Developers see plenty of growth in senior housing market
Sally and Tom Kopacek are walking through the lobby of Applewood Pointe, pointing out the many amenities that attracted them to the Eagan senior living cooperative.
There's the library filled with books brought by residents of the newly built 96-unit building; there's a large party room with a full kitchen, televisions and tables; there are two guest rooms; there's a game room with a pool table and shuffleboard table; and there's a gym and a patio and a putting green.
"They're just beautifully decorated, nicely appointed and it's just a really pleasant place to live," said Sally Kopacek.
The cooperative opened in May. The Kopaceks, who sold their single family home in Apple Valley to move into a spacious two-bedroom unit, were among the first to put money down for a place when the project was announced.
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The Kopaceks are in their late 60s, a little young on the spectrum of those seeking out senior housing. But that's by design. Sally helped her mother move into a care facility a few years back and that sparked a realization.
"In the process of her declining years, it became really apparent to me that I wanted to be well-situated and prepared as I went into my senior years," she said. "So, in 2014 I started exploring possibilities of what the next step would be when we moved out of our single-family suburban home."
Developers are counting on many more buyers like the Kopaceks in coming years. Minnesota's over 65 age group is expected to make up a fifth of the state’s population by 2030 — the largest that age demographic has been.
In response to that need, senior living facilities are sprouting up everywhere across the Twin Cities metro area — from Buffalo to Burnsville to downtown St. Paul. These developments serve people in all steps of aging — from independent living to memory care.
"We're right on the start. It's the early side of it," said Joe Ryan, the founder and CEO of Oppidan, a developer that has seven senior housing properties built or under construction in Minnesota. "The real wave will be hitting us in 2021, 2022 and have a seven or eight year span, and then it will start falling off, just based on numbers, just based on demographics.”
Another developer, Kent Roers, is the co-founder and owner of Roers Companies. He said the company used to focus much more on apartments. Two years ago, Roers Companies moved heavily into the senior housing market.
Kent Roers said one of the biggest differences between apartment development and senior housing is the longevity of the relationship with the customer. He said about half of their apartment dwellers move out each year. With senior housing, his company is designing for a continuum of care.
"We're building buildings that have independent living, they have assisted living, and then they have memory care. So, people move into that facility — what's nice is they stay there for life," Roers said.
The variety of options has also been increasing.
Realtor Lisa Dunn with Re/Max Results works almost exclusively with older adults looking to downsize or make the jump into senior housing.
"When I first started in 2003, there was a perception that if I move out of my home the only option I have is long-term care or a skilled nursing facility," Dunn said. "And today, there are so many options available, there's way more cooperatives than there were, there's a lot more independent living and a lot more shades of gray."
According to Maxwell Research and Consulting, the number of senior housing units added in the Twin Cities has gone from about 500 per year in 2008 to nearly 2,500 added in 2018.
"There's going to obviously continue to be demand for senior housing," said Mary Bujold, president of Maxwell Research.
She thinks the market will need more middle-income senior housing than is being built right now. But Bujold also said there's also a caveat to growth in senior housing. There's a push by the state, and a wish from many baby boomers — to stay in their homes and age in place.
"There's other ways of delivering services to people that are being explored — trying to provide more efficient ways of delivering home care services to people in their own homes effectively and efficiently," she said. "We're not there yet, but there are certain things that are to be explored as an alternative to just having people moving to senior housing."
Developers say they haven't seen the push for older adults to age in place affect demand so far.