Adaptability and innovation have been “foundational” to the success over time of continuing care retirement communities, also known since 2015 as life plan communities, and will be key to future success as well, according to specialty investment bank Ziegler. Four trends are shaping the future of life plan communities.
Four trends within the sector include a reduced emphasis on skilled nursing, contract diversification, rebranding and an increase in scale, said Lisa McCracken, director of senior living research and development, writing in the bank’s Z-News e-newsletter.
Skilled nursing
Ziegler currently tracks 1,930 CCRCs nationally that provide, at a minimum, independent living and skilled nursing on the same campus. McCracken said that the number of CCRCs has decreased slightly in recent years as some providers have exited the skilled nursing business. Instead, some operators have added assisted living for residents with higher needs.
Additionally, McCracken noted, several newly developed life plan communities are being built with independent living and assisted living units only. Also, she said, providers are increasing their aging-in-place options to supplement some of the healthcare services historically offered in skilled nursing.
Contract diversification
Contract diversification is a large part of the CCRC model, with older baby boomers (the oldest are 76) looking for greater choice and flexibility, McCracken said.
“As providers focus on the middle-market consumer, greater focus is on the ability to offer rental contracts in addition to entry-fee,” she wrote. “Each of these contract types target a different segment of the older adult customer and also have different financial and operational implications. Providers need to plan carefully when rolling out contract options.”
Rebranding
Changing names and logos, McCracken said, is becoming more common as companies aim to better reflect their cultures and missions.
For example, High Point, NC-based Presbyterian Homes rebranded last month as Brightspire, and Chelsea and Grand Rapids, MI-based United Methodist Retirement Communities and Porter Hills Presbyterian Village became Brio Living Services.
Scale
Scale is important to the continued success of CCRCs, which often means buying up adjacent land to expand the company’s physical footprint or adding services to try to draw from a larger pool of potential residents, McCracken said. Also, some companies grow through mergers and acquisitions. Multi-site organizations are on the rise, she added.
Many of today’s life plan communities trace their roots to the 1800s and early 1900s as homes for widows and orphans, McCracken noted. According to Ziegler’s tracking records, the oldest of today’s CCRCs was founded in 1817 in New Orleans to care for orphans and later became a senior living community. Seventy-one percent of CCRCs were founded more than 30 years ago, according to Ziegler.
