In the era of Amazon, a growing number of shopping malls built in the pre-e-commerce era are definitely showing their age. But in a bid to rejuvenate the viability of these flagging commercial properties, one large mall developer has forged an alliance with a national retirement home operator to retrofit some of its properties with a new generation of seniors’ apartments.
Last year, Revera Inc. struck a non-exclusive deal with SmartCentres Real Estate Investment Trust, one of Canada’s largest real estate investment trusts with total assets of about $9.6-billion, and its founder Mitchell Goldhar to develop at least 25 new retirement homes over the next five years on SmartCentre properties. Development applications and official plan amendments for the first two homes – a site at the Hopedale Mall (also known as the South Oakville Centre) in Oakville, Ont., and another SmartCentres mall in Vaughan, Ont., – were submitted last month.
The two giant firms aren’t obvious allies. SmartCentres has been building open-format suburban malls, many anchored by Walmart stores, for about a generation. Revera, with more than 180 properites, traces back to the Central Park Lodge chain, which was controlled for many years by the Reichmann family and later spun off as a REIT before being taken private earlier in this decade.
If fully built out, the partnership could yield more than 5,000 new seniors’ apartment units across Canada, representing a capital investment by Revera of $2.5-billion to $3.75-billion through 2024. The company, Mr. Goldhar says, “is top of class and financially capable of the kind of program that we want to do.”
Mississauga-based Revera, a privately held firm that owns or operates more than 500 properties across Canada, the United States and Britain, has been on an acquisition spree in the past four years, and has been looking for a large real estate partner with access to land and the chops to steer development applications. “Revera is looking at what it’s good at and what it’s not good at,” chief executive officer Thomas Wellner says. “We wanted complementary skills and capabilities.”
This alliance comes at a moment when the seniors’ apartment sector is navigating a complicated transition that will fuel demand for not just new dwellings but a markedly different approach. The new demand is being driven by demographics – the aging of the baby boomer generation – but also deep shifts in thinking about what retirement homes should and should not be.
Architects and developers increasingly focus on building de-institutionalized spaces with ready connections to community amenities – parks, schools, services and, as in the case of the Revera/SmartCentres partnership, retail.
“There’s a lot of change in this sector,” says architect Phil Goodfellow, a partner a G architects, which is active in this field. Adds Matt Gavin, also a G architects partner, “The coming `gray wave’ is very different from postwar seniors.”
The next generation of private retirement homes will also reflect the consumer and service-minded expectations of the boomer generation, with many drawing heavily on hospitality and luxury condo models. But like the retirement homes developed in the past several decades, they’ll reflect the “aging-in-place” philosophy of senior’s housing, which situates independent, assisted and long-term care units in a single complex.
Most of the recent design attention focuses on attracting so-called “young seniors” and creating spaces that don’t feel alienating for visiting family.
Instead of large dining halls, for example, some homes now are fitted out with open-concept kitchens and bistros to provide more diverse eating experiences. “It’s about creating more of an environment for active adults,” Mr. Gavin says.
Such complexes are also being equipped with a range of tech-oriented features, from virtual reality golf and video-gaming facilities to theatres, big screen TVs and broadband WiFi. Mr. Wellner points out that Revera recently earmarked $20-million for an “innovation in aging fund” that uses the company’s facilities to pilot emerging technologies geared at older people.
Behind these more cosmetic features lies another set of drivers in this sector, chief among them location and real estate prices. In high-cost cities, retirement homes are being relegated to the suburban edges, as the Revera/SmartCentres deal suggests. Planning and property tax rules work against building them closer to the core, Mr. Goodfellow says. “The way things are going right now, there are going to be very few seniors living in Toronto.”
Those obstacles presented an opportunity for Mr. Goldhar, who points out that his malls have an abundance of surface parking – up to 75 per cent of the area, in many cases – that could be put to more productive use.
The land, he says, is serviced, convenient for visitors but also provides easy access for the occupants of these new retirement homes. He adds that SmartCentres will be looking at the retail mix on these sites with an eye to bringing in tenants that cater to seniors apartments.
The only wrinkle is persuading municipalities to adopt new zoning rules allowing residential uses on commercial parcels. A similar question has arisen on other mall sites, notably Yorkdale, where Oxford Properties is pursuing a plan to develop condos in the parking lot. Mr. Goldhar, however, doesn’t seem worried about getting a green light. “It’s, generally speaking, considered a compatible use.”
Of course, the projects Revera will be developing over the next five years cater to a generally affluent demographic, and the need for seniors’ housing is expected to extend well beyond such projects. There’s growing interest in small-scale seniors’ co-housing schemes, in which a group of individuals or couples band together to develop a small-scale dwelling with a mix of common spaces and apartments.
Marcelo Graca, Q4 Architects’ director of mid-rise, also points to the “life lease” model, a non-profit formed around a co-op style financing approach, with units not available for sale on the open market. “The good thing about this model is that the board retains control,” observes Mr. Graca, citing examples such as Brampton’s Holland Christian Homes, a complex established by Dutch Reform immigrants in the late 1960s that has expanded in recent years to become Canada’s largest life-lease seniors housing facility.
The senior’s home-in-the-mall approach may be the next and most boomer-ish phase in what some architects who design such dwellings refer to as the `de-beiging’ of the retirement apartment. As Mr. Wellner says, “These are not what you think of as nursing homes.”
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