Merrill Gardens President Bill Pettit explains how senior housing is evolving and why he believes seniors have an opportunity to take advantage of the current economic situation.
Q. What do you believe is the future of senior housing?
A. When we started Merrill Gardens, senior housing was an emerging industry and many seniors didn’t understand what it was all about. We are not a nursing home, and it took awhile to get that message across. Merrill Gardens is a lifestyle company and we believe that’s the future. Our communities offer independence with private apartments, restaurant style meals with no set meal hours, and an extensive physical activities program. Residents tell us there is never enough time to participate in all the activities and programs. We also provide transportation, weekly housekeeping and 24 hour staffing.
We believe residents should maintain the same lifestyle at Merrill Gardens as they did when they lived in their home. In many cases, residents find they are more independent because they don’t rely on family members for trips to the doctor, cleaning, home maintenance and socialization.
Q. How is senior housing evolving to meet the needs of residents?
A. We are responding to what our residents want. We now offer concierge services because residents find it valuable. Just like a hotel, we can assist with shopping, dog walking, party planning, and outings to dinners or shows.
The design of our communities provides for social opportunities, with wine bars, movie theatres, work out rooms and intimate bistros. We have buses to take residents on group outings and Town Cars for smaller groups.
It used to be that seniors would stay in their homes for as long as possible. This led to social isolation, poor nutrition, stress over home upkeep and the need to rely on family members for help. Today, seniors understand they can move to Merrill Gardens and live in a private apartment, dine in the restaurant style dining room on their own schedule, stay physically and mentally active and enjoy their retirement.
We also offer services to meet resident’s changing needs, such as bathing and dressing assistance or medication management. Residents only pay for what they need and the services are delivered in the privacy of their apartment. Seniors don’t have to move; our caregivers come to them.
Q. With the popularity of senior housing, you believe that savvy seniors should not wait to move to a community. That seems contrary to our current economic situation?
A. We are certainly concerned about the state of the economy and its impact on seniors. What you might be surprised to learn is that the troubled economy is actually creating a rare opportunity for seniors who are considering a move to a retirement community.
Occupancy has declined at senior housing communities recently and that provides an opportunity for seniors. Those who move now can be selective and find the apartment they want at the monthly rate they want. We don’t anticipate that will be the case when the economy stabilizes. As occupancies return to normal, seniors will lose leverage.
In the past, developers were regularly opening new communities. Now, with limited credit available, senior housing companies are not building. This lack of development is going to create a serious supply and demand imbalance. It takes years to build a new community and it will take many years for the industry to catch up to demand.
In addition, the senior population is the fastest growing segment of our population. There are approximately 38 million seniors in this country right now and that is expected to increase by more than 1.5 million seniors per year over the next 20 years. Less than 10% of the senior population currently lives in senior housing. If we see a conservative 10% increase in the number of seniors who want to live in a community, it will be more than the existing supply and that is going to mean a significant shortage in the availability of senior housing, making it difficult for seniors to find what they want.
During previous downturns we saw a decline in occupancy quickly followed by an increase as the economy improved. We think it’s going to be more severe this time because there are no new communities being built and the senior population is growing so quickly. Also, in previous downturns, occupancy rates have fallen farther so there were more apartments available as occupancy returned to normal.
Seniors who move now have the chance to be selective and choose the community they want and the apartment that meets their needs. They will find exceptional communities, better apartments, better rates and more choice with appealing floor plans. Those who wait may not have many options.
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