By the end of the year, New York City will get three posh assisted-living towers offering seniors spa treatments, gourmet meals and chauffeured rides along with their daily care.
The projects were built on a bet that a surging population of wealthy elders would pay hefty sums -- starting around $13,000 a month in Manhattan -- to stay near their grown children, in a vibrant urban center, when they could no longer live alone.
Then Covid-19 upended it all.
The virus, which disproportionately harms the elderly, spread quickly through senior-care facilities across the country. Indoor social events, such as wine tastings and other highlights of assisted living, have become untenable. The adult offspring of potential tenants haven’t yet returned to their Midtown offices and may even have moved to the suburbs. With Broadway shuttered and cultural attractions at minimal capacity, the city’s vigor, and the top rents it helps command, is indefinitely on hold.
“New York really needs to be humming for this to work,” said John Kim, an analyst at BMO Capital Markets who covers Welltower Inc., co-developer of Sunrise at East 56th, set to open in November. “I think it’s going to be very challenging to lease it up.”
Just before the pandemic, assisted-living facilities in Manhattan reached record occupancy of 96%, the result of high demand paired with a 15-year period when not a single new unit was built, according to the National Investment Center for Seniors
Housing & Care
The virus abruptly changed the equation. During the second quarter, when New York was locked down, occupancy fell to 88%, the lowest since 2010. A moratorium on move-ins, in the city and nationwide, meant residents who left, passed away or moved into higher levels of care couldn’t be replaced.
“Certainly, it could take a little longer for the area to absorb that new product along with the decline in occupancy that the pandemic had wrought,” said Lana Peck, a senior principal at the Maryland-based nonprofit.
New York’s luxury senior towers, where residents pay completely out of pocket for perks and modern design rivaling the city’s glitziest condo towers, were a new concept in 2016 when the first two ground-up projects were announced. With sales of high-end apartments slackening, and demographics pointing to a “silver tsunami” of aging boomers, developers sensed a new opportunity.
Human Connection
“Seniors deserve to have options and not have senior living be an afterthought,” said Bevin Littlehale, a New York-based managing director at Hines, Welltower’s partner on the East 56th Street project, which will be operated by Sunrise Senior Living.