I will turn 70 next month. I have been semi-retired for five years and fully retired from my last full-time employer for three years. I find a number of my close friends, who elected to keep working after age 65, are now shifting to full or partial retirement at age 70 and I thought I would share with readers of this blog some of the advice I have been informally providing to friends.
For high achieving Baby Boomers with well established careers, it is scary to think of giving up a career in which you are still investing more than 40 hours per week, which provides status and professional recognition, and which is the nexus for many of your social relationships. A number of my friends are very concerned about how they will fill their time post-retirement.
I was fortunate in being able to cut back with my full-time employer, from working 50+ hours per week as a stock analyst covering seniors housing and care stocks and healthcare REITs to working 20 hours per week in investment banking focusing on business development and providing input on industry trends and corporate strategy for M&A transactions and capital raises. This step-down in time, together with a shift in my responsibilities, kept me productively engaged while allowing me to ease into retirement. I believe employers today are more open to these types of arrangements but, based on feedback from friends, this seems to work less well for law firms and other employers that bill by the hour.
When I ceased working as an investment banker part-time for my long-time employer – Stifel Nicolaus, it was my choice to end the relationship. I was spurred to retire by my older brother’s death, which increased my desire to enjoy more of life while I was still healthy. However, I still wanted to remain professionally engaged post-retirement, so I set up Robust Retirement, LLC as a vehicle though which I could provide consulting services with a liability shield and set up this blog to allow me a platform from which to comment on industry issues. Setting up and maintaining an LLC and a web blog is not very difficult. In the years since I fully retired, I have done a number of consulting assignments through my LLC and served on the Board of Directors at the publicly traded healthcare REIT – Quality Care Properties.
My advice to pending retirees or those contemplating retirement.
Don’t do too much pre-planning of your time in retirement or make a lot of commitments.
Take some time to clear your head and reflect on what’s really important to you.
Observe and talk with friends and neighbors about how they transitioned to retirement and what they like and dislike.
Dabble – take some courses, try some organizations and see what you like before you commit.
Avoid getting over committed to too many volunteer organizations or projects. It’s okay to say no – my own rule is no more than one board or major volunteer assignment at a time.
Free, unstructured time is okay.
Commit to an exercise regime. Vigorous exercise is one of the few things that can extend your good health. My current program includes boxing/intensive cardio twice a week, yoga and tai chi each once a week, weight training once or twice a week and golf once or twice a week now that the weather is turning warm.
Consider a move to a condo before or shortly after you retire unless you really enjoy yard work. My wife and I moved to a high rise condo with a doorman and valet parking. One story living with someone to help with deliveries will allow us to stay in our current home for many more years and, if you are looking for more than two bedrooms in a well-located condo, these can be relatively hard to find.
Stay connected with professional colleagues – I belong to one professional association with a local chapter that keeps me connected and make a point of connecting to former colleagues for lunch or drinks from time to time.
Notice some things not included in the above list – buying a second home, relocating to a warming climate or lower tax state. These reflect my personal preferences. I don’t want the added work of maintaining two homes and prefer to remain in a location where we are closer to family and long-time friends.
We do travel a lot but that is not for everyone. This past winter, we traveled a week a month to someplace warm (Hilton Head, SC and the Caribbean) and over the last several years have traveled to Scandinavia, Israel, Northern Italy, Costa Rica, the Galapagos and more. A planned Spring trip to Japan was just cancelled by our tour operator but eventually the virus will pass and we will be on the road again.
My wife and I traveled to Scandinavia in late August 2019. The trip combined visits to Copenhagen, Oslo, Bergen and Norwegian fjords. We flew direct from Washington, Dulles to Copenhagen, where we spend five days. We took an overnight ferry from Copenhagen to Oslo, where we spent four days. We used trains and ferries to visit Sognefjord and Naeroyfjord, spending one night in Flam and one night in Balestrand. We then took a ferry from Balestrand to Bergen, where we spent one day and two nights before connecting with a flight in Copenhagen back to DC.
We were very impressed with Scandinavia. Clean, well planned cities with less income stratification and homelessness than you find in the U.S. The fjords are very picturesque and easy to visit with the Norway in a Nutshell route. Temperatures ranged from the mid-50s to low 70s, with very little rain, less than typical for late summer. It was already past the solstice but it was still light until after 9 pm in late August.
Like a number of our recent trips, we had our travel agent work with a local tour company to plan a trip just for us, with tour guides and outings scheduled throughout the trip but also free time for us to do as we liked on our own schedule. We stayed at very good hotels and enjoyed some excellent meals.
