NIC MAP data shows Minneapolis, Portland and Seattle are the three markets with the highest penetration rates in the country. Culture is a big reason why – just ask the operators in those markets now.
An analysis of the top 99 primary and secondary markets across the country revealed that Minneapolis carries anoccupied penetration rate of 10.1%, meaning that approximately that share of age- and income-qualified older adults 75 and up were using senior living services.
Minneapolis market has a higher penetration rate than other markets in part because of the prevalence of nonprofit operators in the area, which has led the market to “embrace senior living,” according to Jon Fletcher, president and CEO of Roseville, Minnesota-based Presbyterian Homes & Services.
“Minnesota, and Minneapolis in particular, have a long history of embracing senior living, especially nonprofit senior living. Four of the nation’s 25 largest nonprofit senior living owners, including Presbyterian Homes & Services, are based in Minnesota,” Fletcher told Senior Housing News.
The nonprofit’s waitlist current exceeds 10,000 people across all of its markets in five states, but there is still room for improvement in Minneapolis to make services more affordable to widen them to even more people.
In Portland, with a 7.5% penetration rate, nonprofit RoseVilla tells a similar story regarding the prevalence of senior living affecting the perspective of the industry. The strategy to capitalize on that prevalence shifts from explaining the model to making RoseVilla’s vision for the future of senior living, according to CEO Glen Lewis.
Learning from operators in markets with high penetration rates
The number of adults age 65 and older makes up 11.4% and 14.2% of the populations in Minneapolis and Portland, respectively, according to data from the Minnesota Compass project and Neilsburg Research. That leads to residents having a more proactive-planning culture, according to Lewis.
“People genuinely value sustainability, inclusion and transparency, which happen to be the same values RoseVilla is built on,” Lewis told SHN. “Like everything in senior living, it comes down to trust and an understanding of the product.”
Multiple other life plan community operators exist in Portland, which creates a level of familiarity that smaller or less-saturated regional markets haven’t had time to build,” Lewis said.
Operators such as Seattle-based Era Living tap into the culture of the surrounding market to coordinate and reach out to prospects. Karla Clark, Era’s regional director of sales and marketing, said the surrounding Seattle community, which carries a 6.8% penetration rate, is full of highly educated, planning-focused individuals that understand the negative impacts of isolation as they age, leading to a populace more willing to plan ahead and accept senior living.
Era Living spreads awareness of its name and brand through a number of partnerships, including with Seattle Education Auxiliary, University of Washington and Northeast Seattle Together. The company also works with the Phinney Neighborhood Association, which helps lower the stigma of aging, according to Clark. Era Living focuses its efforts upstream of the pipeline utilizing these partnerships.
“We partnered with [Northeast Seattle Together] because we believe in having a support system that’s healthy aging for anybody wherever they are, but down the road … It would make sense that if they are familiar with Era Living or one of our communities, then they would think of us when the right time was to move,” Clark said.
Jason Childers, chief operating officer of Seattle-based Merrill Gardens, added the market’s long history of senior living development and operation helps streamline the marketing process, allowing operators there to focus on what makes them stand out rather than focusing on educating prospects about what senior living is. The operator also has two communities, Merrill Gardens at Ballard and Merrill Gardens at The University, that its leaders intentionally developed in “excellent urban locations” that are walkable and surrounded by locations prospects and families will visit.
Despite the high barriers to entry for these communities, including expensive land and waiting to purchase adjacent parcels as they became available, the Ballard community has a 100% occupancy and the university community sits at 96%.
A unique aspect for Minneapolis, according to Fletcher, is a “depth of care and quality” that has been built up over the decades from senior living operators such as Presbyterian Homes & Services. That is something that cannot be replicated overnight in a new market, he said.
Improving across the board
Operators have long tried to crack the code on increasing penetration rates, which isn’t driven by need alone. However, the operators in higher penetration rate markets believe some of the strategies they employ might have an impact in markets on the low end of the spectrum, such as Miami and Las Vegas, which sat around a 2.4% and 1.9% respectively.
There’s still room for improvement, even among the top three markets, though some factors are outside of operators’ control. In Minneapolis, affordiability still has a long way to go.
“We need more sustainable housing models and service models that can be delivered at a lower cost. Achieving that requires providers, policymakers and capital partners to work together in new and innovative ways,” Fletcher said. “This may include expanded services allowing individuals to remain in their homes longer, providing a more affordable alternative while supporting aging in place.”
Operators can also be more aware and intentional where they are building communities, according to Clark. Having locations within and around neighborhoods in particular passively helps create awareness of the community.
“Our communities were built in neighborhood pockets, and it’s a place that people drive by for decades, or maybe it’s a place that their parents go and they’re planning on going,” Clark said. “Sometimes I see these new properties being built, and it’s not by anything.”
Operators in these markets note outside of general education efforts, forming partnerships and having open involvement with the community helps foster awareness about what exactly senior living can be and what it has to offer. Era Living, for example, welcomes in the surrounding Seattle community to quarterly art shows to highlight and feature local artists throughout its communities.
Fletcher added operators need to continue investing in “friction reduction” throughout the sales process by simplifying pricing and reducing industry jargon to make it easier for prospects and their families to understand what is presented to them.
“Prospects and families respond well when you make a complex and emotional decision feel more understandable and approachable,” he said.