Patrick McGee of Dallas-based Abby Development, an owner and operator of luxury seniors housing communities, says secondary markets lack the kind of high-end seniors housing found in big cities.
That’s why the company prefers developing and operating in markets that don’t always get the lion’s share of the headlines, according to the development associate.
Abby has developed four senior living communities, including independent living, assisted living and memory care, in East Texas.
The company has five upcoming senior living projects planned in five separate markets across Texas, Louisiana and Arkansas consisting of 568 independent-living units, 288 assisted living units and 150 memory-care units.
Seniors Housing Business recently spoke with McGee about the opportunities and challenges of operating in smaller markets.
Seniors Housing Business: What are a few traits the markets you are in all have in common?
McGee: Each market we’re pursuing is experiencing strong population and employment growth, serves as a regional hub for healthcare, has sizable populations of both seniors and their adult children and demonstrates demand for a high-end senior living community.
SHB: Why are you attracted to smaller markets?
McGee: We’ve had success developing in more secondary and tertiary markets in the past because they often lack true luxury senior living options despite exhibiting strong demographic trends that show a need for something better.
SHB: What is your secret to success in operating and/or owning in these markets?
McGee: Many secondary markets don’t have any senior living options that offer the full continuum of care in one location, which allows us to automatically differentiate our product by providing independent living, assisted living and memory care on one campus.
We also pay close attention to the quality of construction and range of services and amenities being offered in a given market to ensure our communities offer something that isn’t currently available. The end result is a high-end senior living community you’d expect to find in a primary market, making it the preferred community in these secondary markets.
SHB: What is your hold period?
McGee: Our company has a healthcare management division specializing in seniors housing and care, which allows us to own and operate these communities over long periods of time.
SHB: What was a property you most recently sold, and what were those transaction details?
McGee: The Hamptons of Tyler in Tyler, Texas, which had 126 independent living apartments, 30 independent living cottages, 56 assisted living units and 30 memory care units. It was built in 2005 and sold in February 2017.
SHB: Tell us some similar characteristics about the markets you develop in. Let’s focus on three examples: Lafayette, Louisiana; Baytown, Texas; and Conway, Arkansas. How are the cities where these properties are located exemplary of what is unique about your deliveries and/or business models?
McGee: All three markets are very different from one another, but each has a strong healthcare presence, burgeoning economy, large populations of seniors and adult children, and a need for more senior living. We’ve identified voids in each market’s senior living options and tailored our developments to exceed the expectations that have been set.
SHB: To what degree are seniors underserved in small markets?
McGee: Seniors and their adult children in secondary markets are faced with choosing between a luxury community hours away or settling for lower quality in their hometown. Our experience has shown that they’d prefer to stay close to home, so providing a community that would compete with the best in a primary market makes the decision much easier.
— Lynn Peisner