With the rising popularity of mixed-use projects, some developers are betting that the aging of the U.S. population will create a demand for senior-themed mixed-use centers.
One company making a big bet on the concept is Inland Real Estate Development LLC, which is teaming up with HPD Cambridge, LLC to create a series of senior-themed mixed-use complexes valued at $55 million (Inland will be financing the entire undertaking). The two firms have committed to building four vertical mixed-use buildings in Illinois that will target people in their 70s and 80s.
Called “urbanSenior Living” developments, the properties will feature seniors apartments stacked atop street-level retail and restaurant space that will serve outsiders as well as apartment residents. The idea is to create projects with amenities that will appeal to seniors, but also connect to the surrounding neighborhoods by being located in downtown districts ofsuburbs LaGrange, Elmhurst, Clarendon Hills and Lombard, notes Anthony A. Casaccio, president of Inland Real Estate Development.
This option will be an additional draw for Inland’s developments as the Baby Boomer generation comes of age. Numbering 78.2 million and possessing collective purchasing power of $2.1 trillion annually, according to the MetLife Mature Market Institute, these seniors are expected to maintain an active lifestyle long after their retirement.
“For a lot of senior housing communities, their focus is on providing the amenities and recreation activities,” Casaccio says. “Our projects are designed to allow [seniors] to leave. … They will still get to live with a variety of people their own age, but they won’t feel set aside because they will be in a downtown area and will be able to mingle with people of all different ages.”
When completed, the complexes will contain a total of 144 apartment units and 32,000 square feet of retail and restaurant space. Besides the minor adjustments in design, all four buildings will feature a full-service restaurant that will be accessible from the residential tower and will give preferential treatment to the seniors living at the development. The first of the four complexes, the 30-unit La Grange Pointe, will break ground this spring.on the other three will start this fall.
Inland has not yet signed any leases for the retail portion of the development, but according to Casaccio, the firm is not targeting companies that only cater to seniors. Part of the plan is to have tenants that will appeal to both seniors and younger shoppers.
On idea could be lifestyle retailers like apparel or furniture stores, which are particularly popular with both retirees and younger consumers, according to Lydia Tan, executive vice president with Bridge Housing Corp., a developer of senior housing communities. Bridge is currently working on a bid to create a mixed-use senior housing project in Foster City, Calif. that will include from 400 to 600 independent and assisted living units and up to 90,000 square feet of retail.
“We have an independent living project nearby and we asked the residents what they wanted in terms of retail and they mostly wanted lifestyle uses,” Tan notes. “The most important thing for us is to encourage seniors to be part of the activity on the street and encourage the folks who will be using the retail to linger and stay and become a part of the community.”
Foster City is currently in the process of evaluating Bridge Housing’s bid, as well as bids from AF Evans Company and the Jewish Home of San Francisco.
Most mixed-use projects aimed at seniors will provide some services for their residents, including transportation to and from entertainment events, doctor’s appointments and help with errands. But Inland and HPD are not going into care giving. The venture will stay away from doing assisted living facilities because of the extensive licensing required for such projects. Instead, the company will consider additional opportunities to work on independent living quarters, where the minimal increases in construction cost for things like wider entrances and more opulent common areas are easily offset by the market demand from aging Baby Boomers.
“I believe that with the trend of people living longer and seniors representing a much higher percentage of the buying population, we will continue to do such developments,” Casaccio says.
Other developers are taking a similar route. For example, some developers of urban residential towers are finding success marketing to seniors.
In other venture, Kane Realty Corp., out of North Carolina, is working on a $1 billion expansion of its North Hills mixed-use center in Raleigh, N.C., that will include a 300-unit continuing care community for people over the age of 60. To get approved for the project, the company had to work with the state’s Department of Insurance, but according to CEO John Kane, it was important to them to make North Hills into a living district that would closely resemble an organically grown community.
“We wanted to create all types of living quarters because we are trying to appeal to people from all walks of life,” he says. “But it will have all of the skilled nursing and assisted living dimension–it will provide everything you need, no matter what your physical condition.”
The development, called the Cardinal at North Hills, will also feature a clubhouse with three dining venues, a fitness center, a media room and other recreation facilities. Scheduled to break ground in late 2007, it is currently in the pre-demolition phase. Kane Realty is partnering with Kisco Senior Living and Duke Healthcare Systems on the project.
In addition, there are several projects around the country that are creating enclaves for seniors within larger mixed-use developments, including one currently being built in Seattle by locally-based Era Living that will include 143 senior housing units as part of a broader development by Lorig Associates involving a 14-screen movie theater, more than 250 market rate apartments, 109 condominiums, 62,000 square feet of ground floor retail and a water park. The senior community and Lorig’s property will be connected to each other by a series of walking paths. Thornton Place, a retirement living community for people 62 and older, will be the first Era Living development to be a part of a ground-up mixed-use complex.
“We love the idea of having the mixed-use environment because our residents are very active, so clearly having a life outside of the community is very important,” says Gena L. Owens, vice president of marketing and sales with the company. “We would definitely seek this out again."
Era Living’s project is expected to break ground in April of this year and is scheduled for completion in early 2009.
Such developments are still rare compared to the traditional senior living communities, which are often self-contained and positioned somewhere on the edge of town, according to David Sanders, president of HPD Cambridge.
“We used to do that many years ago, but then we began to wonder why we were taking people of that age away from the grocery store and the hair salon and all the conveniences [they were used to],” Sanders says. “These projects have to be pedestrian friendly, that’s ideally suited for seniors because there are so many things you can do without relying on somebody else.”