You just got a great price on some new land in a prime location. Or you have connected with a group of financial investors who have money to spend.
With the silver tsunami on its way (over 50 million people will be 65 years of age or over by 2020) you figure building new senior housing is a good bet.
But now comes the really important part. The market feasibility of a new senior housing development, and even more critical, finding the right operator and management partner. Here are some questions to consider as you research your options:
Q: Does the management company specialize in working with older adults? If so, how long have they been in business? What is their reputation in the marketplace?
A: This should always be the first question you ask. Reputation and brand are a huge influence not only in senior housing development, but everything! The more history and experience you have, the more knowledge you gain. The more knowledge you gain, the more tools you have to benefit from…and these tools provide the framework from which a good, solid reputation is formed.
In the senior housing industry, we’re dealing with a population who probably hasn’t moved in years. They are resistant to change and need to feel confident that leaving their home for a senior living community is the right next step. How confident would you feel moving somewhere with a bad reputation or a place that has no experience working with older adults?
The seniors aren’t the only factor, however. Adult children also play a large role when it comes to their parents moving out of their homes and into senior housing. They too need to be assured that this is the right move, and feel comfortable leaving their loved ones in the care of someone else.
Q: Is your potential partner aligned with a major health system?
A: In the senior housing industry, you’re not just dealing with physical space for older adults to live, more importantly you’re creating an environment for them to feel safe and receive the extra care needed to continue to live happy and healthy.
It’s crucial that your potential partner be aligned with a major health system. When you have that connection you receive quality home care, dependable and experienced hospice care, and referrals for physical therapy, occupational therapy, surgery, etc. can be made easily and efficiently. Being affiliated with a major health system means you have that many more resources to tap into.
Q: What about economies of scale? What kind of bang do you get for your investment buck?
A: When looking at economies of scale, it’s all about the operator. You can’t just look at a market study, see there’s a need for senior housing and start building. It’s much more than that. You have to determine size, and with that comes staffing. You could have a beautiful 225 unit building and even 225 seniors ready to move in. But, if you don’t have employees to staff the building you’re digging yourself into a hole. I find that 90-120 unit buildings are where you’ll receive the biggest “bang for your investment buck.” It’s large enough to incorporate all of the various amenities older adults are looking for in senior housing, but small enough to appropriately staff, generate high occupancy, and create a cozy at-home feel.
Q: How deep is the support infrastructure?
A: At Ebenezer, our team of experts is multi-layered. And you need those layers to be successful. From understanding health care reform and the latest regulations, to the advancements in/use of technology, to human resources, nursing, sales and marketing, dementia programing and education, dining, customer service, budgets and proformas, state guidelines and land development solutions – the list goes on and on.
Q: Who knows the right players to work with in senior housing development?
A: This circles back to question one. I said it before, and I’ll say it again - reputation and brand mean EVRYTHING. The more established your potential partner is within the senior housing industry, the more knowledge they have about the right “players” to work with. From contractors and architects to market research and technology companies – they must have the experience to know who gets the job down right at the best price.
With costs of building new senior housing in the millions, investors want a return on their money as quickly as possible. The healthcare system is evolving rapidly, as are the regulations. It is critical to choose the right management partner to ensure your success. To find out more about my team at Ebenezer, or for a FREE land assessment, please contact me.