WHY INVEST IN THE SENIORS HOUSING MARKET WITH CHANCERY
FAVOURABLE DEMOGRAPHICS
As of 2013, Canada has one of the highest average life expectancies for men and women in the world. With more Canadians living past 80, and an aging population that's expected to increase significantly by 2031, demand for seniors housing continues to accelerate.
Total Canadian supply of seniors housing at the beginning of 2016 was approximately 224,000 suites. By 2044 aggregate demand is forecast to be more than 550,000 suites creating a need for more than double 2016 supply.*
The current demand for seniors housing is primarily driven by Canadians that are over 75. Between 2011 and 2031, the population of Canadian seniors over 75 is expected to double in size which will create significant new demand for seniors housing and specialized care programs.
These statistics reinforce the market potential and attractiveness of investing in seniors housing as an industry with high demand and great potential for strong ROI.
Source: CBRE. Click on image to enlarge.
Source: CBRE. Click on image to enlarge.
MATURE ASSET CLASS
The seniors housing market in North America is well-established, with many large companies operating in the sphere.
Asset Class Overview
The seniors housing and long term care industry provides both accommodation and an array of services and program options for seniors. The demand for these properties is primarily driven by the segment of the seniors’ population over the age of 75. The level of service and variety of options available to the seniors housing marketplace continue to evolve as the needs, preferences and demands of seniors and their families change.
The types of properties which facilitate the delivery of accommodation and care services to seniors are typically divided into five categories: seniors apartments (“SA”), independent living (“IL”), assisted living (“AL”), memory care (“MC”) and long-term care (“LTC”). Continuing Care Retirement Communities (“CCRCs”) represent a hybrid model, and typically offer all of the care levels noted above on a single campus. *
Property Types by Services Provided
This image highlights the array of services offered across the different property types. Besides accommodation, seniors housing properties typically offer hospitality services, care services and medical services. This spectrum of property types is commonly referred to as the Continuum of Care.
Source: CBRE. Click on image to enlarge.
EXPERIENCED OVERSIGHT BY INDUSTRY EXPERTS
Chancery works with trusted partners who have many years of industry experience. Steve Suske is an expert in the seniors housing industry and runs Suske Capital along with four second-generation Suskes (Steve’s daughter, son, son-in-law and daughter-in-law).
Working alongside the Suske family are companies who have worked with members of the Chancery team for many years. These companies include Points West Living, MTCO Holdings Inc., Hillsport Developments Inc., Avenir Senior Living and Greywave Consulting.
Chancery partners with these companies as we trust their commitment to developing seniors housing that will contribute to the quality of life for seniors and know that they will deliver on-time, on-budget and with the outstanding quality that we expect from a Chancery development.
Steve Suske is an expert in the seniors housing industry. Steve founded and led Chartwell Retirement Residences (TSX: CSH.UN), Canada’s largest seniors housing operator, as well as Regal Lifestyle Communities Inc. which was privatized by Revera Inc. and Welltower Inc. (formerly known as Health Care REIT, Inc.) on October 26, 2015. He also founded Spectrum Seniors Housing Development Corporation.
Suske Capital is currently the Asset Manager for Points West Living’s portfolio of over 460 suites across six properties and has developed over 70 retirement residences across Canada and the US.
Steve is currently Chair of each of Suske Capital’s portfolio companies including:
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MTCO Holdings Inc., Suske Capital’s GTA based seniors housing development company, which develops state-of-the-art retirement homes;
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Points West Living Limited Partnership, a portfolio of seniors housing properties in Alberta;
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Avenir Senior Living in the development of Nanaimo Memory and Complex Care, and Surprise Memory Care.
Chancery’s Investment management team has over 100 years of combined experience in consolidation, operation and opportunistic investments in the seniors housing industry.
Steve Suske's Previous Projects
Harwood Place
Opened in Spring 2015
Sold to Chartwell in Fall 2015
GFA: 122,890 sq. ft.