Copenhagen is a city of 600,000, where a third of the residents reportedly bike to work. Flat terrain, abundant dedicated bike lanes and bikes everywhere make that figure believable. The city is located on a body of water connecting the North and Baltic Seas, covers several islands and has a number of canals. It is connected to Sweden by a bridge/tunnel and, together with Malmo, Sweden across the bridge, is part of the largest metropolitan region in Scandinavia – the Oresund.
We arrived in Copenhagen on Monday morning, August 19, 2019 and had a boat tour of the city on our first day, which is an easy and pleasant way to get an overview of the City. A number of castles and important institutions, such as the opera house and national theatre, are located on the water.
On our first full day in Copenhagen we took a guided walking tour that brought us to a number of historic sites. Our hotel, the Skt Petri (Saint Peter) was centrally located in the historic core of Copenhagen, convenient to pedestrian shopping streets, a transit hub and many historic sites.
On our second full day in Denmark we met a guide/driver to take us to the Fredensborg Castle, the largest Renaissance residence in Scandinavia when it was built, and the Louisiana Art Museum, which are both located north of Copenhagen. Fredensborg is impressive, despite having been sacked on at least one occasion, and has very attractive grounds. The private Louisiana Museum has a great setting overlooking the straight to Sweden and a large permanent collection and interesting temporary exhibits of modern art.
For our remaining time in Copenhagen we were on our own, equipped by our tour company with the Copenhagen Card that provides free train and transit travel and free admission to most attractions. Over our remaining three days we visited the Great Synagogue, the Jewish Museum designed by Daniel Lebeskind, took a day trip to Roskilde to see the Viking Ship Museum and Roskilde Cathedral, and explored the city, its parks and museums.
We enjoyed both the upscale and everyday food scene in Copenhagen with some of our favorites being Restaurant Barr by the famous Noma operators, Kodbyens Fiskebar in the now trendy meatpacking district and the modest Cafe Halvvejen located near our hotel.
We were unable to book one of the large staterooms on the overnight DFDS ferry from Copenhagen to Oslo but our cabin had two lower berths with a window and we managed to fit in us and our luggage. Our Oslo city tour guide met us at the pier, helped us get a cab to our hotel and waited while we checked in and freshened up before beginning our tour. Because we arrived in Oslo Sunday morning, the city was quiet and some attractions were closed. Rather than take us to some of the major museums and tourist sites, our guide showed us parts of the city we might not have seen on our own including the increasingly trendy Gruner Lokka neighborhood. She also showed us a nice sweater shop, one of the few stores open Sunday.
Our hotel in Oslo was the Continental, was very nice and in a great location near City Hall, the National Theatre, Royal Palace, a major transit up and Aker Brygge, a portion of the harbor with many restaurants and tour boat docks. The tour company provided us with an Oslo pass providing free transit access and admission to many museums and tourist sites. We also discovered that the Apple Maps App connects to the City’s transit system and provides information on which bus, tram and metro routes to take to reach specific locations including arrival times for metro trains and trams. This makes using the transit system in Oslo a breeze.
We planned our touring in Oslo around museum schedules, since some are closed on Monday. We visited the Holocaust Center and Norwegian Folk Museum, Munch Museum, Botanical Garden and City Hall, Vigeland Park and Museum and explored parts of downtown and the waterfront. Oslo is hillier than Copenhagen so using transit is easier than walking or biking.
Out tour guide directed us to some traditional Norwegian restaurants in Oslo. The Stortorvets Gjaestgiveri near the Catholic Cathedral had good food and is in an historic building with an interior courtyard.
Norway in Nutshell is a group of rail and ferry connections that allow visits to Sognefjord and other fjords ranging from a day trip to multi-day stays out of Bergen or Oslo. We opted for a train from Oslo to Myrdal for a connection to the Flamsbana train that descends steeply into the Sognefjord at Flam, a private boat tour of Sognefjord and Naeroyfjord out of Flam, a ferry from Flam to Balestrand and a ferry from Balestrand to Bergen. We stayed one night in Flam at the Fretheim Hotel and one night in Balestrand at the Kviknes Hotel. This allowed us time for a more extensive exploration of the fjords via our boat tour and multiple ferry trips and a chance to explore both Flam and Balestrand to get a feel for village life on the fjords. The Fretheim and Kviknes are both interesting old hotels but truthfully there is little to see or do in Flam and Balestrand other than look at the fjord.
