Seniors Housing Draws Customers to Mixed-Use Centers
Formation Development built Atria Cinco Ranch in Katy, Texas, as an independent living, assisted living and memory care community. The property is within the Cinco Ranch master-planned, mixed-use development, which includes the LaCenterra Shopping Center (pictured).
Generally, when one thinks about the massive, new mixed-use projects under development, a few images come to mind. Apartments, offices, hotels and retail mixed together, with some green walking trails and open spaces. Seniors housing, however, is probably not among those first impressions.
This idea is changing, though, as mixed-use developers and seniors housing owners and operators begin to see the mutual benefits that senior living can bring to a project.
The demographic wave of Baby Boomers hitting retirement age will nearly double the 65-plus population in the United States by 2050, from 43.1 million to 83.7 million, according to projections by the U.S. Census Bureau.
The tactic of integrating seniors living into mixed-use developments is becoming more common throughout the country. Usually in high-end developments, the target market is seniors with disposable income. While the projects are a one-off concept for most seniors housing developers, some are making it a cornerstone of their development philosophies.
For example, Georgia-based Formation Development Group, a subsidiary of private equity group Formation Capital, has opened four communities in mixed-use developments in Texas and Illinois since 2009. The company has a fifth currently under construction in Pennsylvania. “That’s an intentional strategy on our part,” says Mark Maberry, an executive vice president with the company.
In Katy, Texas, Formation opened The Solana at Cinco Ranch (later renamed Atria Cinco Ranch) with 126 units of independent living, 38 units of assisted living and 20 units of memory care. The community is located within the Cinco Ranch master-planned community, which includes single-family homes, nature trails, a swimming lagoon, four shopping centers and nine grocery stores.
Nearby in Houston, Formation recently expanded The Solana Vintage Park development to add 117 units of independent living. The property is located within the Vintage Park lifestyle center, which features apartments, a hotel, award-winning restaurants, boutique retailers, medical office buildings and a hospital.
The new Formation development in Cranberry Township, Pa., just north of Pittsburgh, is within a 47-acre project known as The Village of Cranberry Woods. Eventually, the property will contain a hotel, apartments, 37,000 square feet of retail space, a 10,295-square-foot restaurant and 5,000 square feet of office space. Formation’s as-yet-unnamed community will total 180 units of independent living, assisted living and memory care. The timeline for delivery has not been released.
Although The Solana Deer Park in the Chicago suburb of Deer Park, Ill., isn’t technically within a mixed-use project, the 180-unit community developed by Formation is immediately adjacent to a massive shopping center known as Deer Park Town Center as well as office parks. Anchor tenants at the retail center include Barnes & Noble, Crate & Barrel and a Cinemark movie theater, along with a wide variety of restaurants.
Although they might not sound like a natural match, retailers and seniors housing operators have a lot to offer each other, suggests Maberry.
“We look for sites and markets that are attractive to the seniors but, more importantly, to their adult children,” says Maberry. “With mixed-use, they appreciate the vibrancy and not having to drive 10 miles to the outskirts of town.”
The presence of retail around the seniors housing community is a benefit for both: the retailers get an influx of new customers, while the seniors housing operators have more benefits to offer potential residents and their families.
“The adult children can go where they’re already shopping, going to church, seeing a movie,” continues Maberry. “They can stop by, pick up mom and dad, go out for ice cream with the grandkids, go to church. The convenience and the access to other things to do are very important for our customers.”
What’s more, having a lively atmosphere and entertainment options nearby can help aging residents. Staying active is a key to aging well, and mixed-use properties offer a wide variety of activities for seniors.
LCB Senior Living is developing a seniors housing community in New Hampshire named Residence at Silver Square. Michael Stoller, the CEO of the Massachusetts-based developer, says the bustling mixed-use community encourages residents to participate in the environment outside their walls. Being able to sit outside and observe the goings-on is a benefit in and of itself.
“The location provides activities and easy access to multiple services and conveniences,” says Stoller. “Our residents don’t want to be simply housed in a building separated from the town and the patterns of everyday living. They want to partake in the activities of daily life beyond those that we provide within the walls of our buildings.”
Active seniors also provide off-hours business for retailers and restaurants. Since they are retirees, the seniors aren’t beholden to the typical work schedule of the average customer.
“We are finding lots of success with developing mixed-use communities,” says Manny Gonzalez, managing principal with KTGY Architecture + Planning, which has developed several age-restricted communities. “The number one amenity for the 55-plus age group is proximity to a grocery store, followed closely by proximity to dining and entertainment, not unlike what millennials want.”
This mutual benefit doesn’t stop with residents and families, either.
Developer W2 Real Estate Partners is building The Village at the Triangle, a seniors housing community within the massive Triangle master-planned development in North Austin. The company points out that the people who will staff the community will shop and eat in Triangle.
“From the mixed-use project’s standpoint, the 80-plus employees that will work at the Village at the Triangle senior living project will further support the retail and restaurants, making the project more viable,” says Steve Freche, executive vice president with W2.
