Tag Archives: senior housing

Robert Howe joins GPE Commercial Advisors

Robert Howe, GPE

Robert Howe, GPE

GPE Commercial Advisors announced the addition of Robert Howe, senior vice president, as the newest member of its brokerage team on Monday.

The senior housing (ILF, ALF, MCF, SNF) market is Howe’s brokerage specialty. He has been actively involved in senior housing since 2002, but has owned, managed, developed and brokered commercial real estate since 1974. Howe has an engineering degree, MBA, CCIM designation and other training.

“I moved to GPE,” he says, “because GPE’s healthcare group represents one of the most important resources for the senior housing market in this region.”


Rendering of Generations at Agritopia (a sister property). Renderings of the Ahwatukee location are not yet completed.

128-Unit Senior Housing Community Comes to Ahwatukee

Investment Property Associates, LLC (IPA) and Retirement Community Specialists (RCS) have partnered for a second time to develop a senior living community in Ahwatukee near the southwest corner of Chandler Boulevard and 50th Street.  The 8-acre site of the planned senior community is part of a 35-acre mixed-use parcel acquired by IPA in 2012.

The senior housing community, called “Generations at Ahwatukee,” is designed to be 160,000 square feet and to provide 128 total units.  The community will be licensed by the State of Arizona as an assisted living and directed care community and will offer independent living, assisted living and memory care.  The community will be operated by Retirement Community Specialists (RCS), a senior living management company based in Ahwatukee since 1998 and in the Phoenix area for over 25 years.

Rendering of Generations at Agritopia (a sister property). Renderings of the Ahwatukee location are not yet completed.

Rendering of Generations at Agritopia (a sister property). Renderings of the Ahwatukee location are not yet completed.

“We are thrilled to bring senior living to Ahwatukee where RCS has been a member of the business community for over 15 years,” said RCS President Eric Johnston.  “As a resident of Ahwatukee for more than 20 years, it is rewarding to be able to provide residents and their family members with quality senior living options, right in the neighborhood.”

The unit mix includes studio, one-bedroom and two-bedroom apartment styles as expansive as 1,150 square feet, and many unit styles will feature private balconies or patios. The community will offer an array of amenities that promote freedom from everyday burdens for residents to enjoy their interests and quality time with friends and family.  Current plans include a theater, fitness center, library, salon/barber shop, pool, community gardens, activity centers and restaurant-style dining rooms.

Generations at Ahwatukee will be situated to the north of the 402-unit, Liv Ahwatukee, one of IPA’s premier multifamily residential communities scheduled to open this summer.  Senior living fits well within IPA’s multigenerational vision of neighborhood.

“Generations at Ahwatukee will be a sister property to Generations at Agritopia, which is a senior living community that IPA and RCS own and operate in the literal center of the thriving community of Agritopia in Gilbert,” says Scott Brooks, a partner at IPA. “We strongly believe in the thoughtful design of multi-generational communities where people of all ages can interact with and enjoy each other. With Generations at Ahwatukee positioned next door to Liv Ahwatukee, our Generations residents can still very much be in the center of life’s action while also enjoying the high-level amenities and services they desire and expect from a premier senior living community.”

The Generations at Ahwatukee site is fully entitled and IPA expects to break ground in the fall. IPA has developed senior care communities in other markets; this will be the company’s second senior living development in Phoenix. MC Clark-Wayland Builders of Scottsdale, Ariz. will serve as the General Contractor.  Architectural services are provided by Todd & Associates of Phoenix and Thoma-Holec of Mesa, Ariz. will provide the interior design.


Lease Rates Drop, Vacancy Steady in Medical Office Buildings

GPE Commercial Advisors released its 3Q healthcare report for the Phoenix Metro.

At the end of the 3Q 2013, the government had shut down and the debate over the debt ceiling was at an impasse over the funding of the Affordable Care Act (ACA). Not only are healthcare providers trying to understand the impact ACA will have on their practice, the government is at a standstill trying to understand its implementation and long-term effects and trying to implement it efficiently, starting with using exchanges to shop for health insurance. As a result, the effect the ACA will have on healthcare investment real estate continues to remain unknown. As the statistics in the Phoenix market prove to show little change since last quarter, nationally, the medical office/investment sales have been strong.

