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Building for generations to come

Daily Journal of Commerce

April 15th 2016

Senior living facilities are sprouting up in metro Portland and around Oregon as developers and management companies rush to meet the demand for the state's booming senior population.

Fee Stubblefield's The Springs Living is among the busy developers. The McMinnville-based company is building a 216-unit senior living project in Eugene. The Springs at Greer Gardens is projected to open in February 2017.

Next spring, Stubblefield plans to break ground on a 229-unit facility at Kruse Way and Boones Ferry Road in Lake Oswego. The complex will be similar to the company's Tanasbourne facility in Hillsboro, but "customized for Lake Oswego," said Stubblefield, the company's founder and president.

"It'll be world-class," he said.

Stubblefield is relying on Todd Construction and Myhre Group Architects for those projects.

The Springs Living is also at work on a 100-unit addition to The Springs at Sherwood. The expansion will more than double the size of the downtown Sherwood facility, which currently has 65 units. Stubblefield is using LRS Architects Inc., and plans to use The Springs' own in-house construction company for the project.

Senior housing projects get little notice, especially compared to the highly visible towers rising in central Portland. But developers are spending serious money on them.

The new projects come as a forecast from the state Office of Economic Analysis expects Oregon's 70-and-older population to jump 45 percent between 2015 and 2025.

Oregon has a higher share of seniors than the national average, and senior housing is a hot market nationwide.

"We're seeing a great deal of assisted living," said Brad Shain of Seattle's Columbia Pacific Advisors, which is developing 49 assisted living projects across the nation. "There's a rebirth in it."

Responding to demand
Companies such as New Senior Investment Group Inc., a publicly traded spin-off of Newcastle Investment Corp., are on a buying spree. Last year, New Senior Investment Group spent $1.3 billion to acquire 49 independent living properties, four assisted living properties and a continuing-care retirement community.

A rush of building is in the pipeline to replace older senior housing facilities, Shain said. "These old buildings are outdated, and there's a great new wave of product."

Locally, Rembold Properties is developing The Ackerly at Timberland, a 148-unit project in the Cedar Mill area. Construction is under way and on track to finish around August, said Kali Bader, Rembold's vice president.

Rembold is planning to develop another senior living project in the Portland-metro area, Bader said, although she was not ready to discuss details.

"There's a lot more demand here than in cities across the country," Bader said. "It's just well received here."

The Ackerly at Timberland is managed by Leisure Care, a Seattle-based company. The facility is accepting deposits, and Leisure Care is operating an information center at the site, 11795 N.W. Cedar Falls Drive.

Another developer is ushering a smaller project through the early stages of the city's approval process. Senior Housing LLC, an entity associated with Eric Jacobsen of Jacobsen Development Group, has asked the city of Portland for early assistance regarding a four-story, 30-unit project at 7807 S.E. 13th Ave., in Sellwood. The property sold for $1.3 million in June.

Jacobsen has developed or acquired at least 32 senior living facilities in Oregon, California, Arizona, Wyoming, New Mexico, Texas and Utah. He did not respond to interview requests.

Planning for future growth
Seniors in the Portland area have a changing outlook toward senior-care facilities, Bader said. "They see the benefit - that their lives actually improve when they move into a place where they don't have to deal with a home, or be lonely," she said.

Today's new senior housing projects are much nicer than those built years ago, Stubblefield said.

"They're significantly upgraded from what you would think - the retirement communities of the past," he said.

The Springs Living has 15 projects built or under construction, mostly in Oregon, with four facilities in Montana. Stubblefield opened his first facility, The Woods at Willow Creek, in Salem in 1998. He still owns it.

"We build, manage and own long term," he said. "We're not a merchant builder or developer."

Stubblefield also is building a 172-unit facility in Bozeman, Mont.

"We're going through a growth phase that's all kind of happening at once," he said.

Senior care varies from country club-like settings for active and healthy seniors to skilled nursing facilities for seniors who require 24-hour care. A 2014 study by Oregon State University for the state Department of Human Services provided insight into the nursing facility market. In 2014, Oregon had 138 nursing facilities, including 34 in Multnomah County. The state had slightly more than 12,000 licensed beds for skilled senior care.

Stubblefield said he's watched apartment builders get into the market and hand off a finished senior-living facility to a separate management company, a model he dislikes.

"Senior housing is not an apartment," he said. "It's more like a restaurant. It's a service business. That's the whole key to making it work."

Developers are slowly and steadily meeting the demand for senior living facilities, Stubblefield said.

"Obviously, we wouldn't be building if we didn't think there's demand," he said.

He said senior developments create their own demand.

"If you don't build a community people want to live in, they won't move," he said. "They'll stay in their homes."

For now, senior living is focused on the so-called Silent Generation, those born before the baby boomers.

"Baby boomers are not our market probably for another 15 years," Stubblefield said.

One challenge for the industry is Oregon's rising minimum wage, he said. The industry employs many low-wage workers, particularly in food service.

Senior facilities will end up charging higher rents to make up the difference, Stubblefield said.

"It has a major impact on the cost structure," he said.