As Supply of Senior Care Real Estate Ramps Up, Developers Try New Tactics to Make Projects Stand Out


A partnership led by Tampa, FL-based senior care facilities operator Validus Senior Living this week announced it will break ground on the first 33 assisted-living and memory care communities it plans to develop across the U.S. Validus, Mark Bouldin and investment bank Piper Jaffray have earmarked $1.1 billion to fund the projects.

But what may have been most notable about the proposed new facilities was the development group’s strategic marketing alliance and its highly targeted resident profile: The Validus venture is targeting the growing number of retired NFL players entering their later years, a population afflicted by a higher-than-average incidence of Alzheimer’s disease and other dementia-related brain conditions.

In a key marketing win, the venture secured the endorsement and publicity clout of the influential NFL Alumni Association, an organization that has been very active in providing support for ailing retired players. According to data released in 2014 by the NFL and the NFL Players Association, nearly 30% of NFL players will eventually develop Alzheimer’s or a related brain condition, twice as high the average of the general population.

The growing supply and wide variety of new formats and property types offered within the umbrella of seniors housing, including independent living, assisted living, and skilled nursing, — and more recently, continuing care retirement communities (CCRC), which typically includes all three levels of care on one campus — has made branding and online presence almost as important as operating efficiency to investors and operators competing torind out profits amid slowing growth of net operating income (NOI).

“Given that 70% of our leads come through online channels, consistently upgrading our technology initiatives to engage and convert more these leads is critical to our business,” says Scott Herzig, COO and senior vice president of Five Star Quality Care, Inc. (NYSE:FVE), a chain of more than 260 independent living, assisted living, Alzheimer’s/memory care, skilled nursing and CCRCs providing high-end acute care and rehabilitation services or seniors.

Newton, MA-based Five Star is currently overhauling its digital presence by developing a new web site and launching new web-based marketing campaigns.

“All of our sites are currently being rebuilt with improved search engine optimization capabilities. Post-launch later this year, we will be rolling out some new aggressive online marketing campaigns,” Herzig said.

In an effort to further differentiate from the competition, Five Star recently partnered with celebrity chef Brad Miller, the executive chef at the Inn of the Seventh Ray in Los Angeles. Miller was a former contestant on Fox’s Hell’s Kitchen among numerous television appearances.

Brookdale Senior Living (NYSE: BKD), another large operator of senior living with 550 communities serving 52,000 residents, is seeking to drive internal growth through its Program Max initiative, redesigning and expanding its communities with the goal of driving higher occupancy.

Program Max includes 17 projects under construction and 17 more in active development totaling almost 500 new units, including seven projects at former Emeritus communities, said Mark Ohlendorf, Brookdale Senior Living president and CFO.

In second quarter 2015, the annual inventory growth rate for seniors housing accelerated to 1.9% from 1.7% during the first three months, with the highest number of units coming on line of any quarter during the past six years, according to the National Investment Center for Seniors Housing & Care (NIC), which tracks data across the largest U.S. metropolitan markets, covering more than 12,300 seniors housing and nursing care properties.

“The pipeline, in terms of volume, is as big as it’s been since I’ve been at NHI. It’s a very active marketplace,” said Justin Hutchens, CEO and president of National Heal Investors (NYSE: NHI). “The competition would include increased interest from private equity. Now that banks are offering higher leverage, non-listed REITs are very active.”

“If you are an operator, you have enormous access to capital today, which has made it pretty competitive, but I also always like to remind everybody that that’s a good indicator of the health of the industry,” Hutchens said.

Validus will roll out a marketing play for its new chain of facilities when it breaks ground on its first facility this week at 1061 Tomyn Blvd. in Ocoee, FL, near Orlando. Several retired NFL Hall of Famers have been invited to the ceremony, including Hall of Fame defensive end Jack Youngblood, a member of the “Fearsome Foursome” defensive line of the Los Angeles Rams teams of the late 1960s and early 1970s; San Diego Chargers tight end Kellen Winslow, and All-Pro Miami Dolphins center Dwight Stephenson.

The strategic alliance with the developers focuses on providing a better lifestyle for retired NFL players who need assisted living and memory care services, according to Joe Pisarcik, President and CEO of the NFL Alumni Association.

“With an aging population and more and more Americans needing memory care services, including some former NFL players, we want to give our members an option that we can stand behind,” Pisarcik said.

By CoStar


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