Here are the trends behind Colorado's senior real estate boom
Aging boomers are driving this housing niche
Over the next 15 years, the number of people in Colorado age 65 or older is expected to more than double, creating a high demand for senior living facilities that offer more than the sterile, institutional nursing homes of the past that frightened children visiting elderly relatives.
In large part, the older population is a result of the wave of baby boomers — those born between 1946 and 1964 — who came here in the 1980s and 1990s. But the state has increasingly become a destination for retirees who want to be closer to their children and grandchildren who live here.
“Colorado is a sought-out destination for retirees,” says Camille Thompson, president of Christian Living Services, which offers specialized design consulting and financial projections, as well as ongoing management of a community after it is completed. “Adult children also want to bring their parents here. Colorado has been one of the nation’s top markets for future growth of senior housing.”
Christian Living Services, which manages a number of senior communities throughout the state, has teamed up with developers to build even more. Among its latest projects is Cappella Assisted Living and Memory Support, a community that will include 40 assisted living and 26 memory support apartments in Grand Junction. Christian Living Services is joining forces with with Denver-based Confluent Development on the project.
Thompson says it’s important to design the communities with amenities that make it enjoyable for both residents and their families to be there. Multiple restaurants, game rooms, milk-shake bars and common space to offer life enrichment programs in art, music, theater and education are all part of the package.
“We create these platforms where older adults keep growing,” Thompson says.
When the last of the baby boomers reach age 65 in 2029, they will represent more than 20 percent of the total U.S. population, numbering about 60 million, according to the U.S. Census Bureau. The U.S. Department of Health and Human Services estimates that about 70 percent of the over-65 population requires some form of long-term care, which will create unprecedented demand for senior living and nursing services in the coming decades. Today, more than 733,300 seniors call senior living communities home.
In addition to the aging population, a robust real estate market over the last five years has spurred development of senior living communities. Balfour Senior Living is adding an assisted living community to its Louisville campus and is developing a 63,000-square-foot community on a 15-acre site in Denver’s Stapleton neighborhood. The project will include 58 assisted living apartments and a 16-unit secure memory-care component.
“Senior housing as a group – independent, assisted, memory, skilled – has been the best-performing sector in the real estate universe,” says Mike Schonbrun, Balfour’s founder and chief executive. “It’s moved from being the awkward redheaded stepchild in the real estate sector to being one of the main sectors.”
Schonbrun says that during the last few years, most institutional investors put their capital in assisted living and memory care facilities, rather than independent living, which now is starting to see a bit of investment. Assisted living services typically provide help with bathing, dressing, medications and meal preparation, but encourage as high a level of independence as possible for residents.
“Assisted living was in the doldrums until the Great Recession,” says Schonbrun. “Then it began to become more popular. More buildings got built than independent because of the perception that it’s need-driven. You can’t defer, you can’t wait. It seemed like a more conservative play. Independent is a lifestyle choice and can be deferred.”
Balfour, which is focused on Colorado, selects strategic locations that have not seen much activity in the senior living realm.
“We want to go to markets that – if not overlooked– may have higher barriers to entry or harder-to-get entitlements,” Schonbrun says. “We are focused on the upper tier of the market where people expect a high level of service, great food, transportation and activities. We need to go where people can afford it.”
Growth in the senior housing industry has attracted a number of new players to the market, including Denver-based 4240 Architecture. The firm had been focused on hospitality projects until the Great Recession, when it landed a contract to design student housing at Colorado State University in Fort Collins. More recently, the company was asked to design a senior living community in Vermont and is looking for similar projects throughout the country, including Colorado.
“The whole reason we were invited to do the Vermont project is because we bring that hospitality experience,” says Louis Bieker, a principal of the firm. “Anything that feels like a nursing home or a hospital is being downplayed.”
Like Schonbrun, whose Balfour at Riverfront Park is in downtown Denver, 4240 will be selective about the locations and types of projects it will design. The Vermont project is similar to Balfour’s downtown campus – in an urban setting at the confluence of two rivers and a transit line.
“We don’t do Hilton Garden Inns or Marriott Courtyards,” Bieker says. “We do unique, boutique hotels, and that’s what we want to do with senior living. This is plopped in the middle of an active urban center. That’s its differentiator and it’s what made us interested in it.”
Another player new-to-the-scene is Rosemark Development Group. With more than 30 years of combined experience in the Denver real estate market alongside Michigan-based financial partner, Pomeroy, the firm has built an assisted living and memory support community in the Mayfair neighborhood of Denver.
“This neighborhood really needed senior housing support,” says Anne Rosen, co-principal of Rosemark Development Group. The facility – on a small infill site – opened in mid-March and is contemporary yet comfortable, easily walkable and light-filled.
“It’s a need-driven housing choice,” Rosen says of the assisted living and memory support market. Providing high-touch and high-tech care alongside home-like amenities, the 72,000-square-foot, 88-unit Rosemark also provides a creative dining experience, large fitness area, and off-campus programming and entertainment.
According to Rosen, most of the new residents at Rosemark are coming from within a 2-mile radius. “That’s exactly what our demographics had indicated – that there was a large pent-up population of folks who were aging-in-place and now need this level of service.”
And the enthusiasm from the senior facility reverberates into the surrounding area.
“If you drive the Mayfair neighborhood, you see a tremendous amount of new energy coming into the existing housing stock,” Rosen says. “When people sell their homes that they’ve lived in for a long time, new residents and new families have the opportunity to create value in this neighborhood. There’s a symbiotic relationships between the different types of housing. We’re investing in this neighborhood and having a positive impact.”
Many of the projects Denver-based Shaw Construction has worked on in recent years have been multifamily, so as senior housing development has ramped up, the company has taken on more projects in that sector. The firm is currently building three projects across Colorado: 5280 Senior Housing project in Denver’s Uptown neighborhood, Brighton Village Phase II in Brighton and Alta Vita in Longmont.
“We’re just adapting to the times,” says John Baker, project manager for Shaw. “People are getting older and instead of living with their families until the end, they want to live by themselves in a nice place.”
While the independent living sector hasn’t boomed like assisted and memory care, there are still plenty of options to choose from. Balfour Riverfront Park offers both independent and assisted living, as well as Alzheimer’s and memory care.
Other options for independent living include age-restricted communities like Oakwood Homes’ The Fairway Villas at Green Valley Ranch. Oakwood already has sold 15 homes in the community to people who are 55 or older. That target audience mainly bases its buying decision on lifestyle, and with a clubhouse and pool overlooking a golf course, The Fairway Villas has proven to be popular.
“The main thing about Green Valley Ranch is the buyer does shop regionally,” says Kristin White, president of Oakwood. “They want to be near their grandkids or kids and have easy access to the airport.”
The Aria development, which has assisted living that was built years ago, offers co-housing that is attracting older residents, particularly single women.
“We have a group of women who are probably 60 to 70 years old all living in single-family homes now but don’t want to age by themselves, so they’ll move into co-housing,” says Susan Powers, president Urban Ventures, which is developing Aria. “The isolation of older people is not a healthy environment. Being able to interact and being part of a community that offers an intergenerational environment seems to be the healthiest place for people to be as they age.”