Brent Binions, president and CEO of Chartwell Seniors Housing REITFred Lum/The Globe and Mail
Brent Binions lopes down the airy corridor, pointing out the privileges of residency: The comfortably appointed pool room and bar. The Internet-equipped library. The beauty salon, open every morning at 9, for hairstyling, manicures and pedicures.
Past the "gourmet kitchen" (where a woman gathers her grandkids once a week to hand down family recipes) and into the movie theatre, complete with banks of armchairs.
"It's not what you'd expect, is it?" Mr. Binions, the energetic, 55-year-old chief executive officer of Chartwell Seniors Housing Real Estate Income Trust , asks during a tour of the company's Scarlett Heights rental retirement residence in Toronto's west end.
And therein lies one of his key challenges as head of Canada's largest operator of seniors housing. To change public perceptions about a sector that hasn't always enjoyed the best of reputations, Chartwell has identified "social marketing to increase [market]penetration rates" as a key strategic objective.
"We keep looking for ways to get more people into our properties," he says. These include involving the broader community in fundraisers for osteoporosis, barbeques and talent shows such as the annual Senior Star competition (based on Canadian Idol and open to all comers 65 and older), to which contestants bring their relatives, friends and neighbours.
"People look around and say, 'Oh, this is not so bad'… and these are people who have no interest in our business at the present time, getting an understanding of the services that are actually out there," Mr. Binions said in an interview.
The bulk of Chartwell's portfolio is in the mid- to high-end private rental market for seniors and, like most businesses, has been marked by the recession. The weak housing market has hampered the ability of prospective residents to sell their homes and move to seniors housing. This, in turn, affects occupancy rates, which range between 85 and 95 per cent at Chartwell's rental units.
For Chartwell, however, there is a silver lining: We're not getting any younger.
"Our main target group is 75 and over, and that group is growing about four times faster than the rate of average population growth. If you are talking about the over-65 group, it's three times faster," Mr. Binions said.
"Even if we do nothing, our customer market just grows every day." He notes that this consumer demographic has not been hurt by rising unemployment (they don't work); nor have they lost their homes (most are mortgage-free), and tend to be conservative investors.
But capitalizing on this potential market is another matter. A person's decision to move into seniors housing is more a matter of need than choice as the aging process takes its toll, Mr. Binions acknowledged. People would rather stay in their own homes - "that's the norm."
Canada Mortgage and Housing Corp. said in a report that only 8 per cent of Canadians 75 and older live in some form of rented seniors housing. One reason is that the costs are typically much higher than average market rents, although the rent for seniors residences usually includes extras such as meal plans and access to medical services.
A luxury one-bedroom suite, with kitchenette, at the Scarlett Heights residence would rent for between $3,300 and $3,400 a month, and includes two meals daily and many amenities, while a luxury two-bedroom unit would cost $5,000, Mr. Binions said, adding that there are lower-cost options.
Aside from retirement residences for seniors, another 15 per cent of Chartwell's portfolio is in the publicly funded, government-regulated, long-term care sector, serving people with complex medical needs. This allows the company to offer "a continuum of care" when residents can no longer live in their private apartments.
It's a clientele that Mr. Binions has been serving since his teens, when he worked in the family nursing home business as a janitor, dishwasher, gardener and maintenance man.
A lawyer by training, he returned to run the family business in 1983 and merged it with two other companies in 2003 to form Chartwell. After a period of heavy expansion, the real estate trust now owns or manages about 28,900 suites. Its focus now is on maximizing returns from the existing portfolio and boosting occupancy rates.
Chartwell's adjusted funds from operations - that is, the cash available for distribution to unit holders after a REIT has paid its bills and invested enough to keep the business running - increased to $21.9-million in the first quarter of 2009 from $16-million in that period a year earlier.
The company "is on the right track in terms of performance," said Gail Mifsud, real estate and lodging analyst with Blackmont Capital. "And access to CMHC funding is a critical competitive advantage for operators like Chartwell. They are able to get loans in the mid-3-per-cent range … and it's a significant advantage versus other commercial property owners."
The marketing strategy, aimed at raising Chartwell's profile in the neighbourhoods where it operates, is both novel and effective, Ms. Mifsud said. "They actually say they target the eldest daughter" of prospective residents - a tactic that makes sense given that many of those eldest daughters who were born during the post-war baby boom are still in the work force.
Two years ago, after suffering a broken neck and three broken ribs in a traffic accident, Dodie Wesley - now 87 and fully recovered - heard about the Scarlett Heights residence through a friend, and sent her eldest daughter to take a look. Mrs. Wesley was adamant, however, that she would not go anywhere without her beloved "pussycats" and was not interested in any place that felt like "a home."
"We all fell in love with it," she said, adding she and her cats "have never looked back."