Assisted Living Developers
for Memory Care Facilities
When our CEO attended the first Assisted Living Conference in Chicago sponsored by the Assisted Living Federation of America (www.alfa.org), there were just over 200 attendees. Within a few years the Orlando conference had over two thousand. There were not many Assisted Living Facilities nationally before 1993 but within the next four to five years, there were more stand alone AL/MC facilities (not part of an IL or IL campus) than before or the dozen or so years since.
By the late 90’s, many major markets became saturated after too much development. The new millennium construction of Assisted Living or Memory Care facilities has been mostly limited to being part of campuses including Independent Living and more so in the conversation of IL beds to AL units…not new construction. The time is here to ride for second boom in new development and operations for smart assisted living developers, operators and lenders in the industry.
There are radical differences in Independent Living and Assisted Living market stability nationwide, from those that suffer occupancy rates of 80% or less in regions in CA or FL while other regions within those states are solid, to a Northeast market where we have conducted eight different feasibility studies, identified the need for Memory Care in five of those studies and ALF beds in three of the five. Nonetheless, in only one location out of eight was there an unmet need for Independent Living. Assisted Living has occupancy rates on average nationwide that are better than Independent Living since ALF is a need driven decision while IL is much more of a lifestyle choice. Occupancy rates ranged at 85% for IL but in this extended Northeast market, but the average occupancy rate for ALF was 97% with Memory Care closer to a 99% occupancy rate.
Assisted Living Developers research suggests that market opportunities exist in pockets nationwide. There is a ripple effect in many markets tied to the real estate crisis and the economy. Typically, if the market has experienced a high number of foreclosures and more so a drop of 30% or more in home values, there is going to be a ripple effect in the occupancy rates for Independent Living Communities and Assisted Living to a lesser degree. Nonetheless, many Memory Care facilities in these struggling regions have 90-95% or more occupancy rates.
The boom of the 90’s cannot be duplicated just like the boom of Skilled Nursing Facility development in the 60’s into the 70’s cannot. Nonetheless, the pending boom is clear as there is added infusion of capital for Memory Care and Assisted Living and to a lesser degree Independent Living in certain markets accelerating over the last two years see many operators aggressively looking to expand as they did during the first wave of construction. Moreover, like the 90’s when our company worked with many residential and commercial builders and developers that had never heard of Assisted Living until they read a newspaper article or advertisement, there will be a new wave of builders and developers that are smartly put together an industry specific team after an detailed senior living feasibility study in one market or multiple markets to assure one or two opportunities.
Who will emerge as the new millennium operator that develops many dozens of Memory Care Communities like Manor Care did with their Arden Courts model in building a hundred facilities during the first boom in the industry. Will there be growth in Assisted Living without Memory Care or even with Memory Care units? Yes, there will be, and still plenty more Independent Living conversations to ALF beds. Still, if you polled operators, clinical managers and senior living consultants that do not operate converted IL to ALF units, or the majority of all standalone ALF built 12-18 years back facility during the extended boom years as well as operators with a Memory Care focus, and asked “For patient care and safety, if you could operate an ideal Memory Care facility, would the design be in a stand-alone Memory Care facility on one floor with 3-4 living pods and at least two separate large secure exterior areas or another design.” Surely, the overwhelming majority would select the first option.
The millions of aging boomers are just as important. Over 75% of the average Americans would know that boomers will be changing the dichotomy of the healthcare landscape in the near future. Of course, Assisted Living and Memory Care are part of that great need. Boomer expectations are different than the very same parents they may have placed in an ALF or MC, the first generation to do so on a wide scale basis.
Is your company ready to capitalize on the next wave of AL and MC development? If you would like to discuss the potential opportunity with the Assisted Living Developers, contact our CEO, Tim Cassidy at firstname.lastname@example.org