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Continuing care retirement communities

Still going strong, poised for growth

Created date

February 21st, 2012

With the economy now on the mend, Americans are trying to make sense out of where things stand as we move toward financial recovery in 2012. Though few sectors of the U.S. market system went unscathed in what economists have dubbed the Great Recession, some areas have managed to weather the storm better than others among them the nation s continuing care retirement communities (CCRCs). Offering a blend of independent living and health care amenities, CCRCs provide their residents the benefits of an active, stress-free lifestyle combined with the availability of medical resources if necessary. According to industry experts, this feature is largely responsible for the consistent performance of CCRCs late into the recession. Overall, continuing care retirement communities have for the longest time, and still do, run higher occupancy rates than other forms of senior housing, says Michael Hargrave, vice president of the National Investment Center for the Seniors Housing & Care Industry. CCRCs can sustain higher long-term average occupancy rates as opposed to other forms of senior housing because there s a substantial group of people out there who prefer the CCRC model. If they need medical or specialized care down the road, they can access those services on the same campus.

Exponential growth projected

Based on population projections, the demand for this model of living will grow exponentially in the coming years. Some estimates predict that upwards of 10,000 baby boomers will turn 65 each day in 2012 alone. What s more, a 2011 survey from Ameriprise Financial found that over a third of Americans ages 40 to 75 considered health care options and facilities very important in determining where they will live in retirement. As Dan Dunne, director of communications for Erickson Living, a national leader in building and managing CCRCs, points out, CCRCs are especially attractive to seniors since they allow them to convert home equity or other assets into housing and to receive daily living services and health care in a way that keeps monthly expenditures more stable. Dunne says that Erickson Living s occupancy rate has recently reached 94% compared with the industry s average of 88%; and their communities continue to grow, with construction under way at various sites across the country, including Maris Grove in Delaware County, Pa., Ashby Ponds in the Northern Virginia area, plus extended care neighborhoods at Erickson Living s Texas communities in Dallas and Houston. There are certain components of the CCRC living model that are very attractive to people because these communities are much more than a place to live, Dunne explains. In addition to eliminating the stress of house maintenance, Erickson Living communities, for example, offer transportation, on-campus activities, and a worry-free lifestyle. And looking ahead, the CCRC industry in general seems to have a bright future. A 2010 report from the U.S. Census Bureau forecasts that the 75-plus population is expected to grow 8.1% over the next five years. Furthermore, over the next ten years, the annual rate of growth of the 75-plus population will increase 457% (2012 2022). The U.S. Census Bureau also projects that the population of retirees most likely to move into a CCRC will reach 33 million by 2030 and 47 million by 2050, only further pressing the need for industry expansion. CCRCs represent an increasingly important living option for seniors throughout the U.S., Dunne asserts, and the entire industry as a whole is strong and will continue to provide tremendous advantages to the seniors it serves.