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Page 30 — Health Care & Senior Housing Quarterly — July 2021 www.crej.com SENIOR HOUSING — MARKET OUTLOOK together to cook a meal, play a game or stream a favorite show. While neighborhood design might initially cost more, financial gains are made through higher levels of resident engagement and health, which according to operators we work with, leads to lower resident turnover and an improved bottom line. n Reduce construction and main- tenance costs. Develop a building prototype that can be repeated in multiple locations, with small, site- specific adjustments as needed. Use low-maintenance, cost-effective materials like fiber cement siding, reducing the use of expensive exte- rior finishes like masonry. Strategi- cally dimension spaces to get full use out of materials like flooring and plywood to reduce material waste and installation time. Consider a sloping, shingled roof versus a flat, membrane roof since they are less expensive to build and maintain. Use panelized components that can be built in a factory and assembled on site. n Design spaces to nurture staff. It already was difficult to attract employees to senior living before the pandemic. It’s more important than ever to include spaces that nurture staff – comfortable break rooms with a variety of seating, ergonomic workspaces, outdoor patios just for them and small gyms to de-stress. Creating a great work environment for employees will reduce staff turn- over and the cost of operations. n Consider active adult. Indepen- dent living often is associated with a large campus that includes assisted living, memory care and skilled nursing buildings. It comes with a multitude of expensive services. The active adult residential concept is a slimmed-down version of inde- pendent living. It’s less expensive to build and operate, making it a much more economical option. n Forge partnerships. The COVID-19 crisis demonstrated that assisted liv- ing and skilled nursing levels of care are basically a form of outpatient medicine. Senior living operators can reduce operation costs by strate- gically teaming with the caregiving expertise of hospitals and medical companies. n Consider repurposing properties. There are real estate sectors that currently are hurting due to a variety of market factors. Across the country there are underutilized hotels, office buildings and retail centers. With less demand for these spaces comes vacant properties in great suburban locations and urban cores, left to be reimagined and redesigned into senior living communities. At a time when the inflation of construction costs is at a 20-year high, it’s important to plan for ways to make senior living more attain- able. Due to delayed move-ins and very curtailed real estate develop- ment occurring during the past 18 months, the demand for senior living is starting to swell. All signs point to the demand intensifying for the next three years, when new communities begin to come on line, making now the perfect time to start planning. Those who are bold enough to find new ways to reduce development, construction and oper- ation costs will be the big winners. s lens@kephart.com Continued from Page 26 NIC MAP data, suggest that cau- tious optimism may be justified as occupancy rates may have bottomed out around the end of March and are gradually improving for many opera- tors of senior housing and care prop- erties across the nation. So, what are some of the factors in occupancy recovery in the senior housing sector coming out of the pandemic? The rebound will be influ- enced by supply and demand, as well as consumer sentiment and prefer- ences toward senior housing, demo- graphic growth rates and economic factors, just to name a few. How long it takes Denver’s senior housing sector to recover occupancy to pre- pandemic levels is difficult to predict as we move out of the shadow of the pandemic. In the Denver metropolitan area during the past four quarters, the number of occupied units on a net basis fell by 1,095 units – it had taken about seven quarters to gain the same number of occupied units. Reoccupa- tion of units lost during the pandemic, uptake of units in lease-up before and during the pandemic, and the absorp- tion of new units coming on line this year and next will provide some clues. Going forward, the recovery is not likely to be realized equally through- out the market. Currently, about 45% of Denver’s senior housing proper- ties have occupancy rates below 80%. Properties with low occupancy are more likely to have greater challenges restoring occupancy to pre-pandemic levels in the near term than better performing properties for a number of reasons. However, there are bright spots pointing to some vigor in the marketplace: Denver does not cur- rently have a dearth of properties still in lease-up compared with the national average due to the slowdown in inventory growth in the quarters leading up to the pandemic, and that slowdown could translate into less supply pressure on occupancy over the next 12-18 months. These factors, including the timing of economic recovery and revival of consumer confidence in senior housing, will be key considerations. s lpeck@nic.org Peck Continued from Page 27