1.5 year construction
126 suites
Montgomery Village
Opened in Fall 2013
Sold to Chartwell in Fall 2015
GFA: 131,018 sq. ft.
1.5 year construction
136 suites
Nanaimo Memory Care
Opened in May 2017
GFA: 48,451 sq. ft.
1 year construction
83 beds
Bowmanville Creek Retirement Residence
Opened in July 2017
GFA: 143,920 sq. ft.
1.5 year construction
143 suites
Balmoral Place
Retirement Community
Opening in Fall 2017
GFA: 47,839 sq. ft.
1.5 year construction
176 suites
Click on image to enlarge.
INDUSTRY LEADING PRODUCTS
Chancery creates value for our investors by seeking out innovative, industry-leading projects.
We aim to develop projects that will have options for all care levels in the seniors housing spectrum from memory care to independent living, assisted living to seniors apartments, so that seniors can find the care that they need in a Chancery development.
In Ontario there is a growing gap between the need for the care and the government’s ability to supply beds to seniors who need them. 26,500 seniors are currently without access to a long-term care bed in Ontario and over the next six years this wait list will double to 50,000.
Chancery develops high-quality, affordable seniors housing that allows seniors the ability to access services on a fee-for-service basis, allowing them the freedom to choose those services that enhance their quality of life. Living in a Chancery development offers peace-of-mind for seniors and their loved ones, who know that they can access quality seniors housing as the need arises.
Leaders in Affordable Seniors Housing
With a Canada-wide capture rate of just 9.1%**, it has become a necessity to provide seniors with more access to affordable housing in order to cover off the widening gap between government care and the needs of the demographic. Making seniors housing accessible to a greater number of seniors has been an industry focus for years, but with the high costs of construction and management, truly affordable suites have been few and far between.
In Ontario in 2016, only 1.5% of spaces rented for less than $1,500 per month, while 81.1% of units had an average rent of $2,500 or more per month*. These rental rates are a barrier for many seniors which make enjoyable and safe retirement living a luxury that is unaffordable for too many.
Chancery is working on two major projects that will revolutionize affordable care in Canada by offering a variety of options to fit into any budget, and, in some cases, offering residents access to à-la-carte services via concierge.
Canoe Bay is a seniors community overlooking beautiful Mooney’s Bay in Ottawa. Chancery partnered with Gary Harper of B&K Management to respond to a RFO from the City of Ottawa and was granted the right to purchase and develop the land in September 2016. Mr. Harper is part-owner of City View Retirement Residence where he introduced a successful affordable care model to the rather expensive Ottawa market.
Canoe Bay is an adult community that combines a variety of living options permitting active senior living and the ability to age in place in a beautiful setting. Canoe Bay seniors residence will be developed with smaller suites and more public space for amenities and activities, promoting social interaction, resident engagement and active living, while allowing for an affordable alternative to the competition.
Chancery and Hillsport Developments Inc. have partnered to develop The Bartlett Seniors Apartments in Oshawa, Ontario. With a premium central location within walking distance to Oshawa Centre Mall, these independent seniors living apartments will be competitive with market rental apartment rates. The Bartlett will offer the security and safety of a traditional retirement residence and residents can access a variety of services and activities available à-la-carte via the building concierge.
Chancery partners with local operators who understand the needs of seniors in their respective communities and has created custom platforms to fill those needs. Fundamentally, there isn’t a great deal of care being delivered in a typical retirement residence. Most of what is provided are services such as housekeeping, dining and laundry or, more generally, services that help seniors be less dependent on actual care. The primary comfort for residents of retirement residences is the knowledge that live help is close at hand, should the need arise. Chancery believes that seniors and their families can have such assurances in a more traditional apartment setting, thus meeting the needs of lower-middle income seniors. Comfortable living in retirement needn’t be a luxury and Chancery will continue to develop projects at the forefront of quality and affordability.
*Source: CBRE
** The National Seniors’ Housing Survey. 2016. Canada Mortgage and Housing Corporation.