The retirement community industry prepares as the baby boomers begin to hit 65.
renderings courtesy The Solana
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In Germantown, a retirement community called The Solana, operated by Brookdale Senior Living, is set to complete construction in late 2012, opening 182 new units for independent living, assisted living, and dementia care.
The community will include everything from an indoor pool to a theater and even a bocce court, depicting the kind of cruise ship-like lifestyle that newly retiring baby boomers have been planning and saving for.
But what should be a goldmine for architects, construction companies, and investors is turning out to be more of a numbers game than most previously thought.
“When I saw the numbers of baby boomers who were going to begin retiring, the numbers are phenomenal,” says Doug Burris, principal for Renaissance Group Inc., whose college studies on the architecture of retirement communities led him into the business.
“They are going to have major housing needs different from what we have already built. So retirement living has got to be a big thing over the next 20 years.”
According to AARP, the first Baby Boomers began turning age 65 in 2011. Since then and for the next 18 years, seniors will turn 65 at a rate of about 8,000 per day.
Burris originally worked for the firm that designed Kirby Pines Estates, a six-year project, and later he started Renaissance Group, hoping to someday build his own retirement community.
Several, like a planned mixed-use assisted living development in Lakeland, have thus far fallen by the wayside.
Funding for construction projects is subject to tighter regulations, and banks are looking for borrowers who already have a lot of wealth accumulated.
“The economy [downturn] hit, so we haven’t actually begun a project on that property yet,” Burris says. “I’ve designed a couple for that Lakeland property and another developer wants to buy that land and develop his own assisted living.”
That means that Burris’ design may never see the light of day, but there were good reasons for starting the project. He said the rate of return on investment is very high for successful retirement community construction projects.
Chad Clark, vice president of Rogers Construction in Lawrenceville, Georgia, which is handling the construction of The Solana, said that retirement construction in his business has increased over the last eight years and now represents about 50 percent of revenue.
“We saw some activity happening in the Atlanta market in 2005 and it’s carried over to other states,” Clark says. “There are people jumping into the market from other markets, trying to dabble in [retirement construction].”
Rogers Construction has built several retirement communities around Atlanta. Other than a retirement community renovation project in East Tennessee, The Solana is the company’s first project in the state.
“It’s a great project and we’re glad to be the general contractor on it,” Clark says. “It’s going to be a great facility.