OldMoney_Aug06_125.jpg

With the continuing rise of the over 65 population in British Columbia and a concurrent rise in disposable income among the demographic, a new wave of privatized senior care is moving quickly across the lower mainland to complement the rise of 'old money'.

Sam Zeitoun doesn’t walk; he glides. After 25 years in the high-end hotel industry, including a six-year stint as director of hotel operations at the Renaissance Vancouver, he’s developed the smooth poise that comes from catering to the needs of the well-heeled. As he swishes about his domain in a dark pinstriped suit, he casually greets his residents – the majority of them women – with the confidence of a man who knows his mere presence is a delight. Seniors are living longer, healthier, wealthier lives than ever before and developers, investors and care providers are scrambling over one another to tap a market that’s only going to get bigger. Stats released by the Premier’s Council on Aging and Seniors Issues say it all: there are currently 588,100 seniors in our province; by 2031, they will number over 1.3 million. While they currently make up a sizeable 14-per-cent chunk of the province’s population, by 2031 they’ll make up 23 per cent of the population – meaning that within 25 years, almost one of every four British Columbians will be over 65. Not only that, but the seniors of today (and tomorrow) are blessed with the longest life expectancy of the country (79 for men and 83 for women), better health and a greater propensity to spend money than the elderly of previous generations. “There is a substantial market of wealthy seniors,” acknowledges Peter Gaskill, VP of development for Chartwell REIT and CEO of Spectrum Seniors Housing, the development arm of Chartwell. In July 2005, Chartwell acquired the Vancouver-based CPAC (Care) Holdings of Vancouver to become the province’s largest owner and operator of seniors’ residence facilities. “Seniors have more disposable income. They’ve made money in their housing. There’s less memory of the Depression and the need to conserve money,” Gaskill continues. “Their children have more money and don’t need the inheritance as much as they used to. A market has really opened up of wealthier seniors that are expecting a better standard and really don’t want to be subject to regulations and the institutional nature of regulated environments.” In 2004, the B.C. government amended its 2002 Community Care and Assisted Living Act to define a new category of seniors’ housing called “assisted living,” which is registered, but not licensed. Assisted living entails the provision of not more than two prescribed personal care services, such as help with bathing, medication or grooming. For those seniors on a tight income, the government will cover up to 70 per cent of the fees in selected subsidized assisted-living units, but the legislation also opened the door wide for opportunities in the private sector. Seniors’ residences not involved in licensed care can now register to provide assisted living and cater to a wider section of the market without having to take on a nursing staff or go through the bureaucracy of becoming a licensed facility. Over the last four years, a surge of new players have entered the B.C. luxury seniors’ housing market, including Concert Properties (which developed The O’Keefe), Cape Development Corp. and American firms Sunrise Senior Living and Leisure Care, which manages The O’Keefe on behalf of Concert. Industry veterans such as Retirement Concepts and Amica Mature Lifestyles, meanwhile, have aggressively moved forward with new developments and acquisitions with a greater focus on independent living facilities. Many independent-living facilities feature a combination of condo and rental suites, with fees that cover a range of services. Meals, activities, housekeeping and laundry are provided and, at additional costs, personal care such as help with medication, bathing and dressing. There are care aides rather than nurses on staff, although there may be one nurse who visits weekly or biweekly to provide wellness counselling and chat with residents about their concerns. Retirement Concepts, a private company that continues to operate licensed care facilities, is adding a wider range of facilities to its portfolio, with a greater focus on what in the industry is known as the “campus of care” model, which provides different levels of care at a single site where residents can “age in place.” Fifty per cent of Retirement Concepts’ suites are government-subsidized. Amica, meanwhile, has decided to aim squarely at the private-pay independent-living and assisted-living market. Seven years ago, the public company