Seniors Housing Development Mania
Houston is undergoing a major seniors housing development boom, says PinPoint Commercial principal Charlie Turner—construction constitutes over 20% of inventory. That’s as huge as it sounds; the national average is 3%. (He believes there aren’t many development opportunities left here.) Charlie, speaking at Bisnow’s Seniors Housing Summit Tuesday, says you should be very careful before starting development, particularly in trusting market studies. He says many aren’t hyper-local enough for this sector, and even a 25 bps deviation in one of the four main factors can mean a 30% difference in your demand. His advice: Look at how existing properties are doing and talk to the local medical community.
Belmont Village Senior Living co-founder/CEO Patricia Will says it’s just too easy to build in Houston and she believes most of our current development is irresponsible. She predicts Houston will be thrown out of equilibrium in the next year and a half. Patricia’s bearish on the ‘burbs (she says Katy has enough product for every resident to mature into seniors housing) but loves urban infill projects. She finds seniors want to be in the middle of everything and feel connected to the neighborhood, so most of her deals require tearing down an existing building.
First American Title VP David Crawford moderated our panel, including the discussion on the blurring of lines in seniors housing. (Monet and Robin Thicke would love it.) Patricia says the various types of seniors housing—seniors living (regular age-restricted multifamily), independent living, assisted living, and skilling nursing and rehab—have become more similar in the last 20 years. For example, most projects now include some amount of medical care. Charlie says this is a good thing because it gives potential residents lots of options. But Obamacare may drive a new division—he believes it’ll drive the “haves” into assisted living and the “have-nots” into skilled nursing, which is often government reimbursed.
Our sponsor Catamount Contractors is working on several seniors housing renovation projects for Five Star Senior Living with Rees Associates. Rebecca Mansfield (pictured with our panelist Rees founder Dr. Frank Rees) tells us they’re well underway on work at Memorial Woods and are also doing Gardens at Bellaire and a property in Fredericksburg.