The average lease rate dropped slightly in the 3Q to $21.79, full service from $21.92 in the 2Q, according to CoStar.  The vacancy continues to hover at +/-30%.  The above data is comprised from 325 medical office buildings consisting of 10,000 SF or more, for a total of 12,995,709 SF.

Medical Office Sales Activity

In the 3Q 2013, there were 29 medical office sales transactions comprising of bulk portfolio sales, multi-tenant and owner/users. While the bank-owned properties are drying up, there still continues to be deals in the market. The total sales volume was $95,533,190, with the average price per square foot of $204.80 and an average cap rate of 8.33%.

Montecito Medical Investment Company sold six properties to CNL Healthcare Properties for $59.5M, which is $327 a SF. Three of the six properties were John C. Lincoln Medical Plaza I, John C. Lincoln Medical Plaza II and the North Mountain Medical Plaza with a combined total of 73,666 SF and are well-leased to multiple tenants, including John C. Lincoln/Scottsdale Health. The John J. Lincoln Health Network, which occupies about 45% of the buildings, has recently formed a strategic alliance with the Scottsdale Health System.

On October 1, Tenet Healthcare completed its acquisition of Vanguard Health System, Inc. (“Vanguard”). Vanguard operates as Abrazo Health Care in Phoenix. The transaction brings Tenet back to the Phoenix market after selling its former hospital assets to Iasis Healthcare in 1999.

Senior Housing Supplement

The senior housing real estate market includes assisted living, independent living, skilled nursing and dementia/memory care facilities. In the Third Quarter 2013, there were two transactions for a total of $4.285M: Reflection Bay at 2932-2942 N. 14th Street in Phoenix sold for $3.325M, just below an 11% cap rate at $109 per SF with a tenant in place; Fiesta Village Supervisory Care at 5602 N. 7th Street sold for $960,000, which is +/-$52.00 a SF.

The former Kindred Care facility at 11250 N. 92nd Street in Scottsdale is being converted to a 42 unit memory care facility. This new project, Amber Creek Memory Care, is expected to be completed at the end of 2014.


GO 29

Community Development Partners Celebrate Grand Opening of First Senior Housing Project

The Community Development Partners (CDB) celebrated the opening of its Phoenix senior housing project on Tuesday.

The Marquee Apartments utilize a refurbished 1958 building consisting of 34 units.

CDP said that they were “passionate about maintaining the architectural integrity of this classic mid-century modern building,” and worked hard to maintain “period-appropriate finishes consistent with the original design intent.”

All of the 34 units are income and age restricted to residents 62 years of age and older earning no more than 60 percent of the AMI.

The Marquee Apartments is the first of several development projects in the works in the region with additional projects planned in both Phoenix and Mesa. 

The Marquee is an excellent example of the type of building projects that we are focused on bringing to the Phoenix market, each individually and contextually designed to maximize the benefit to residents and the local community,” said Eric Paine, CEO of CDP.

Senior Housing - AZRE Magazine November/December 2009

Multi-family Market Sector And Senior Housing

Multi-family market sector and housing for the aging boomer generation

One might think that the suffering single-family housing market would be a good thing for multi-family. Foreclosures create demand for rentals — shouldn’t the multi-family market be booming? Well, it isn’t — at least not at the moment.

Senior Housing - AZRE Magazine November/December 2009In Phoenix and Tucson, multi-family followed single-family trends over the past 10 years. Nationwide, the National Association of Homebuilders reported in August 2009 that while some sectors of the housing industry are showing signs of rebounding, the apartment sector isn’t one of them. Data from NAHB for the second quarter of 2009 show a continued downward movement across all rental sectors.

“The continued contraction in multi-family starts is exacerbated by the ‘shadow market’ of empty foreclosed single-family homes and condos that are being rented at below-market rates by investor-owners,” says NAHB chief economist David Crowe in a press release.

