Earlier this week we discussed how M&A activity in the senior housing space has progressed rapidly this year and some of the factors that are driving it, including low interest rates and increased demand for senior housing services. The uptick in demand is partially due to economic growth, which is providing more seniors with the financial resources they need to transition into a senior housing community. Another primary driver of demand in this space is the continued aging of the nation’s population. In order to meet growing demand for senior housing services, providers and developers are ramping up construction activity in an effort to stay ahead of the curve. Some analysts have begun to express concerns about the possibility of building too many communities and the market becoming oversaturated because of this. However, these analysts are in the minority as there doesn’t appear to be any hard evidence of this occurring, especially in Illinois where the demand for senior housing services has led to a recent spate of construction projects in the state.
Construction Ramps Up in Illinois
In Gurnee, Illinois, the Texas-based developer The LaSalle Group has been hard at work on building a new memory care facility for area residents. The facility will be called Autumn Leaves of Gurnee and LaSalle expects it to be completed by the second quarter of next year. When all is said and done, Autumn Leaves of Gurnee will be approximately 30,000 square feet and will have cost roughly $11 million to build. It will also have a number of amenities including a beauty parlor, barber salon, a motion sensor program in each resident’s room, on-site nurses, and it will offer dietician services as well.
Meanwhile, elsewhere in Illinois, the senior living provider Bright Oaks Group is partnering with the Minnesota-based provider Ecumen to develop a 150-unit assisted living and memory care community in Wood Dale. The name of the community will be Bright Oaks of Wood Dale and it should be completed by 2016. The Bright Oaks Group and Ecumen have high hopes for this community and eventually hope to have 20 Bright-Oaks branded communities in the Midwest.
Lastly, Spectrum Retirement Communities has begun building an 80-unit assisted living and memory care facility in Lombard, Illinois. This community is expected to open during the summer of 2015 and will be called Lombard Place Assisted Living & Memory Care. It is Spectrum’s third senior living property in Illinois and reflects its confidence in the demand for senior housing services in the state.
These are just a few of the senior housing properties that are currently being built in Illinois and they help demonstrate the belief held by a growing number of providers that more communities are needed to meet the ever increasing demand for senior housing services. As the economy continues to improve and the nation’s demographics continue to change, many analysts expect demand to increase even further. Accordingly, senior housing providers and investors that would like to take advantage of this situation by purchasing additional communities for their portfolios should continue to look to Cambridge Realty Capital and the many differentfinancing options that it offers for acquisitions, sale/leasebacks, joint ventures, and other purposes as well.