Low-rise suburban retirement communities are pretty much the norm, but a new wave of high-rises for seniors who prefer an urban lifestyle is taking shape in central cities.
Take, for example, a project by Pacific Retirement Services Inc. based in Medford, Ore. The non-profit company announced in January plans to build a new $200 million, 30-story continuing care community, Mirabella, in Portland's South Waterfront area, a downtown neighborhood in the midst of redevelopment. Pacific agreed to purchase a one-block parcel from Oregon Health & Science University, which has a nearby campus.
“Urban settings are a great environment for seniors,” says Tom Becker, president and CEO at Pacific Retirement Services. The company manages 46 retirement communities in Oregon, Washington, and Texas.
Pacific also is adding a new 16-story tower at its Fort Worth community, Trinity Terrace. Another new project, also named Mirabella, the company’s upscale brand, is currently under way in Seattle's South Lake Union neighborhood, near downtown. The 12-story building with 800,000 sq. ft. is sold out and expected to open in 2008.
"A lot of seniors like the idea of being in an area where they're close to restaurants and services," says Becker. "They don't need a yard anymore and they're tired of dealing with the car." A high-rise with lots of amenities on site also appeals to residents who may have trouble getting out.
The Portland property will be located near a streetcar stop as well as a wellness center. The South Waterfront area will feature restaurants and shops, along with new apartment buildings and condominiums. After redevelopment, the neighborhood's value will total $1.9 billion, developers estimate.
The building will include 224 independent living apartments, 16 assisted living units, 20 skilled care rooms, and 21 memory support units. Penthouse suites feature up to 2,000 sq. ft. of space. Like other continuing care projects, the building charges a partially refundable entry fee, along with monthly rent.
Prices haven't been set yet for the Portland building, says Becker. But he expects entry fees to match those at the Seattle project, where entry fees range from about $400,000 to $1 million.
Other developers are building retirement high-rises, mostly for well-off seniors. Ziegler Capital Markets Group counts about 50 continuing care high-rise buildings, with a handful of other new projects on the drawing boards. "High-rises will grow in popularity," predicts Dan Hermann, managing director and group head at Ziegler's Chicago office. "It's really a phenomenon in major metro areas, and more high-rises are coming."
In downtown Chicago, a 53-story continuing care project, the Clare at Water Tower, is under construction. Located at Rush and Pearson streets, just off Michigan Avenue, the Clare will feature 251 apartments, along with assisted and nursing care suites. The building is a project of the Homewood, Ill.-based Franciscan Sisters of Chicago Service Corp. Entry fees at the Clare start at $540,000.
Brookdale Senior Living Inc., the largest senior-living chain in the country, has about 20 high-rises in its portfolio, according to company Co-CEO Mark Schulte. In 2000, Chicago-based Brookdale developed the 18-story Hallmark of Battery Park in Manhattan. The company also operates a 37-story apartment tower in Chicago's Lincoln Park neighborhood. Monthly rents are about $4,200.
Rents at high-rises are about 10% higher than comparable suburban properties, Schulte says. Higher real estate taxes and operating costs account for the difference, he adds.
High-rises can be difficult projects to pull off though, developers note. A good site can be hard to locate. It also takes more time to plan and build a high-rise because of time-consuming zoning approvals and construction challenges.
"Depending on the market, high-rises can cost an additional 25% to 30% to construct," says Schulte. At the same time, Pacific's Becker says construction costs are rising, and he doesn't foresee a slowdown in price increases. "You really need [a lot of] units to make the numbers work for a high-rise."