It doesn't take more than a quick survey of the news to know there aren't a lot of new apartment and condominium buildings being built nowadays. There's not as much demand for new units. Financing for big projects isn't readily available either.
But one type of real estate project is being built: retirement communities. There's demand for senior housing because of the growing number of older adults. Financing for retirement projects is becoming available too.
As a result, several new continuing care retirement projects are under way. These projects include places such as Park Place of Elmhurst; the Admiral at the Lake, in Chicago; GreenFields of Geneva; and Karmel, in Deerfield.The projects are in various stages of development. But most have already lined up financing, which means building can begin.
GreenFields of Geneva
"We are looking to start construction as quickly as we can," says Steve Yenchek, president and chief executive at Friendship Senior Options, which owns and operates the big Friendship Village retirement project in Schaumburg. The non-profit group plans to begin building in August at its new project, Greenfields of Geneva in the western suburb. The project is valued at $50 million.GreenFields of Geneva will be a continuing care community with several different types of housing available on the same campus. There will be 147 apartments for independent seniors, 51 assisted living units, 26 units for those with memory problems, and 43 nursing care units. A partial list of project amenities includes two restaurant-style dining venues, weekly housekeeping, a wellness and fitness center, walking trails, 24-hour emergency response system, golf course views, and activity programs.
The 20-acre campus is located in the big Mill Creek subdivision, a planned community with about 8,500 homes. Some of the new residents at GreenFields have adult children and grandchildren already living in the Mill Creek development. "Because of the location, we have a unique opportunity to offer our residents intergenerational programming," says Yenchek. Programs at GreenFields will include activities with the younger families in the area.
Like most contuining care communities, GreenFields of Geneva charges an entrance fee and a monthly fee. Entry fees start at $259,900. Monthly fees start at about $2,000. The general rule: the bigger the unit, the higher the fees. The entrance fee is refundable, but the amount of the refund depends on the type of contract selected. One option offers a 90 percent refund of the entrance fee when the resident leaves the community.
The first section of GreenFields will open in October 2011. The remainder of the project will open about five months later. So far, about 77 percent of the units at GreenFields have been reserved. That's the amount of sales typically needed by a continuing care community to qualify for financing. Once pre-sales goals are met, bonds are sold to investors to finance construction.The economic downturn has slowed the sale of financing bonds over the last several years. Lately, however, the bond markets have thawed and project plans are moving forward again.
Park Place of Elmhurst
Park Place of Elmhurst was the first Chicago-area continuing care project to recently win approval of its bond financing. The $178 million project broke ground in June and should open in December 2011.
The project features 174 apartments for independent seniors as well as 46 assisted living units and 37 skilled nursing care units. There are also 10 units for those with memory problems. Entrance fees, up to 90 percent refundable, start at about $350,000. Monthly fees start at about $2,800.
The community features restaurant-style dining, a fitness center with indoor pool, media room, club room and other amenities including underground parking.
Admiral at the Lake
The next project likely to begin construction is the Admiral at the Lake. This continuing care community will be located on Chicago's North Side at Foster Avenue and Marine Drive. The bonds to finance construction will be issued soon, which means building could start at the end of September, according to Glenn Brichacek, president and chief executive at the Admiral. The project should open in the late summer of 2012.
The project was delayed for about two years because of the economic downturn. Sales were even discontinued for a while until the economic outlook improved. Also, the Kendal Corporation, a well-known owner and operator of continuing care communities, was brought in to help finance some of the pre-construction expenses.
That strategy seems to have paid off. About 78 percent of the 200 independent living apartments are reserved. Entrance fees, with up to as much as a 95 percent refund, start at about $374,000; monthly fees at about $2,900.
The Admiral will have multiple dining venues, a fitness center with pool and spa, a wellness center, and media center as well as other amenities.
Like other continuing care communities awaiting final approval of financing, the Admiral has already started holding events for its future residents. A six-session lecture series on women in social and political leadership was held in conjunction with DePaul University. "We have had a good showing at these events," says Brichacek.
Another project getting started is Karmel, a new continuing care community in north suburban Deerfield. The building will have 219 apartments. It is the first local project of its type to be sponsored by Jewish organizations. The $200 million Karmel community is a project of CJE SeniorLife and the Jewish Federation of Metropolitan Chicago/Jewish United Fund. The 22-acre site at 1551 Lake Cook Road includes an existing assisted living project and dementia care facility. Both opened about 11 years ago and are owned and operated by CJE.
At Karmel, entrance fees range from about $250,000 to $950,000. One benefit from the economic downturn is that construction costs are lower than they were several years ago. As a result, entrance fees at Karmel are being reduced though no details are available yet. Existing contracts will be amended to reflect those changes. The entrance fee is 90 percent refundable. Monthly fees are about $1,200 to $6,000. Fees include 30 meals a month, housekeeping, access to the wellness center and programs, valet-underground parking and transportation.
A staged deposit program also allows those reserving an apartment to pay the 10 percent entrance fee deposit in installments over the course of about six months.Karmel should begin construction in early 2011 and is expected to open in late 2012.