Houston's senior housing construction rush came too soon.
Senior housing developers and experts at Bisnow's Houston Senior Housing: The Silver Tsunami event at The Westin Thursday said the city is five to seven years away from its "silver tsunami" — the boom spurred by the baby boomer generation — and the metro is now faced with a temporary slowdown of senior housing development.
“We are at the doldrums of the market right now,” Silverado Development Senior Vice President Paul Mullin said.
"The [World War II] generation is dying out. That cohort of 85-plus has gone from 2% growth a year over the past 10 years to 1% and less growth for the next few years,” Mullin said.
Colliers International Vice President Elena Bakina said based on the demographics that some of the construction seemed to be premature. She expects the peak of the boom to hit in 2030.
Houston had 1,028 units under construction in Q2, according to the Colliers midyear senior housing report. While construction activity is slightly down from the same time the previous year, Houston is still ranked third in the Southwest region behind Dallas (2,446) and Austin (1,496) for senior housing development.
Though Houston may have overbuilt a little, supported by its strong diversity and growing population, the market still has a few opportunities for senior living development and investment, Bakina said.
While there may not be a tremendous need for new product, the opportunity lies with the acquisition of distressed properties in Houston and throughout Texas, Mullin said. He suggested investors should look for opportunities where the developers lack senior living operational experience or an operator behind them running the day-to-day business of the community.
Silverado purchased the Vintage Preserve Memory Care Community, a five-year old property at Louetta Road and Cutten Road, at replacement costs in 2016, he said. The assisted living community offers memory, Alzheimer's and dementia care for seniors.
“It has become a crown jewel for us in Houston,” Mullin said.
With a range of service types across Houston for seniors, Silverado offers two hospice centers in North and South Houston and five memory care communities in Cypresswood, Sugar Land, Hermann Park and Kingwood.
Watching the advances in the healthcare sector can help pinpoint the future needs and services of seniors.
Colonial Oaks Senior Living's Carl Mittendorff expects an increase in demand for infusion centers, imaging centers and hospice care. Developers can partner with other healthcare operators or build out these service spaces within the design of their facilities.
Since Houston is the home of the biggest medical center in the world, assisted living and independent living providers should create partnerships with hospitals and other healthcare providers to help identify their target markets, Mullin said.
Silverado positioned the Hermann Park community, a memory care, skilled nursing and rehabilitation center, to service frequent patients of the MD Anderson Cancer Center and The Texas Medical Center.
“They can’t stay at MD Anderson for $1K a day,” Mullin said. “We provide a lower daily rate but the same clinical service that they need ”
Senior living developers are not only fighting each other over interested clients but also trying to win over those who prefer to live at home.
The advances in technology and greater need for convenience with the growth of home food delivery, grocery delivery and the other platforms make convincing seniors to leave their home even harder, Avanti Senior Living co-founder and Chief Operating Officer Lori Alford said.
“People are right fitting the homes and putting the ADA elements into the homes to keep their loved ones,” she said. “It is such a stigma of being put in [the] prison of senior housing.”
The Woodlands-based Avanti wants to make senior living sexy, Alford said. The modern design of the building is important to the future implementation of the programming and services. That includes building technology into the properties.
Its Cypress location, which is near five other senior housing developments, delivers technology directly to its residents by providing highly customized tablet computers, community-wide WiFi and streaming technology.
Avanti's boutique-style assisted living and memory communities feature a range of amenities, including a wellness center, a theater area, a full-service salon and a spa offering relaxation therapy, aromatherapy, therapeutic massages, hair styling, manicures and pedicures.
"We programmed our buildings for what seniors want and desire," Alford said. "What the modern world wants today. That has set us apart."