Bergen has less than half the population of Copenhagen and Oslo and is located on steep slopes on a North Sea fjord with water on three sides. It has been an important trading center since the 15th century when it was part of the Germanic Hanseatic League and has some remaining buildings dating from this period. Due to its location near the north sea and the surrounding mountains it gets the most rain of any city we visited on we experienced everything from heavy showers to bright sunshine during our one full day in the city.
In Bergen we stayed at the Opus XVI hotel, which is in an attractive former bank building close to the harbor. The hotel was redeveloped by the family of composer Edvard Greig.
In June 2019 my wife, son, daughter-in-law and I vacationed for 10 days in Israel. My wife, son and I had last been to Israel 20 years ago and my daughter-in-law had never previously visited. We flew from Washington’s Dulles airport to Israel via Frankfurt and had a direct return flight from Israel to Washington.
As we have done with a number of our recent trips, we used an experienced U.S. based travel agent working with an in-country tour operator, in this case Mabat Platinum Touring Services, Ltd., to develop a customized tour for us. The tour company arranged for our own guide/driver and minivan, arranged hotels, admissions to most sites we visited, some guided tours, and some meals. They provided us with restaurant and touring suggestions for days and times when we were on out own. The tour company also arranged for two people to meet us at our gate on arrival to accompany us through immigration and customs and to get us through check-in to our gate on our departure. This significantly shortened the time and anxiety typically associated with arrivals and departments in foreign countries and is something I would recommend to anyone traveling to Israel.
Our itinerary started in Tel Aviv where we stayed three nights. We arrived in the early evening. We toured the beach near our hotel and had dinner before going to bed early. Our first full day in Israel was on our own, which allowed us to get over jet lag at our own pace. We visited the Nahalet Benjamin Art and Craft Fair and spent the afternoon at our hotel pool and on the beach. On our second full day we were met by our guide to tour Jaffe, the original Neve Zedak neighborhood of Tel Aviv, eat some falafel for lunch and visit the Tel Aviv Museum of Art, which has a very good modern art wing and interesting collection of Israeli art. That evening we dined at a very nice restaurant in the Old Port area of Tel Aviv called the Kitchen Market. Our hotel in Tel Aviv was the Carlton, which is right on the beach, offered large rooms with balconies and very good service. Our room included a large breakfast buffet served at the hotel’s beach club overlooking the water.
On day four we checked out of our hotel in Tel Aviv and went up the coast, visiting the Roman/King Herod era Caesarea, Haifa, Crusader developed Akko and Nazareth before arriving at our hotel in the Galilee, the Pastoral in Kfar Blum Kibbutz. Caesarea has a well-preserved Roman aqueduct, theatre, arena and temples along with the ruins of King Herod’s palace by the sea. It also contains a mosque and remains of later Crusader defensive walls and shops and restaurants serving the tourists.
In Haifa we stopped briefly to see the spectacular Bahai Shrine and Gardens and take in panoramic views of the city from Mt. Carmel.
In Akko we visited the Crusader fortress and tour Arab markets in the city. The Fortress was used as a prison during the British Mandate and was the site of a dramatic jailbreak by the Irgun. Today it serves as a museum and event venue. We had an excellent seafood lunch at El Marsa in Akko, which the Wall Street Journal had recommended.
We combined touring both Jewish and Christian religious site on our trip, visiting the Basilica of the Annunciation in Nazareth. It is a church located over Mary’s home in Nazareth that has been built, destroyed and rebuilt many times. Today’s Basilica is a modern building featuring large murals and art contributed from Christian communities around the world. It has an opening in the where you can descend to see the remains of Mary’s house and pray in front of it. There is reportedly some actual archeological evidence that it is the house where Mary lived.
The Hotel Pastoral in Kfar Blum is a modest hotel with rooms in pods spread across a fairly large property with a central restaurant and reception area. The property is located in northern Israel, close to the Lebanese border and the Golan Heights. Meals served buffet style was plentiful and kosher but nothing to write home about.
The next day we toured the Dan Nature Preserve, which includes the one of the headwaters of the Jordan River and Tel Dan, an extensive and important archeological site once settled by the Jewish tribe of Dan. Much of the Preserve is green and fed from active underground springs with the historical site located on higher, dryer ground with views into Syria. The most important find at the site is the only archeological reference to King David and the House of David. The site also has a temple built by the King of the Northern Kingdom that featured a golden calf and was intended as an alternative to the Temple in Jerusalem.
