With construction starts at near record lows due to market conditions and high material costs, senior housing operators like Atria Senior Living and Presbyterian Homes and Services are being strategic about renovating, repositioning, and expanding their communities. Cities and municipalities are pushing back on senior housing projects, leading to longer development timelines and decreased approval rates for new projects.
Presbyterian Homes and Services has faced challenges in proposing new projects, with city officials showing little enthusiasm for high-density housing developments. The approval process has increased from an average of six to nine months to up to two years in some cases, resulting in a slowdown in new projects being built. Developers are finding ways to adapt, focusing on renovating older communities to meet modern standards while finding innovative ways to continue growing to meet demand.
Atria Senior Living has implemented a program to renovate its Holiday by Atria portfolio, with plans to renovate 150 communities by the end of 2025. By adding flexibility and multifunctional spaces, the communities are better equipped to meet the needs of incoming residents. Presbyterian Homes and Services has been investing in reinvestments and renovations, focusing on amenities that provide a high return on investment, such as additional storage and electric vehicle charging stations.
As senior housing occupancy nears pre-pandemic levels, operators are exploring partnership opportunities and refining programming to attract a new generation of residents. Presbyterian Homes and Services is preparing for future labor needs by diversifying its offerings and adding lower acuity products to its portfolio. Both operators are looking at innovative approaches to the senior living community of the future.
McCulla is interested in multi-use developments that combine senior living with age-restricted multifamily apartments, while Fletcher sees potential in communities that require resident volunteerism as a condition of lease agreements. Operators are also strategically choosing locations for new developments, with Presbyterian Homes and Services focusing on the Midwest and the Sun Belt regions.
