Encouragingly Gray – a stakeholder report
Although nonprofit retirement communities like Cross Keys Village do not have stockholders, villagers who join the program in a Residential Living cottage, apartment or home are stakeholders. Since they need to pay an Entrance Fee at the time of their move, we can rightfully regard them as investors. It is reasonable that, in return, they should expect a degree of certainty from their investment.
A specific community’s outlook can be assessed through a review of its property and its buildings, combined with a look at its financial statements. The residences and the common spaces should be updated regularly, and a walk around the grounds should show evidence of a strong maintenance and landscaping program. Similarly, poring over the latest Annual Report and Disclosure Statements will yield much insight for anyone with a mind for numbers.
But what about the industry as a whole? Are retirement communities here to stay? The answer is yes, especially in our area. The demand for continuing care on the part of Baby Boomers is far from having reached its peak. Between 2020 and 2030 – the date at which the youngest baby boomers will reach age 65 – the number of older Americans is projected to increase by 18 million. By 2030, 1 in 5 persons in the U.S. will be over 65, with rural areas tending towards a higher percentage.
While senior living marketing favors the “Fifty-Five Plus” and “Active Adult” labels, the average age of an existing resident in a community like Cross Keys Village is over 80. Therefore, if we were to identify a timeframe for Peak Gray (just as economists ponder the elusive Peak Oil, when extraction of petroleum starts to permanently decrease), that will not occur before 2045 or even 2050, when the youngest Baby Boomers hit their eighties. The subsequent decline will be very slow.
This encouraging data doesn’t signify that the senior living business model will remain static. The idea to combine housing designed for forward-looking and healthy elders, in close proximity to nursing care centers, all within a nonprofit and faith-based structure, took off in the 1960s. However, top-of-the-line communities of that time would seem Spartan and institutional in the eyes of today’s retirees. While demographics are overwhelmingly favorable, innovation and adaptability are indispensable components of a retirement community’s future success. Any way you cut it, Cross Keys Village is ideally positioned to satisfy current and future stakeholders for the coming decades.
Oliver Hazan – VP of Sales and Marketing
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