The seniors housing environment is expanding into selective niches toward perfecting the continuum of care. The focus on Alzheimer's development is key.

Competition in seniors housing for 1998 has many developers and owner/operators re-evaluating their construction plans to focus on the continuum of care arena. In the assisted living sector, Alzheimer's units are the No. 1 addition that owners and developers are targeting. Whether it's retrofitting or new development, this aspect of the seniors housing spectrum is a major part of being competitive and gaining market share this year.

The current state of the market calls for an increase in dementia-related units being built to be competitive in today's seniors arena. Alzheimer's units are a special type of construction that the top seniors housing providers are developing to accommodate this niche in the industry. "Some of our national clients put out a model as a new product which usually has an Alzheimer's wing. The benefits of attaching to a building in a new development would be a shared services area, like a central kitchen for the staffing, because there are no more common areas," says Don Eklund, seniors project manager for San Diego-based Koll Construction. "The facilities that we're building as a prototype include an Alzheimer's area of about 20 to 25 units. A resident can age in place within the assisted living or the skilled nursing portion of the campus."

Even in an assisted living facility that includes Alzheimer's units, the variations in construction styles have an impact on what is built in the community. "We must plan for a wandering path, the area has to be user friendly and have no thermostat controls. Most of these Alzheimer's areas have a kitchen area for them to use as part of their therapy. That area usually has a stove, so the appliance will have a locking device so it can't get accidentally turned on," says Eklund. "It's a simple design, but yet designed like a home. As for things like hot water in these areas, the temperature is not at a level for the residents to scald themselves."Each developer will have various design plans for Alzheimer's wings and will still keep the focus on the dignity of the resident. "Some developers have private bathrooms with showers and some do not have showers. However, I have also seen another product type where it is just exclusively an Alzheimer's provider and they have four wings going off with each wing averaging around 20 units, all with private baths," says Eklund. "The product I am seeing is comparable in cost to assisted living, and in some cases may be more reasonable. It totally depends on the prototype by the developer. Some of the assisted living product is more apartment like. True assisted living is more like a studio that has the services and a full support staff to operate the facility. There are usually more simple, more homelike structures in the Alzheimer's wings, but they have essential things such as wandering systems."

One of the major considerations focused upon in developing Alzheimer's units within an assisted living environment is the mixing of the two types of residents. It must be looked at prior to retrofitting or new development takes place. "There's a lot of pressure in the assisted living industry to separate out those who have dementia-related problems from the overall population. They need specialized care, and it's care that is more oriented toward behavior management than healthcare," says John Sawyer, president of Legatt McCall Retirement Communities, a Boston-based seniors housing provider. "The behavioral management problem is a real issue. One of the things that should be looked for is a specialized provider for Alzheimer's residents. When they're doing alright, the residents can be upset easily, and then you get to the point when they aren't really good company for other people. This is when they need to be in a separate environment and development design planning becomes very important."

"The design and management of Alzheimer's is very specialized and a considerable increase in the assisted living market share. My concern, as a developer in the industry, is that the operator must have the ability to specialize in the niche with a true understanding of the differences for Alzheimer's from assisted living," says Sawyer. "We're building campuses where we have independent, assisted and Alzheimer's for the continuum of care. In some cases, we'll construct a building for a mix of assisted and Alzheimer's, but this usually works best in smaller markets. You haven't segregated the market by incomes nearly as dramatically in small towns as you do in larger markets. As Alzheimer's only buildings are developed, I think those that are mixed into other buildings are at a competitive disadvantage. This has an impact on the share and what units you market first after construction is complete."

New development has the overall advantage in Alzheimer's unit construction over retrofitting, and many developers focus on ground-up projects. "We only do new developments and not renovations. I think if you're taking a nursing home and converting it to assisted living you can do it inexpensively, but you don't get the same product," says Sawyer. "When we build a campus, we look at around 100 to 120 independent units, 80 to 100 units at the high-end of assisted living and 40 to 60 Alzheimer's units."

"There's a real recognition that the dementia-related problems need a separate focus and I think the opportunity to develop Alzheimer's specialized facilities is an emerging piece of the market," says Sawyer. "The maturing of the seniors industry isn't a one-size fits all anymore, you're really seeing niches and those niches have to do with income, types of care required, medical affiliations and what people are doing is differentiating themselves from the rest of the marketplace. In the past, Alzheimer's has been rather informally accepted in assisted living and when the residents get really problematic they must be moved to a more controlled area, and that is where the need for more of these facilities is needed. The market is now large enough to actually separate it out as a niche within the industry."

Many of the top developers have had to increase their market share of Alzheimer's units to stay competitive in the seniors living environment. "In terms of our new prototypes, we have incorporated the addition of 25 Alzheimer's units and segregate the special wing from the rest of the facility. We do this because of their special needs," says Mike Giacopelli, senior vice president at Bethesda, Md.-based Marriott Senior Living Services. "We have no plans to retrofit our existing facilities, we are doing it on an opportunistic basis where we have expansion opportunities to get more Alzheimer's market share. I think it is building programming in all of our new communities that we are adding Alzheimer's wings."

The volume of product that will be done this year targets the increase in the need for more Alzheimer's units. "Basically, we feel that the development of Alzheimer's units works best in a freestanding model. When we build, our focus is not to add an Alzheimer's component, but they are designed such that we can add a wing if the market dictates," says Michelle Bickford, seniors vice president at Seattle-based Emeritus Corp. "We focus on bringing in a freestanding Alzheimer's facility either on the same campus or very near one of our assisted living communities. Going forward, we're looking at developing Alzheimer's through a third party. We can better capitalize on the Alzheimer's market this way and keep focused today."