rebranded itself as a provider of “wellness and vitality residences,” sold off its licensed care facilities and now operates only high-end luxury independent living facilities. Rather than owning real estate, Amica is now a management contractor. Its residences operate under the Amica banner, but are owned by developers and private investors with whom the company signs long-term contracts. It currently operates 15 facilities in Canada, including three on Vancouver Island and four in the Lower Mainland. Five others are in development in Ontario, where the company already operates eight facilities. Its 2005 revenues were a hefty $38.5 million. The $27-million Amica at West Vancouver residence, a few blocks from the Park Royal shopping centre, opened in April 2004. A stay at the lavish residence comes with social activities, housekeeping, meals, personalized exercise programs and all utilities except a phone. Amenities in the massive building include an aquasize pool, pub, tuck shop, lounge, theatre, beauty spa, arts and crafts kitchen, games room, greenhouse and private dining room. The facility’s 112 suites are divided into 78 independent-living suites and 34 assisted-living suites. Its independent-living suites, which cost from $3,000 a month for a 362-foot studio to $5,000 a month for a 1,061 two-bedroom, were filled within 14 months. At the time this issue went to press, its assisted-living suites, which cost a few hundred dollars more, were at 50-per-cent capacity. On the assisted-living floor, dubbed the “Vitalis” floor, residents are treated to a bath three times a week in what Samir Manji, the 37-year-old CEO of Amica, calls “the Mercedes of bathtubs.” A cross between a La-Z-Boy and a bath, the tub, which resembles an alien pod from a science fiction movie, can be controlled like a dentist’s chair to be maneuvered up and down or side to side. A flat-screen TV, DVD player and stereo system are on hand to transform the menial task of bathing into a spa treatment. On a Friday afternoon in June at the facility, where residents’ average age is 83, a manicurist is providing on-site treatments to a queue of elderly women congregating in one of the many ground-floor lounges. In the nearby arts and crafts kitchen, a 12-inch bust of Mozart, carved out of chocolate cake and iced to perfection, sits on the counter. It was created by residents, with the help of a visiting chef. Over a cup of coffee and complimentary pastries in the dining room – which would not have looked out of place in a Four Seasons hotel – Manji, dressed in a navy blue suit with a summery blue and yellow checked shirt, makes no secret of his mission. “We want to be the best in the high-end market,” he says. Providing premium-quality care, he insists, means that the company, by default, has to charge higher rents. “Our target market or consumer is not going to be one who would require financial subsidy or assistance from the government,” he concedes. The seniors’ housing market has suffered historically from a “stigma,” he says. “There’s a lot of reluctance when an adult child says to her parent or parents, ‘You know, you should consider moving into a retirement community.’ They remember where their parents went, and it wasn’t a pretty place.” When these seniors finally step in the door of one of his luxury developments, he says, they are pleasantly surprised. And here’s why Manji is feeling very optimistic: “You look at baby boomers, you look at demographics, it’s those adult children that are influencers today that really represent our market 20 years from now.” Carol Omstead, 59, is the president of the B.C. Retirement Communities Association and CEO of Pacific Arbour Group Retirement Communities, which owns two apartment-style retirement homes in West Vancouver and Burnaby. Milling around at her downtown Vancouver offices, a few blocks from the harbour front, she looks like the poster child of the aging baby boomer demographic. Her bleached blonde hair is short and spiky – like her heels – and her wardrobe is a blinding combination of a fuchsia leather jacket and matching fuchsia-and-gold striped skirt. A keen dragon-boat paddler, she is not a woman who is going to grow old gracefully. She says she “absolutely” sees herself moving into a retirement residence when the time comes. “Nobody grows up thinking, ‘You know what? When I get older I’m going into a retirement community,’” she observes. “The dream is ‘I want to stay in my home and I want to ignore anything bad happening to me.’ That’s changing. I think people have a much more positive perspective that life after 75 can still be quite exciting.” The O’Keefe, where the average age of the residents is 81, is notable in that it was the first retirement community developed by a major Vancouver developer. Concert Properties, which contracts out the management of the property to Leisure Care, an American privately held retirement and assisted-living company, spent around $35 million to develop the facility, and opened the site in January 2003. Today it has 95-per-cent occupancy. Designed like a five-star hotel in a muted palette of sepia, beige and gold, the residence features a front-desk concierge and its own bus, as well as a private car service. Zeitoun likes to describe it as “one-third hotel, one-third cruise ship and one-third private club.” Concert Properties is now developing similar residences in Toronto and Etobicoke, and is pursuing three other sites in Ontario and Alberta. Like those at Amica’s properties, suites at The O’Keefe don’t come cheap. Of the 183 units in the building, 141 are rental suites. Rents range from $2,600 a month for 340-square-foot studios to $6,400 a month for 1,250-square-foot two-bedroom-plus-solarium suites. Residents in the condo units, which sold in 2003 for $320 to $370 a square foot and are all currently occupied, pay monthly fees between $800 to $900 for access to the same services and amenities as renters. That’s on top of utilities and strata fees, which add another couple of hundred dollars a month. The basic package for residents at the O’Keefe includes 20 meals a month, housekeeping, a 24-hour emergency communication system, social and recreational programs, high-speed Internet access and all utilities including local phone, heat, hot water, hydro and cable. Residents have access to a gym, a spa, a rooftop terrace and putting green, qigong classes, a media room and activity rooms on each floor. Omstead, whose Pacific Arbour Group facilities rent for between $1,850 and over $3,000 a month, says Vancouver’s real-estate market has been a boon to seniors looking to retire in style. “They’re using the sale of their homes. They’ll put 30 to 50 per cent to the side and say ‘Okay, I’m going to spend that on my retirement, and I’m going to save the rest of my capital for my children.’ If they’ve got a home in Vancouver that’s selling for $700,000 to $800,000, all of a sudden affordability is not such a harsh reality.” David Podmore, CEO of Concert Properties, tells BCBusiness the decision to create The O’Keefe was a no-brainer. “We started looking at the seniors market and we were kind of intrigued that this could be a good addition to our income property portfolio.” He says he felt there was a place in the market for “a very high-quality, non-institutional seniors’ living environment. It’s targeted to people that have independence, they’re able to travel and are very active, physically, in the community. It’s a sector of the market that’s going to grow faster than probably some of the other sectors of the market.” Podmore’s assessment, if demographer David Baxter of the Urban Futures Institute is to believed, is dead on. Baxter recently released a study of seniors’ housing demand in B.C. over the next 30 years, funded by the B.C. Real Estate Foundation. A combination of factors such as increased longevity and health, says Baxter, are creating a market for seniors’ housing that is non-institutional and community-based, rather than care-based. “The really interesting market is the retirement market,” he notes. “What they’re saying is, ‘Yeah, you could live in your single detached house that’s worth $1 million. But why don’t you sell it and come move into our condo? It’s going to be a seniors-oriented condo. It’s not about care. It’s about like-minded people. It’s about security. There’s activities, somebody to look after your place, a coffee shop close by or even one in the building where you can meet and play checkers.’” The seniors of tomorrow, he adds, aren’t going to be the kind to sit back and gratefully accept whatever care they’re given. “The problem, when people talk about the seniors market, is that people want to make it a single market – poor widows – instead of looking at today’s seniors. I mean, for God’s sake, Tina Turner is a senior!” These high-end facilities may offer an exceptional level of luxury out of the financial reach of those who aren’t sitting on a real-estate gold mine or a huge RRSP, but the desire for higher living standards is being felt throughout the market. Industry players all agree that seniors (and the children that place them in care) are demanding a larger amount of creature comforts than ever before. “Twenty-five to 30 years ago, the standard accommodation was a ward,” observes Azim Jamal, the 37-year-old CEO of Retirement Concepts, which operates a range of