The following day we toured the Golan Heights, visiting a memorial to defenders who resisted the attacked of nearly 1,500 Syrian tanks long enough for reinforcements to arrive and Mt. Bental Volcano where you can see old fortifications and look into Syria. We also visited the Assaf Family Estate Winery and Kibbutz Ortal where we stopped for lunch. What turned out to be one of the highlights of our trip was dinner in the home of a Druze family in the Golan Heights village of Majdal Shamss. We had an excellent meat and learned about the Druze religion and culture, which is a offshoot of Islam.
On Tuesday, June, 11, 2019 we visit Tzfat or Safed, the center of Jewish mysticism and a community filled with synagogues and yeshivahs along with galleries and artist studios. In Tzfat, like in Jerusalem, you can feel the religious spirit of the place.
Continuing south from Tzfat with had lunch at a Arab schwarma restaurant on the shore of Lake Kinneret (the Sea of Galilee) and visited a historic synagogue in Beit Alfa with a 5th century mosaic floor. In the evening we entered Jerusalem where we stayed at the Mamilla Hotel, which adjoins a large shopping mall of the same name and is close to the Jaffa gate into the Old City. We had dinner at Eucalyptus, which was highly rated but where we found the food so so and the service dreadful.
On out first full day in Jerusalem, we received an overview of the Old City from an overlooked on the Mt. of Olives and toured on foot. It was a long, exhausting but rewarding day. We saw the reported site of the last supper, yeshivahs and synagogues, walked through the Jewish quarter where the old Roman road, the Cardo has been excavated, visit the Western Wall and Western Wall tunnels and walked the Via Dolorosa and toured the Church of the Holy Sepulchre. In the evening we dined a Satya, an excellent restaurant.
The next day we toured new Jerusalem with a docent led tour of the Yad Vashem museum, a visit to the Mehane Yehuda market and the Kennesset. We were impressed by the Moshe Safdie designed museum at Yad Vashem. That evening and a light supper in the Mall, we saw a light and sound show in the King David town in the old city, which was technically impressive but which lacked much of a storyline.
On Friday June 14th we visited Masada and the Dead Sea. Masada, the castle and fortress complex built by King Herod on top of a stone monolith is where 960 Jewish zealots who revolted against the Romans chose to commit suicide rather than be captured after a long siege. The remains of Masada and of the fortifications and siege lines built by the Romans are still visible today.
The Dead Sea, where we covered ourselves with mud the cleanse our skin and floated in the salt-thickened waters on a private beach was fund for all.
On Friday evening we returned to our hotel and said goodbye to our guide, Avi Cohen, who did a great job explaining what we saw and putting it in a historical and geographic context. We dined at Chakra, another excellent restaurant.
We were on our own in our final day in Jerusalem and spent much of it at the Jewish Museum, where we toured the archeological and Jewish collections, had lunch, saw the Dead Sea scrolls and a large model of Jerusalem. We had a light supper at the rooftop lounge in out hotel watching the sun set over the Old City of Jerusalem before heading to the airport for our 12:20 am flight.
On September 18, 2019, news sources reported the sale of the Newbury College Campus in Brookline, Massachusetts to the health care REIT Welltower for redevelopment into a senior housing community. Welltower reportedly acquired the nearly eight acre site containing 8 buildings with approximately 142,000 sq. ft. for $34 million. Welltower’s purchase confirm my view, expressed in a February post, that small college campus have the potential to be successfully converted to seniors housing (see below).
There was an opinion piece in The Wall Street Journal on Friday, February 22 entitled “America’s Disappearing Private Colleges”, written by Allen C. Guelzo, a professor of history at Gettysburg College. The piece documents the closing of Concordia College, a small historically black school in Selma, Alabama. It goes on to assert “The post-Great Recession baby bust will soon mean not enough students to keep small schools alive.”
In the early 1990s I spent more than five years advising colleges and universities on real estate issues. My clients included the University of Maryland, Johns Hopkins and the Hershey Medical Center of Penn State. Even then, future weakness was evident in demand for higher education once the Echo Boomers (children of the baby boomers) passed through their college years. As Mr. Guelzo documents, the decline in the number of future potential college students has worsened since that time because of the Great Recession.
“Birthrates plunged by almost 13% from 2007 to 2012 and the CDC believes fertility could fall further”. The birth dearth means 450,000 fewer college applicants in the 2020s according to economist Nathan Grawe in Demographics and the Demand for Higher Education. Hardest hit will be New York, Pennsylvania, New England and around the Great Lakes, areas most populated by private colleges.
