In 2024, senior living developers, investors and operators are upgrading and repurposing their communities.
For example, about a quarter of IntegraCare’s portfolio has recently undergone “a major makeover or a memory-care conversion,” CEO Larry Rouvelas told Senior Housing News.
And IntegraCare is hardly alone in going big on renovation and repositioning projects, as capital market conditions and other headwinds have made it difficult to pursue ground-up development.
This year, Senior Housing News is showcasing how developers, investors and operators are renovating, repositioning and reimagining senior living for a rapidly approaching generation of older adults. Our annual BUILD conference is returning on November 20 and 21 with a new name, (Re)BUILD, to reflect the current times. The event will bring together operators, developers, capital providers, architects, interior designers and many other professionals for two full days of networking opportunities and insights on the future.
Sessions already planned include fireside chats with Charter Senior Living CEO Keven Bennema and Retirement Unlimited President Doris-Ellie Sullivan, a primer on how to prevent senior living communities from becoming obsolete, mastering the art of the community turnaround, and best practices for CapEx calculations. Buzz is building as we continue to add great new speakers to the agenda. Click here for more details and to purchase tickets.
Senior Housing News reached out to four of this year’s upcoming panelists to talk about what they see ahead in senior living construction and development. What follows are their answers to questions on top development trends, growth strategies and conditions in the coming year, 2025. Their answers reveal that even though conditions are challenging for new construction, forward-thinking providers are hard at work both upgrading communities and creating new, re-envisioned products for the next generation.
Phill Barklow, President, Experience Senior Living
Development trends: Well, there have not been many developments started by anyone in 2024 because of the continued capital market headwinds. That being said, what we are seeing in the projects that we delivered in 2024 is consistent with our thesis that the demands from clients for senior living have evolved quite a bit.
The older model for private pay senior living mostly centered around smaller licensed buildings in suburban markets with limited amenities and small units. The feedback that we have received for the market is a strong desire to be closer to urban amenities, much larger units, and multiple dining venues. We have also seen a strong desire for intergenerational living master communities and better access to high quality public transportation to enhance residents’ independence, while minimizing their carbon footprint.
Strategies for growth: We are growing through new developments in high-barrier-to-entry markets.
In December, we broke ground on a new community in Fort Collins, our 16th development project to date; and we continue to find great opportunities in underserved markets where resident demands are not being met by existing products. We are deep into design on five larger projects that we control and plan to break ground on beginning in the fourth quarter of 2024 and continuing throughout 2025. We also have a significant pipeline of deals in various stages of pre-development that will break ground between 2026 and 2027. From an operations standpoint, we are also seeing unprecedented lease up in our new openings, further supporting our thesis of new developments versus acquisitions.
Construction and development in 2025: I believe the coming year will continue to facilitate opportunities for us to develop into a market desperately seeking products to address the widening gap between demand and supply.
As noted above, we are preparing by continuing to curate a pipeline of projects in high-barrier-to-entry markets ideally situated to take advantage of the rapidly evolving demands of the end user demographic. Similar to what the traditional multifamily sector experienced when millennials aged into the workforce and reshaped apartment development in the mold of “live, work, play” demands, we see a similar phenomenon occurring with senior living with the baby boomers. Specifically, a requirement for proximity to urban environments, often transit-oriented; larger units, and highly amenitized communities.
Michael Levine, Senior Managing Director of Real Estate and Active Adult, Greystar
Development trends: Greystar Active Adult is definitely seeing a large uptick in new developments for active adult.
We are seeing a stronger push in the correct amenities and building a community that the residents see a value in. We are seeing more multifaceted spaces become the trend going forward and areas outdoors for residents to expand their creative footprint. No need to overbuild, but rather constantly survey our residents and local groups to fine tune the process. No one has built the perfect active adult to date, and that is the fun part.
Strategies for growth: Greystar has been growing quite a bit over the past 12 months in both owned assets and third party management. We are looking and working with other companies on new markets, but also expanding our footprint in the 26 states where we have active adult products.
Our strategy from day-one is to build markets and submarkets to grow our talent from within and create a culture for active adult, with a career path. Greystar has put a large focus on the resident experience and lifestyles. This has been our main focus that will help us grow in 2024, as the product has changed, so have the residents’ needs. Greystar has also built out our team to scale with strong leadership so we can handle the next wave of business.
Construction and development in 2025: Greystar feels that the next year will be a strong year, not only for new deals, but to see a lot of active adult product trade in the market. We are seeing a lot of movement towards the conversion of independent communities and a strong movement into this space from an array of investors.
Dan Williams, CEO, Onelife Senior Living
Development trends: In our latest design, we went with more common space. Adaptable multi-purpose common areas where they can be used for various activities. Example: Large common area with pizza oven and demonstration kitchen, but also has the space to use as an activity room. Integrating more smart home features. Alexa, lights, thermostats. We are adding yoga studios. We still have gyms, but want to have an area for yoga and similar activities. [We have] a variety of dining spaces versus just one large dining room such as bistro’s, rooftop martini bars and a breakfast cafe.
Strategies for growth: We are growing through acquisition right now.
We are purchasing distressed assets and taking on some third party management contracts. We have one building under contract to close Nov. 1 and one third party contract in California starting on Aug. 1.
Our strategies on buying distressed assets involve quite a bit of networking. We stay in close contact with brokers, lenders and capital sources. We look for off market deals as well as listings. Recently, several properties that we made offers on have been listed, but we ended up not getting them. We still follow these buildings because they often go off the market. Maybe the owner was asking too much or they fell out of contract with another buyer. They may come back around once the owner realizes he is not going to get what he wants or someone in contract ends up not executing. The building we have under contract now is an example of one we lost but fell out of contract and we stepped in.
Construction and development in 2025: I am anticipating interest rates to come down helping get some capital off the sidelines for new construction. Construction costs are now stabilizing now, and I believe that will continue.
If inflation stabilizes and we do not go into a recession, we could see a boom in development. However a big factor in this happening will depend on the upcoming elections. We are currently working on building design and evaluating markets for new development growth. We do not have any land tied up as yet but hope to do that in 2025 and start a pipeline of new development.
Larry Rouvelas, CEO, IntegraCare
Development trends: Before Covid, a lot of developers started projects in wealthy markets. That’s because in proforma-land, it’s much easier to make a deal pencil out with high rents. But too many projects piled into the same few markets—Montgomery County Maryland, for example— and demand couldn’t expand quickly enough to fill them all. So their lease-up pace suffers. These days, developers are more thoughtful about the pace of building in wealthy markets.
Strategies for growth: Three years ago, we decided to prioritize development in markets that had aging existing supply and less-lofty rents, then find developers and architects that can build an attractive product at a price-point the market can afford. That strategy is yielding well: We opened one property in York, Pennsylvania, last year; and another in Berks County, Pennsylvania, this year. We also have two more that have broken ground for a 2025 opening.
Regarding renovations, in recent years, a quarter of our properties have had either a major makeover or a memory-care conversion. That has spurred a lot of good things for growing census.
Construction and development in 2025: An interesting vacuum exists in the market that will likely continue into 2025. Floating rate interest has caused lots of otherwise good existing properties to be upside-down in debt service. Many big-name investors in senior housing expect those assets to trade at attractive prices. So they are focused on acquisition or mezz debt rather than on new development. I expect a lot of development in 2025 will be capitalized by the smaller-name investors or family offices that take advantage of the vacuum.