independent, assisted living and licensed care units. He’s a genial and engaging figure, and his plush downtown office is styled like an old boys’ smoking room, with leather-upholstered chairs and heavy oak furniture. “People would share a room with four beds and there’d be no ensuite in their room. Today, the standard is private room, private ensuite for everybody. And the expectations, as well, in terms of the amount of care you get, the amount of bathing you’re going to have, the type of meals you get, are far greater than they were 25 years ago. It also has to have a residential look and feel. People don’t want to feel like they’re in an institution. So the expectation has increased dramatically.” One of Retirement Concepts’ latest acquisitions, in February, was a 50-per-cent stake in The Terraces on 7th Avenue, a 102-unit luxury independent living facility at 7th Avenue and Fir Street in Vancouver, developed by the Cape Development Corp. The top four floors of the 12-storey building are condo units, and the rest are rental suites. Jamal stops short of saying so, but the acquisition looks very much like a direct play for Amica’s and The O’Keefe’s target market. “Never before has elegance and value been so perfectly defined,” boasts the Retirement Concepts website. The Terraces on 7th features a gym, theatre room and piano lounge, among other luxuries. Its services are comparable to those at The O’Keefe and at Amica, and so is the rent: $3,200 a month for a 561-square-foot one-bedroom and $5,220 for an 800-square-foot two-bedroom. Before Retirement Concepts came on the scene, The Terraces on 7th, which had eight vacancies at the time this article went to press, was managed by the Ontario-based Senior Living Group and, confides Tracey Daniel, marketing coordinator for Retirement Concepts, it was having trouble filling spaces. Twenty rooms were eventually contracted out to the Vancouver Coastal Health Authority as subsidized assisted living units. On a recent summer morning, renovations and redesigns are taking place throughout the building, clearly in an attempt to spruce up its flagging decor. In the ground-floor lounge area, the stereo system belts out adult-contemporary Celine Dion ballads as a few elderly residents navigate toward the free coffee and cookies. It’s clearly less expansive than The O’Keefe, but has the same hotel feel. “It’s boutique-y,” explains Daniel, a well-put-together middle-aged woman in a dark navy blue skirt and blazer. “Nothing against The O’Keefe, but this is for people who want something a little less grandiose.” She’s anxious to demonstrate that the place is getting a facelift, starting with the outdoor patio chairs, which look to be slightly rain-damaged and, in some cases, spattered with bird droppings. They are going to be re-varnished in time for a “name the patio” event planned later in the week, explains Daniel. The event is being held to celebrate the patio’s new look – it now has planters brimming with flowers and some landscaping. “Before, there was nothing out here,” she confesses. Still, The Terraces has its share of high-rolling residents. Edward Calb, a principal with Cape Development, claims the development’s top floor is home to local philanthropist SK Lee, who bought two adjoining $500,000 condo units and converted them into one massive penthouse suite. For the most part, however, these luxury homes are not brimming with multi-millionaires, but rather middle-class retirees who cashed in on the family home. Take O’Keefe residents George Crawford, 83, and Shirley Stewart, 78. Crawford, a retired ceramics engineer, decided to invest in a condo at The O’Keefe after his daughter, who lived in another Concert property nearby, noticed a sign about the seniors’ residence before ground had even been broken. Crawford, who had been nursing his ailing wife, went down to the Concert Properties office, took one look at the blueprints, and said, “I’ll take that one.” “My wife’s health was on the way down and we had a big two-storey house,” he recalls over a breakfast of omelettes and toast in The O’Keefe’s dining room. Draped head to toe in Tilley Endurables, he has just participated in an exercise class and is heading off in a couple of hours to Sechelt to check up on his cottage. “The family was gone,” he continues. “It seemed time to downsize.” Crawford sold the house on 32nd and Arbutus in which he had lived for 37 years and moved himself and his wife into The O’Keefe’s biggest 1,300-square-foot two-room suite as soon as it opened. His wife passed away within months, but Crawford stayed put. He smiles as he remarks on the timing of his decision to sell his house: “The market is great.” Stewart, who has