Harvard and other well regarded and well-endowed universities will continue to see high demand and have the resources to make their institutions more affordable and more attractive to U.S and international student. Rice University, my son’s alma mater, for example just announced a 30% increase in applications after the University put in place a more generous and more predictable aid formula and my alma mater, Johns Hopkins University, recently announced a major gift from alum Michael Bloomberg to provide more generous aid for undergraduates.
While the best regarded and best-endowed colleges and universities will continue to do well, Mr. Guelzo documents a number of small colleges closing, “17 in Massachusetts alone in the past six years”, and cites estimates that up to half of all U.S. colleges will close or go bankrupt within the next decade. Moody’s estimates that 15 private colleges will close per year. My experience as a real estate advisor to colleges and universities, and as a student of demographics, lead me to believe these dire predictions.
At the end of his opinion piece, Mr Guelzo identifies four options for leadership of small private colleges (1. Get serious about mergers, 2. Focus recruitment strategies westward where the decline in birthrates was lower, 3. Craft a niche for a particular student, and 4. Establish partnerships with local two-year colleges. ) I doubt any of these options alone will be very effective in combatting the “birth dearth” but see another option that small colleges should definitely consider – converting in whole or in part to seniors housing communities.
I make the connections between private colleges and seniors housing because, after working as a real estate advisor to colleges and universities, I spent 15 as a stock analyst covering senior’s housing and care companies and REITs owning seniors housing and heath care real estate. While the demographics driving potential demand for colleges and universities are dreadful in the 2020s, the demographics driving demand for seniors housing and care are very strong. The first Baby Boomers turn 75 in 2021 and turn 80 in 2026.
Senior housing operators and REITs owning senior housing real estate are currently struggling with some overcapacity pressuring rents and occupancy and higher labor cost pressuring margins. I believe the seniors housing industry was too optimistic about the age at which seniors would move to seniors housing, found capital too easy to get, which prompted some overbuilding, and has been less than fully successful in providing living environments to which seniors want to move. Lower levels of seniors housing construction and the continued aging of the population should gradual and significantly improve demand prospects for seniors housing in the 2020s. I believe converting small colleges in whole or in part to seniors housing has the potential to allow small colleges to survive or provide a softer landing for faculty and staff at colleges that need to close; and can also provide a more desirable housing option for seniors and potentially help with labor costs.
Some of the most successful and most attractive senior housing communities i have observed offer campus-like settings with a wide range of social, cultural, educational and recreational amenities. Erickson Living and Senior Living Communities and a number of large not-for-profit continuing care communities (CCRCs) provide attractive campuses with a high level or amenities. (See links below to ericksonliving.com and senior-living-communities.com). Erickson’s first senior housing community was developed on the site of a former convent with some of the same qualities as a small college campus.
The challenge of developing large CCRCs is that they require very large upfront investments of money and time to be created on a greenfield basis. Small colleges, which have campuses, dormitories, cultural, educational and recreational amenities in place, could potentially be converted to seniors housing campuses at a lower cost than greenfield development while offering name recognition and character from the outset. One other feature seldom seen in senior housing communities, but which appears to significantly increase a community’s appeal to seniors, is a mixed age environment rather than a senior citizen ghetto. My favorite example remains Merrill Gardens at the University (see link below).
Merrill Garden at the University is a community near the University of Washington in Seattle that combines a senior housing community, non-age-restricted apartments and retail on a single site with the apartment building and senior housing community sharing an interior courtyard and the senior housing community’s bars and restaurant open to the public allowing apartment and senior housing residents to mix. Senior housing communities developed on or near other university campuses also have been attractive to seniors and appeal to alumni but I believe there is an opportunity to more fully integrate seniors housing into a college or university campus and create more interaction between seniors, traditional college-age students, faculty and staff than has been done to date. It is this type of integrated seniors housing / college setting development that I see as an attractive 5th option to those Mr. Guezlo identifies to save some of America’s small colleges.
Integrating senior housing into an existing college campus or fully converting a small college campus to seniors housing may also offer labor force benefits because students, existing college staff and potentially even faculty could be employed to providing programming, patient care and building maintenance for seniors housing as well as university buildings and might form a base labor force from which senior housing could draw even if the college is closing. Seniors may also be able to help fill college classes, particularly in the humanities or even serve as adjunct faculty.
