Dive Brief:
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Developer Hines lodged plans with the New York City Department of Buildings in a bid to kick off construction on a 151-unit, 17-story luxury senior housing facility in Midtown Manhattan, according to Curbed New York.
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The project at 677 Lexington Avenue, designed by SLCE Architects, will include an outdoor plaza, salon, exercise facility, art room and terrace. Many of the project’s apartment units will have outdoor porches.
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Rents could top $20,000 per month, including medical care and food through a partnership with healthcare company Welltower, but will not be covered by insurance. The developers are hoping the city’s growing population of wealthy seniors will stay in the city.
Dive Insight:
Regardless of where well-to-do seniors choose to live out their golden years, the construction of a high-end senior living facility in the heart of New York City comes at a time when the luxury apartment rental market there is slowing due to an oversupply of units.
In December, real estate listing website StreetEasy forecast rent growth in Manhattan and Brooklyn this year to be the slowest of all the city’s boroughs while home prices taper. As a result of that slowdown, developers eyeing the luxury segment are now looking a few notches lower on the value ladder for opportunities.
The senior living category is gearing up for accelerated growth as baby boomers age and look at senior living facilities as one residence option that combines housing and care needs. The number of households age 80 and older is expected to double from 7.8 million in 2015 to 16.2 million in 2035, according to the Joint Center for Housing Studies of Harvard University.
The institutional sector, which includes senior housing facilities like the one Hines is gearing up to build in New York, recorded an estimated $18.7 billion sales in 2015, according to a CBRE report. However, there is some concern about oversupply in this corner of the market, too. The Wall Street Journal reported in August 2015 that the anticipation of the need for senior housing in the coming years could result in excess supply among such facilities.
Meanwhile, the active-adult category is taking off. The National Association of Home Builders' 55+ Housing Market Index booked an eight-point gain in the fourth quarter from the prior quarter. The category is fast broadening to include typologies that range from single-family homes marketed at buyers ages 55 and up to a Jimmy Buffett-themed master-planned community.
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