“Lenders see the high apartment vacancy rates and vacant condo inventory, and step away from backing any new production.”

Industry experts in Arizona agree. “One of the big challenges in the multi-family market is that it continues to compete with the single-family market,” says Tyler Anderson, vice chairman of CB Richard Ellis’ Institutional Group. “So many of the homes investors buy are becoming rentals. It’s a great time to be a renter with the deals you can cut, but it’s a tough time for owners.”

For 2009 in the Phoenix area, about 5,100 units are projected to be built. Anderson adds that if it’s not under construction today, “Then it’s not going to happen this year.”

These numbers are a far cry from the mid 1980s, when up to 35,000 units a year were built. Yet the problem now doesn’t stem from an oversupply of multi-family, Anderson explains, but from a glut in supply of single-family homes. Currently, few multi-family properties are seeing any rental growth, other than senior housing. Yet senior housing has felt the pinch too, with one distressed senior housing property in Phoenix and another in bankruptcy in Tucson, says David Rothschild, a CBRE executive vice president and leader of the national senior housing services group.

“Phoenix and Tucson are not unlike other places in the U.S. that have been impacted by the real estate market” Rothschild says. “No. 1, it’s difficult to get financing. No. 2, the lease up of facilities is difficult.”

Many seniors who are interested in multi-family senior housing can’t access the equity in their homes because of the economy, Rothschild says. “It’s difficult for them to sell their homes; 401Ks are moving down — many people are delaying because of the market. And not only does it directly affect the 75 to 80 year olds, but also their children. People are putting off that decision, and Mom and Dad are moving in with the kids.”

Bright Spots

The news isn’t bad for everyone. Opportunities exist to purchase properties for 30% to 50% of peak pricing, Anderson says. “There’s not a lack of money out there to buy these properties. There’s plenty of capital out there — 25 to 30 offers on a sale is not unusual.”
And those deals will probably be around for some time.

“You’re going to see more properties available at these corrected prices. I think the challenge is in the next 12 months for the rental market,” he says. “Operations will continue to struggle. But struggling operations make it a great opportunity to buy today, because the market will not remain this soft forever. When job growth returns, rent rates will return quickly.”

Senior Housing – Waiting for the Boom(ers)

Rothschild predicts that within the next 2 years, things will start to come back for senior housing, because “demographic forces are pushing it.”

In the short term there are problems, Rothschild says, but there is a huge bubble of demand in the next 20 years as baby boomers retire.

Baby boomers are loosely defined as those who were born between 1946 and 1964. U.S. Census data indicates that in 2000, 12.8% of the U.S. population was 65 years of age or older — about 1 in 8 Americans. By the time all of the surviving boomers reach 65, there will be 80 million Americans who are 65 years of age or older. By 2030, the U.S. looks a lot grayer — 1 in 5 Americans will be aged 65 years and older.

“There aren’t enough facilities for this generation,” Rothschild says. “When the bubble breaks, it will be very good for current operations; occupancies will be very strong — it will raise rents dramatically.”

Projects like Classic Residence at Silverstone, a Scottsdale project due to be completed in early 2010, will be in high demand. Silverstone is a joint project of Classic Residence by Hyatt in Chicago and Plaza Companies, located in Peoria. The developers have combined a targeted mix of healthcare levels and individual living spaces to fit the lifestyle of just about any retiree.

Silverstone’s developers used their first project, Classic Residence at Grayhawk in Scottsdale built in 1999, as a pattern for their continuing success. “We’re excited about how it’s being received,” says Sharon Harper, Plaza Companies’ CEO. “We were very innovative 12 years ago when we built Grayhawk, and we are very attentive to how residents’ needs evolve. That’s really been the secret of our success.” Grayhawk currently has a waiting list, and interest is spilling over to Silverstone as well, Harper says.

Currently, Arizona has a robust aging population with more than 180 nursing homes, 1,700 assisted living facilities and more than 500 independent-living communities. By the end of 2009, an additional 2,300 units and 8 senior housing projects will be completed.

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AZRE Magazine November/December 2009