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Senior housing projects race to meet demand

Summerport, a four-story, 126-bed facility near Windermere, is one of the latest senior housing projects planned for the Orlando area.
Summerport, a four-story, 126-bed facility near Windermere, is one of the latest senior housing projects planned for the Orlando area.

The proliferation of senior housing projects underscores a demographic need and promises plenty of steady work for builders.

The market for this type of construction is undergoing its biggest burst since at least before the recession, industry experts say.

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And the Orlando area is seeing an out-sized share. Within just the last four months, at least half a dozen of these properties have been announced or begun building.

The latest three involved in the planning process are Memory Lane Cottage, a 10,950-square-foot, one-story retirement center in Oviedo, and two near Windermere, a 120-bed facility on the east side of Apopka Vineland Road and south of Florida's Turnpike; and Summerport, a four-story, 126-bed facility on 5.4 acres between Speer Island Drive and Lake Speer.

Others on a larger scale include Legacy Pointe, a senior housing facility on nearly 60 acres near Oviedo that will be overseen by civic leaders including former insurance executive David McKinney, philanthropist John Lowndes and banker Tom Yochum. That project involves a land sale or lease arrangement with the University of Central Florida's Real Estate Foundation.

And work will begin by the end of this year on a senior living community in Osceola County whose builders say will "break the mold" for luxurious living with their $60 million, 225-room facility.

Senior living facilities vary, but basically are like hotels or resorts in their construction. They contain, among other things, bedrooms, lobbies, lounges, kitchens, dining rooms, transportation and laundry facilities.

"The demographics are growing and there is a need as people are living longer," said Chris McGraw, a senior research analyst at the National Investment Center for Seniors, Housing and Care.

And Florida is seen as an ideal location, sunny and full of seniors.

There is also broader acceptance, "as people come to know these are not the nursing homes of 40 years ago," McGraw said.

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Indeed, the occupancy rate for senior housing across the nation is 90 percent, McGraw said.

And there will be even more demand.

"There will be a demographic wave coming that will need some type of housing as the Baby Boomers age," McGraw said.

The 85-plus demographic, which is the prime group for senior living, "is the fastest growing segment of the population so you are seeing all this building of senior residences," said Andy Cohen, chief executive of Caring.com, a website that provides information about senior housing.

"There are more seniors in Florida so they are building more there," McGraw said.

People are also better positioned to move into the facilities now that the recession is over. The economic downturn took the value from their homes, which are usually sold and the proceeds used to pay rent at the senior living facility. Now that home values are recovering, there is more money to remain a resident, which considerably ups comfort levels.

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There is also more money available to build the sites.

"Investors previously held back on the sector because there was comparatively less information about it," said Imran Javaid, managing director for health care real estate at Capital One. "Now, people realize that it is a recession resistant sector after seeing how it performed during the big downturn."

In fact, "There is now a lot of money chasing what is a finite number of quality facilities that can be built," Javaid said.

For its part, Javaid said Capital One is among those pursuing deals.

Frank Marro, chief executive of private equity fund Drever Capital Management, builds and invests in senior living facilities and calls the market "lucrative."

Many institutional investors have not recognized the category "so the prices of the properties have not been driven up yet," Marro said. "But inevitably that will happen and our investors will profit."

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