Meanwhile, the seniors housing operators get their own boost. Employees want to be within these active areas, where shopping and eating are a stone’s throw away from where they work.
“One of our biggest challenges is the staffing, and in these mixed-use developments we have an easier time attracting that staff,” says Formation’s Maberry.
Some employees might even live or work a second job within the larger development, adds Maberry.
“A big part of our industry is service, so it’s easier to recruit people who live right there in the master-planned community and can walk to work,” notes Scott Doherty, senior director of operations management for owner-
operator Life Care Services.
A little less legwork
Maberry also admits to a “selfish reason” he likes to develop within a mixed-use property: The master developer has already done a lot of the groundwork.
“It’s getting harder and harder to find a high-quality, three- to five-acre site,” says Maberry. “We can go into a mixed-use setting where another developer is taking a 20-acre site and carving it up, and they find us to be a very compelling use. Regular old land sites are pretty scarce.”
“It’s easier to get zoning approval in the mixed-use projects,” he adds. “The mixed-use developers have already done a lot of the heavy lifting — setbacks and parking and heights and so on.”
The mixed-use developments also offer visibility for the seniors housing communities. With the stereotypical seniors housing site, set back far from the road and out of sight, neighborhood residents might not even be aware of the community.
“We have a high turnover in seniors housing — three to five residents a month. If we’re buried in the woods, that’s not good,” says Maberry. “If we’re in a public setting, it’s easy for advertising and marketing.”
Life Care Services owns and operates Timber Ridge at Talus, a seniors housing community within the 630-acre Talus master-planned community in Issaquah, Wash. Located on 10 acres of that plot, Timber Ridge’s advantageous location at the entrance to the development means that every resident that lives in Talus sees the seniors housing community every day.
“From an awareness standpoint, we get a lot of traffic,” says Doherty. “We’re the first thing people see when they come into the development, so it’s good exposure for us.”
There is another marketing tactic that’s unique to being located within a publicly visible area, such as a mixed-use development.
Formation has begun to offer a form of retail and services within its communities. At Formation’s upcoming development in Cranberry Township, the salon, dining venues and rehabilitation center will all have retail frontage and be open to the public.
“The township wanted an urban, walkable community,” says Maberry. “We’re looking at making other spaces in our building look more like retail. That’s not a profit center for us, but it’s a nice thing to help us fit into that mixed-use center.”
The visual boost causes a tricky problem, however. People in the community don’t even realize the building is a seniors housing facility.
“Twenty years ago seniors housing looked like old nursing homes, and nobody would want them in mixed-use developments. Now it’s a good design and fits very well in that setting,” says Maberry. “Sometimes they don’t even look like senior living buildings, and we have to find ways to tell people who we are. That’s a nice dilemma to have.”
Development on the horizon
The inclusion of seniors housing in mixed-use projects is not new. Maberry saw examples of it when he first entered the industry in the 1990s. However, at the time it was a way for the mixed-use developer to land a tenant rather than an intentional part of the plan. Developers now realize that seniors housing should be an important, integrated part of a project.
“Planners realize that seniors shouldn’t be sent into exile,” says Maberry. “They should be in the heart of the community. It’s how it’s done in many places, in Europe, for example.”
Integrating seniors housing and mixed-use developments is a natural extension of trends in senior living, according to Phil Benjamson, chief operating officer of Blake Management Group, a seniors housing developer with two communities under construction in mixed-use projects. Seniors and their children are looking for active, lively environments, so development sites surrounded by retail, restaurants and entertainment represent a natural evolution of the sector.
“We see a trend toward improving the perception of senior housing — from a place where you go when you get old to a destination that allows you to live a fuller life and focus more on what is important than just making it through the day,” says Benjamson. “The challenge for all senior living developers and operators is finding sites that will allow for our product and service.”
LCB’s Stoller echoes that sentiment.
“We are looking more and more for urban locations that fit a lifestyle of our typical resident that provides these kind of services, including coffee shops, public areas, retail and medical services. Our residents want to see the community and life around them. They want to walk among the town members and not be shut into a building that feels like being put out to pasture.”
Mixed-use developers have even begun to use senior living integration as leverage for approval, notes Matt Booma, executive vice president of CA Senior Living. Booma estimates 40 percent of the company’s new developments are located in master-planned communities, and developers of those projects are seeing the advantages.
“When neighbors have a nice, quiet senior living building in their backyard, the perceived impact of a new movie theater, retail, multifamily and office is reduced,” says Booma. “Mixed-used projects have been shown to increase nearby property values, yet they sometimes face opposition from neighbors who have concerns about congestion. Having a senior component helps mitigate those effects, as many residents either don’t own vehicles, or can choose to walk to their most-frequented destinations.”
The mutual benefits are becoming more and more obvious, according to Formation’s Maberry. Between the increasing number of seniors and the popularity of mixed-use projects, developers should expect to see many new developments of this type in the future.
“This is a trend that will continue to grow,” he says. “The senior population is growing rapidly, and mixed-use developers, retailers and restaurateurs realize seniors can be an important part of their customer base.”
— Jeff Shaw