these communities, keep in mind.
Meanwhile, a few miles down the road in Houston, Village on the Park just finished construction on an assisted living and memory care conversion. Built in 2000 as a strictly independent living retirement community, the owners, Retirement Center Management, wanted to bring a variety of services to the community in offering a continuum of care to its residents, and to potential ones too. So, in addition to the 143 IL homes already there, the new conversion adds 20 AL apartments and 20 memory care suites. If the other independent living communities in the area attempt similar strategies, that would add to the already 11 assisted living properties (many of which also include memory care) currently under construction in the Houston MSA, representing 24.3% of the Houston's inventory according to NIC MAP. So, we could possibly see an even bigger influx of assisted living/memory care units in the next couple of years. …Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today
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