With the senior population in this country on the rise, and the demand for senior housing of all types climbing, many senior housing companies have attempted to create a more affordable senior housing product for those who cannot afford the high rates of the average senior living monthly rent or buy-in fees. Many of those companies have had a difficult time breaking into the affordable senior living market. Drever Capital Management, a company new to the senior housing market, but seasoned in apartment development, is investing in the middle market for senior housing. Drever has an extremely high retention rate in its apartment buildings, and the company incorporates programs to improve the quality of life of its residents. Since 1968, the company has acquired, managed, and developed over 170,000 apartment units targeted at the “working man.” The company plans to continue this same approach as it moves into the senior housing market. According to Chairman Maxwell Drever, “it’s a natural transition. As these people retire and age in our multi-family apartments, we are not providing this same middle market demographic with senior housing.”
Drever has targeted potential turnaround opportunities. For example, the company recently converted Richmond. Virginia assisted living community Chesterfield into a 48-unit private pay memory care community. Chesterfield’s rents average $3,500; much lower than other memory care communities in the area. Drever plans to spend $500 million in development costs on senior living.
Drever is simplifying the design features of its assisted living communities. For example, they are adding wine bars instead of the lounge areas traditionally used in senior living communities that are losing appeal. Exterior features are also being added that will help its communities feel like home. Drever is also planning to eliminate features and amenities that it sees as unnecessary and add to the high price of some communities. Drever’s goal is to “appeal to residents with champagne tastes, but who have beer budgets.”
On average, Drever Capital Management is targeting its communities to cost approximately $1,700 per month for a rental unit in its independent living communities that do not include services. The market rate currently hovers around $3,000.
Contact Cambridge Realty Capital
Cambridge Realty Capital specializes in providing financing and capital for large-scale improvements to senior living facilities. We also have expertise in mergers, acquisitions, and joint ventures. For any questions regarding finance and capital for your senior living initiative, contact Cambridge Realty Capital. If you are considering an investment into middle-market senior housing, let us share our expertise. Our dedicated experts are standing by to help you improve your community.