The retirement living industry is upping its game.
With older Baby Boomers aging out of active living, some developers are pivoting to retirement homes that allow the wealthy to age in place and in style.
Called continuing care retirement communities, these complexes offer independent living, assisted living and memory care, within the same building or on the same campus. One version, known as life care, goes a step further and includes skilled nursing, staffed with trained registered nurses and other licensed healthcare professionals. The goal is to make aging as seamless as possible.
The basic continuing care model has been a long-standing one, as are high-end projects, where beauty salons, fitness centers, and upscale dining are standard fare.
What’s new is the next-level razzle dazzle. For example, decor at The Palace at Weston, which opened near Fort Lauderdale in 2021, was inspired by the Four Seasons George V Hotel in Paris, and includes valet parking, an English-style library and four-course dinners with wine pairings.
The Mather, a 27-story high-rise in Tysons, Virginia, boasts three restaurants and a bar and aquatics classes accompanied by a cellist. “When we did listening sessions, people said, ‘We don’t need the cheapest salmon, we want the freshest,’” says Gale Morgan, Mather’s Vice President of Sales.
Operators are following Baby Boomer demographics—50 million retirees today, 80 million by 2050. Today, the top 10 percent of retirees have a minimum net worth of just under $2 million, with the top 5 percent holding more than $3 million.
For residents, the financial decisions can be complex, involving estate planning, real estate sales, and the intricacies of long-term-care insurance.
Once a retiree has moved in, adjusting to congregant living can also take time. “In the luxury market, you’ve got people who had servants and cooks and housekeepers they ordered around,” says Susan Hulett, president of the resident council at the Variel in Woodland Hills near Los Angeles. “In your own home, you can do whatever you want when you want, but in a community, you have to give up some of your autonomy.”
The earliest U.S. facilities that provided continuing care date to the early 1900s and were affiliated with religious or fraternal organizations. Typically, residents turned over their assets in return for a guarantee of lifetime health care. Today, applicants aren’t required to empty the bank, but they are vetted financially to make sure they will be able to afford payments.
Generally, the prospective resident is required to have assets worth 1.5 to 2 times the entrance fee—which can range from about $250,000 to as much as $4 million-plus. They must also pass a cognitive and physical evaluations to make sure they are healthy enough to enter the facility in units dedicated to independent living.
Both nonprofit and for-profit developers exist, with the luxury sector dominated by the latter and non-profits hewing most closely to the traditional entrance-fee contract.
Entrance fees are determined by an array of factors, including the local real estate market and the level of care desired. A percentage of the fee may be refunded to the resident’s heirs, depending on the terms of the contract. Monthly fees range from $3,000 to $12,000. Depending on the type of contract, the fees can increase with each move to a higher level of care; there also may be annual hikes for inflation.
