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Back in 1996, Joyce Clark served as the director of the first assisted-living facility in Oklahoma City. She never imagined where that first job would take her.
At the time, a company asked Clark to do some consulting and feasibility studies regarding the possibility of adding more facilities to the market.
The next five years would see the assisted-living market explode in the the metro, thanks in large part to Clark and her company, Achievis Senior Living Associates.
“I never looked back,” she says. “Assisted living is just the perfect choice for people who need a helping hand. It’s such a fabulous alternative to other options.”
Since that time, 32 more assisted-living facilities have sprung up in Oklahoma County.
With 124 licensed assisted-living facilities statewide, Oklahoma City constitutes 26% of the market share.
Clark says the last five years have shown a flurry of activity in the market, with five new stand-alone facilities opening and another residence expanding its offerings to assisted living.
Investors seem to think it’s a fantastic option, as well.
Clark says senior housing and related care projects have attracted substantial interest from investors who seek lower risk and higher yields than offered in traditional real estate arenas.
Senior care development is not recession proof, but its need-based market reduces its dependence on the economy, compared to office, retail and resident housing development.
THE BABY BOOM
There is no doubt demand is driving the supply.
Clark points to the the aging population as the prime catalyst for assisted-living growth. People age 65 and older will account for nearly 20% of the overall U.S. population as early as 2030, compared to about 13% in 2011.
That means there are plenty of customers ahead.
Most acquisition and construction activity has been revolving around assisted-living and skilled-nursing facilities, especially those with Alzheimer’s and rehabilitation units.
Clark, who consults nationwide, says Oklahoma assisted-living development cost and operating reserve averages $110,000 to $120,000 per unit.
Escalating construction, land and financing costs are pushing those numbers upward.
Internal rates of return certainly vary, but can hover as high as the 20% range with monthly assisted-living rental rates in the metro ranging from $2,200 to $4,000.
Debbie Riddle is the administrator of FountainBrook Assisted Living and Memory Support in Midwest City, a facility Clark designed.
Riddle says the complex is ahead of schedule on occupancy at 71% after a November 2011 opening.
“There are so many people who are not appropriate for a nursing home,” she says. “They don’t need nursing care around the clock. They just need some assistance now and then. Here, they have the opportunity to pick and choose based on what their actual needs are.”
Julie Kuiper has been a health care facility administrator in the metro for 20 years now. Currently the administrator at The Lakes Health Care Center, 5701 N.W. 93rd, she agrees the market has exploded.
“[Supply and demand] is a big part of it,” Kuiper says. “The market we’re in on the north side, I think we’re a little oversaturated.”
Clark agrees that the expansion of assisted-living offerings — although needed at the time — may be ahead of the curve now.
“I think the days of ‘build it and they will come’ are somewhat over,” she says.
Clark also helped bring to fruition the state’s first assisted-living facility that accepts Medicaid, Village at Oakwood, which features restaurant-style dining and a patient-focused environment.
In her eyes, it was a huge coup. “Politically, the state of Oklahoma is still in the mindset of sending people to nursing homes, which is more expensive than sending them to an assisted-living center,” Clark says. “For those people who don’t need nursing home-level care, it’s a waste of our tax dollars.
“Nursing homes fill a place on the continuum of care,” she says. “We need nursing homes. They do a great service, but for those people who don’t need that level of care, assisted living is a proven choice of lifestyle.”
–Photos by Mark Hancock