Page 20
— Health Care Properties Quarterly — June 2016
Senior Housing & Care
R
eal estate housing in senior
living attracts more inves-
tor interest than it ever has.
With life expectancy, and
quality, increasing every
year and demographic trends push-
ing plans, it seems more and more
capital arrives in senior living every
day. However, that trend brings
challenges as well.
First, many real estate developers
and investors do not understand
the market as well as long time
providers. While many investors
are accustomed to investing in
property, developing the buildings
and structures, and then reaping
the rewards that follow, there is an
additional stage involved in senior
living. Specifically, staffing concerns
at a senior-living community intro-
duce a new level of
complexity most
real estate develop-
ers are unfamiliar
with. While apart-
ment complexes
can be managed
with minimal staff
and commercial
developments
lease out space
wherein the les-
see brings in staff,
the staff at senior-
living communities
are a critical part of the equation.
The staff must be well trained and
large enough to provide the ser-
vices required by residents. That
is precisely why seniors living in
these communities, because of the
services they receive. Additionally,
the continuity of staff is critical as
regular turnover is a proven detri-
ment to the care provided by staff.
Consequently, the staff is inextri-
cably linked with the development.
Such a circumstance creates an
environment most developers have
not needed to deal with until now.
Second, the demand for new
projects and new beds has led to
a mass influx in both over recent
years. Projects race one another
from across the street to open their
doors. At a recent Denver senior liv-
ing real estate symposium, attend-
ees learned that 2,490 new units in
independent living, assisted living
and memory care had been con-
structed in 2015 alone. And even
when communities do open, many
struggle to fill their occupancies
to a stabilization rate within the
scheduled timelines previously
planned. Operators typically need
to provide rent concessions to help
speed the stagnant occupancies.
Combined with a shortage in skilled
staff capable of providing the neces-
sary care, the added expenditures
and increased timelines eat into the
return on income for many develop-
ers.
However, despite these issues –
and a whole host left undiscussed
here – it seems that the number
of real estate developers looking
to involved in senior living has
not slowed. And it is unlikely to as
demographics continue to apply
demand side pressure.
s
Mario Nicolais
General counsel,
Vivage Senior
Living, Lakewood
place, where you only need to be in
an extreme situation.
“Campuses start to evolve to be
continuum driven, where there are
more outpatient surgery services.
New campuses of the day are not
inpatient oriented,” said Smith.
And with the retailization of
health care – patients shopping
around for the cost, convenience,
quality, location and availability
they want – health care services are
no longer limited to hospital cam-
puses. Health care is now locating
where the patients are, bringing
to communities urgent care, free-
standing emergency departments
and urgency centers, for example.
“Future hospital campuses are
going to become centers for higher
and higher acuity,” said Steve Carr,
AIA, principal and health care prac-
tice lead, H+L Architecture.
“In regard to health systems, the
off-campus medical office buildings
are utilized to attract new patients
and capture more market share.
The health systems want to create
a relationship with the patient so
when more in-depth care is needed,
they proceed to their hospital,”
added John Gustafson, director,
Newmark Knight Grubb Frank.
“Just as communities have trans-
formed, so has health care. Over
the last 40 years, health care has
changed from an inpatient, sickness
model to an outpatient, wellness
model,” said Peet. “We are migrating
from the traditional model of health
care delivered within the walls of
our hospitals to increase our focus
in helping manage population
health. And because health care
is not confined to the walls of the
hospital, we’re shifting the conver-
sation of our community’s health
from managing sickness to inspir-
ing wellness.”
Hospital campuses today also
are moving away from the clinical,
sterile facilities of the past and to a
more hospitality, customer-service
model.
“Truth be told, surgery is still
surgery. The care being delivered is
changing less than the environment
it’s being delivered in,” noted Smith.
“It’s really getting away from the
drab clinical building and making
it a more hopeful, healing place, a
welcoming place.”
“Today’s hospital campus is rede-
fining the ‘patient paradigm.’ They
seek to serve an entire population’s
continuum of care with an ever-
increasing focus on preventive and
‘chronic wellness’ care,” said Justin
D. Cooper, LEED AP, vice president-
project development, Saunders
Construction Inc.
“For example, today’s hospi-
tal campus integrates wellness
throughout the facility design,
operations through educational
programs and in the construction
process. Today’s integrated health
and wellness campus is also con-
structed to the level of your favorite
mountain resort in many ways,”
added Cooper. “Dining areas have
stained wood box beams and plas-
ter ceilings, accessible iPads and
three-story sculptures are in the
hospital lobby, and glass chande-
liers located in the birthing suites.”
Both St. Joseph Hospital and St.
Anthony North Health Campus
incorporated unique elements in
the construction and design of their
campuses.
“For instance, with our facility,
there is lots of attention paid to
the patient experience,” explained
Smith, noting St. Joseph is incor-
porating hospitality-like elements
such as valet parking, and features
more natural light, common areas,
15-foot ceilings, water features and
true retail amenities, including a
Dazbog Coffee and Fit Kitchen.
St. Anthony North Health Campus
combines the services of a 100-bed
acute care hospital with the ser-
vices of an ambulatory health care
center as well as outpatient phar-
macy and lab, community chapel
and three gardens to support “opti-
mal health at every stage of life.”
Additionally, flexibility is para-
mount in the design and construc-
tion of today’s hospital campuses
due to the ever-changing nature of
health care, reimbursements and
the facility’s ability to adapt and
evolve with that change.
“From our perspective, health care
systems need to have a ton of flex-
ibility because of the uncertainty
of what will happen,” said Carr.
“Clients in their delivery are look-
ing to find more and more ways
to provide higher quality for less
cost, which puts more pressure on
design firms and contractors to be
more innovative.”
“The traditional paradigm of the
hospital campus will continue to
evolve into a much more diverse
and integrated wellness, health
education, community gather-
ing and specialized chronic care
services campus. These campuses
often must plan to integrate two
‘traditional hospital’ partners, often
where a specialty hospital provider
partners with a community or aca-
demic/research hospital campus;
each with its own specific opera-
tional and branding requirements.
Design and construction providers
must therefore bring a diverse team
of expertise in luxury hospitality,
recreation, fitness, mission critical/
data centers, demonstrative kitch-
ens and high-end retail to today’s
hospital campus,” said Cooper.
While there isn’t a crystal ball
forecasting the future of hospital
campuses, there is consensus that
their need remains.
“The future of hospitals is the
transition from sick care to well
care,” said Peet. “This change will
not mean the death of hospitals,
they will just need to transform to
meet what their community needs
to be able to provide the highest
level of care and help educate their
population on how to keep them-
selves healthy. I feel that health
care facilities will need to redefine
what services they offer and in
which way they are offering them
in order to continue to provide the
highest level of care for patients in
the way that is easy and convenient
for them.”
s
Hospital
Photo courtesy Justin LeVett
Empowering the community through education, disease prevention and providing resources for their health is why St. Anthony North
named itself a health campus versus a hospital.
