US developers bet New York’s ageing baby boomers would want to continue living in Manhattan
- Two US companies team up to build 17-storey assisted-living centre in Manhattan that will feature a spa, rooftop garden and bistro
Rich Manhattanites who want to stay in the city as they grow older will soon have the option of a luxury assisted-living tower on the Upper West Side.
Welltower, the largest publicly traded senior-housing landlord, and developer Hines are teaming up to build their second project in the borough that will cater to the frail and memory-challenged who want to stay in their own neighbourhood. This week, the partners bought two building lots at 2330 Broadway, at the corner of 85th Street, for US$61 million, they said in an interview.
The partnership plans to raze the vacant, low-rise commercial structures there and build a 17-storey assisted-living centre with a spa, a rooftop garden and a “bistro”, where residents can retreat for an adult drink or card game, said Sarah Hawkins, a senior managing director at Hines, who will oversee the project. The building will offer 162 assisted-living units, with about half reserved for residents with Alzheimer’s disease or other memory issues.
“All the science points to seniors having better health care outcomes and better cognitive outcomes when they’re in a community, when they’re actively engaged, as opposed to being passive,” said Tommy Craig, a Hines senior managing director overseeing the New York region. “We’re really aiming to get people who otherwise have home health care and are living alone.”
The West Side project, built in the style of surrounding buildings, represents a doubling down of a bet by the firms that a coming wave of seniors will want to keep living in the city even when they can no longer live on their own. Hines and Welltower are erecting a similar assisted-living tower on Manhattan’s East Side.
The monthly cost of living at the tower – not covered by insurance – would depend on the level of care, Welltower CEO Thomas DeRosa said in an interview. It would be similar to the East Side project, where an earlier estimate suggested some monthly rents could top US$20,000. That could be a bargain compared to the cost of round-the-clock home health aides, he said.
“You could spend anywhere between US$22,000 and US$36,000 a month to have three shifts, seven days a week,” DeRosa said. “You’ll save money moving into one of these buildings.”
It’s an opportunity that is drawing other institutional investors who see unlimited potential in the demographic shift, as baby boomers with the budget for luxury begin entering their 70s and 80s. Maplewood Senior Living and Omega Healthcare Investors are currently developing a 23-storey project on the Upper East Side that promises residents farm-to-table dining, a spa and a cinema.
New York-based Related Cos, the developer of Manhattan’s Hudson Yards, plans to build US$3 billion of luxury senior high-rises over the next five years, in the same pricey urban areas where it has rentals and condominiums. In a joint venture with management company Atria Senior Living, Related will begin construction next year on a senior housing project in Manhattan and one in San Francisco, the company said last month.
Hines – a luxury developer that is also building a Jean Nouvel-designed luxury condo tower near the Museum of Modern Art – began scouting with Welltower for a second senior housing site before they even closed or found financing for their East Side property, Craig said. Now called Sunrise at East 56th Street, it will open for residents in early 2020.
“We just have a deep conviction that the demographics of this subset of the population is just starting to age – so there’s a wave coming,” Craig said.
Hines and Welltower each have equity stakes in the West Side project, along with a third undisclosed investor, Craig and Hawkins said. They are carrying no debt. The buildings they acquired on 85th Street are vacant and demolition is expected in the first half of 2019.