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TYPES OF SENIOR HOUSING
Understanding the segments of the senior housing market can help investors decide which type of property suits their objectives. With the exception of free-standing nursing homes, Christopher Place anticipates acquiring senior properties which may include, but not be limited to, the following types:
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Independent living facilities are primarily apartment buildings which contain a significant amount of common space to accommodate dining, recreation, activities, and other support services for senior citizens. These properties range in size from 50–500 units with an average size of approximately 225 units. Units include studios and one- and two-bedroom apartments ranging in size from 450 square feet to over 1,500 square feet. Residents usually pay a base rent for their housing, which includes a meal program. Other services are provided at an additional charge. The resident fees generally range from $1,500 to $4,000 per month depending upon location and services provided. Payment sources for independent living are generally private pay.
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Assisted living facilities provide a special combination of housing, supportive services, personalized assistance, and health care to their residents in a manner which is designed to respond to individual needs. These facilities offer a lower-cost alternative to skilled nursing facilities (nursing homes) for those who do not require intensive nursing care. Industry standards suggest that a person is suitable for an assisted living facility when he or she needs assistance with three or fewer activities of daily living (ADLs). ADLs are activities such as eating, dressing, walking, bathing, and bathroom use. Assisted Living facilities also provide assistance with instrumental activities of daily living (IADLs), such as shopping, telephone use, and money management. The level of care |
| provided by assisted living facilities has increased in recent years. With an increase in demand for the lower-cost services they provide, assisted living facilities have begun to provide care for an increasing number of physical disabilities, certain non-ambulatory conditions, and early stages of specific diseases, such as Alzheimer’s disease, where intensive medical treatment is not required. |
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| Current industry practice generally is to build freestanding assisted living facilities with an average of between 40 and 100 units, depending on such factors as market forces, site constraints, and program orientation. Current economics place the size of the private living space of a unit in the range of 300 gross square feet for efficiency to 750 square feet for a large one bedroom unit. Units are typically private, allowing residents the same general level of control as residents of a rental apartment would typically have. Common areas of the most recently developed assisted living facilities may total as much as 30 to 40 percent of the gross square footage of a facility. The resident fees for assisted living facilities generally range from $1,800 to $4,500 per month depending upon location and services provided. Payment sources for assisted living are generally private pay and private insurance, although some states do provide reimbursement programs for low income recipients. |
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Memory care communities offer assisted living services with added support and care for individuals with memory impairment and cognitive disorders, including Alzheimer’s disease and other forms of dementia. This includes additional security, monitoring, and control of wandering, as well as activities and programs geared toward using existing life skills. Memory care communities often are made up of companion units with a shared bathroom and no kitchen. Units are usually small areas used primarily as bedrooms, and the units are often grouped in small “houses” with shared common spaces for living, watching television, playing games, and dining. Expanded common areas may serve all the “houses,” including activity rooms, a main dining room, and areas for exercise or special programs. |
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Skilled nursing facilities (nursing homes) offer more intensive levels of care than Assisted Living and provide comprehensive nursing and long term care to their residents. Skilled nursing facilities accommodate persons who require varying levels of care. Many skilled nursing facilities are capable of serving residents with intensive needs. Some skilled nursing facilities specialize in certain types of disease care, such as Alzheimer’s or dementia care. The cost of the care provided in skilled nursing facilities is among the most expensive in the senior care segment of the health care industry with rates ranging from $2,800 to $8,000 per month. Because nursing facilities involve medical-based business models which are subject to high liability insurance requirements and reliant upon |
| government reimbursement formulas, Christopher Place has chosen not to acquire this type of senior housing unless part of a continuing care retirement community which offers a variety of senior housing types and services. |
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Continuing care retirement communities (CCRCs), sometimes also referred to as life care communities, are congregate living facilities that include independent living with assisted living and/or skilled nursing facilities attached or adjacent to their locations. The intent of CCRCs is to provide a continuum of care to the residents. As they age and their health care needs increase, they can receive the care they need without having to move away from the community which has become their home. CCRCs typically operate on a fee-for-service basis, and the units are rented on a monthly basis to residents, while life care centers generally charge an entrance fee that is partially refundable and covers the cost of all the residents’ health care related services, plus a monthly maintenance fee. |
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