been widowed for 18 years, also lived nearby. A chatty, well-dressed woman who clearly takes pride in her appearance, she describes herself as a former “working girl.” Married to a serviceman, Stewart spent years working in hair and beauty salons, and lived just seven blocks from The O’Keefe. “I’d been there for 37 years and I needed a change in lifestyle. I saw this place and fell in love with it. I put my house for sale in the morning and sold it in the afternoon and I moved.” Before entering the facility in June 2003, Stewart confides, she had become increasingly nervous in her home. “I was scared to go to bed at night so I’d do puzzles all night and sleep in the daytime,” she recalls. “It just changed here. Seeing people every day, coming into the dining room to get your meals. It was just a different attitude. I’ve never looked back.” In fact, the change has done wonders for her personal life; within months of moving into her one-bedroom rental suite, she and Crawford had struck up a romance that continues to this day. Where can these upbeat seniors head if their health begins to fail them? If money remains no object, a place like Sunrise of Lynn Valley – average age 88 – may be just the ticket. The North Vancouver facility is one of three owned and operated in B.C. by U.S.-based Sunrise Senior Living, and offers strictly private assisted-living and licensed care. Decorated like an oversized B&B, it is filled with cozy, antique-style furniture and classic art reproductions. The atmosphere is warm and decidedly unclinical. Beside the door of each unit is a frame for residents to fill with pictures of their choosing. Not only is it a nice personal touch; it’s also a subtle way of reminding residents how to find their rooms. (One resident, however, clearly needs a little extra help. On room number 428, a large hand-written sign reads, “Mr. Wheeler, your room is next door, 427.”) In the “Reminiscence Neighbourhood” of the building’s secured third floor, where residents with severe dementia are housed, medications are politely hidden from view in a cherry wood cabinet. The cost? For the “basic assisted living care,” fees start at $145 a day for a studio suite and go up to $185 a day for a two-bedroom. Added supports are charged at an additional $12 to $56 a day. For the “Reminiscence Neighbourhood,” basic care starts at $185 a day for a studio suite and goes up to $225 a day for a two-bedroom. Adding extra care above this adds another $28 a day, with “exclusive care” billed at $28 an hour. Monthly fees for a resident requiring the highest level of care could run well into the $8,000 mark. Douglas Russell, Sunrise Senior Living’s senior executive director for Western Canada, admits the private-pay model of licensed care has been a tough sell. “The cost is significant,” he says. “There are folks in government-subsidized extended care homes who probably pay $27 to $57 a day, perhaps. You wouldn’t live here even with the base care by yourself under $145 a day.” The company, he says, is looking at creating more independent living units – rental suites or condos – that would be connected to licensed care facilities. While operators of these facilities acknowledge that the industry is competitive, they also say it isn’t getting ugly yet. But as baby boomers who have enjoyed a life of steady employment and wealth, coupled with a strong sense of entitlement, begin to hit the big seven-oh in the coming years, those vying to sell them a place where they can have one last gasp at freedom will be jostling for position. Podmore, for one, is feeling secure. “I personally predict that in 2015 or 2012 there’s going to be a whole bunch of developers that will discover seniors’ living communities,” he says. “They’ll rush in and they’ll start trying to build them, and they won’t have taken the time to develop the expertise and the skills…. Our reasoning was that we would be better to start building communities now and develop a good understanding of the needs and of the product type and how to design and manage the buildings properly, so that we build up the skills and the expertise as the demand grows.” Manji, who says he encourages more developers such as Concert Properties to get into the market, since his company contracts its management services out to developers, thinks he’s got the market cornered. “Just imagine this,” he says, his hushed voice taking on a conspiratorial tone. “Thirteen months after we open [in West Vancouver], we are 100-per-cent occupied on the independent suites. Who are these residents of ours? They are the parents of the baby boomers. The parents!” He waits a beat, then grins. “We’re just beginning to scratch the surface.”