The most feasible strategy for a college to evaluate and execute a partial or full conversion to seniors housing is to engaged qualified real estate and financial advisors to evaluate the option and help run a process to select a for-profit or not-for-profit senior housing partner. For some religious-affiliated colleges, the same denomination may also develop and operate seniors housing, which might ease some of the anxiety of teaming with a senior housing partner.
I welcome inquiries from colleges and universities wishing to consider a college to senior housing conversion and may be able to help evaluate such options at a strategic level and assemble a team to help a college or university execute such a conversion. For some insights into the process see the link to an article I co-authored in 1996 entitled “Privatizing University Properties” in the Journal Planning for Higher Education.
My wife and I spent nearly three weeks touring northern Italy in September and early October 2018. As was the case with several of our recent vacations, we used a travel agent working with a in-country tour operator to design a customized tour for the two of us rather than joining a group. The Italian tour operator we worked with was Olive Tree Escapes, which has an office in Chicago.
This was our third trip to Italy and was designed to allow us to see parts of the county we had not visited before, see great art and have some time to relax and immerse ourselves in Italian culture. We visited Venice, Bologna which we used as a base for a number of day trips, Lake Como and Milan. Our day trips from Bologna included Ravenna, Florence, Ferrara and the Emilia Romagna countryside.
We flew direct from Philadelphia to Venice on American Airlines and returned from Venice to Philadelphia on another direct flight. If we had returned from Milan, we would have had to take a connecting flight to reach Philadelphia. For travel between major cities in Italy we used the excellent high speed rail service, the Frecciarossa, that travels up to 185 miles per hour with a much smoother ride than Acela service in the U.S. For shorter day-trips out of Bologna we used slower but still comfortable and efficient regional train service. It is possible to reserve trains and get tickets from the U.S. over the Internet. We used the national rail service, Trenitalia. A private rail company, .Italio, now offers competitive and sometimes lower priced service on some routes and it may be worth checking on this option. Our tour company arranged for transfers to and from the airport and the major inter-city train stations in cities we visited.
There are no cars, buses or taxis in the central parts of Venice. Getting from Venice’s Marco Polo airport to the old city included a car service from the airport terminal to a water taxi and porter, a water taxi ride up the Grand Canal to a dock near our hotel and a walk from the dock to our hotel with our porter. We stayed at the Londra Palace located on the waterfront promenade facing the Canale di San Marco, a few blocks from Piazza San Marco, the center of Venice. This is an ideal location, close to the main tourist sites with canal views and vaparetto (Venice’s water bus) docks located just across from the front of the hotel. Even though we booked well in advance we were unable to get a deluxe room with a canal view but our room was comfortable, big enough for two and well appointed. Our room came with complementary breakfast served on the first floor with the option of eating outside facing the canal. Service at the Londra Palace was excellent and we would definitely recommend the hotel.
On the day we arrived in Venice we walked through Piazza San Marco and explored parts of central Venice on foot, visiting Santa Maria Gloriosa dei Frari Church, which feature altarpieces and artwork by Titian, Bellini and Tiziano. Our first full day in the city we toured the Basilica San Marco and the Doge’s Palace, for which a guide that can help you avoid the long lines is a worthwhile investment. Other highlights of our visit to Venice included a guided tour of the Peggy Guggenheim Collection of modern art, touring the Academia museum, a visit to the Jewish ghetto where we toured several synagogues and visiting a European Crafts Fair at San Giorgio Maggiore. Our tour company arranged a gondola ride for us one evening in Venice, which was very short and a bit of a disappointment. If I was doing it again, I would find and negotiate my own gondola ride. We ate well in Venice but favored small, local restaurants recommended by our guides or hotel. We did splurge on aperitifs at the Caffe Florian on Piazza San Marco.
We picked Bologna, which is much less of a tourist destination than Venice, Florence or Milan more for its location as a base from which to explore Ravenna and Florence than for any other reason. But we found Bologna to be a delightful city featuring great food, the oldest university in Europe, attractive streets with covered arcades and good shopping options. We stayed for a week in an apartment in Bologna located mid-way between the train station and the main square just off Via dell’ Indipendenza. We took a walking food tour in Bologna with stops at a chocolate shop, charcuterie, pasta restaurant, bakery and gelateria, which were all great. We also did a food tour of the Emiglia Romagna countryside to see Parmigiano Reggiano, Balsamic Vinegar and Parma Ham being made, with a stop for lunch at a vineyard restaurant. When planning the trip we thought two food tours were excessive but we very much enjoyed them both. We also explored the center of Bologna including historic buildings of the University of Bologna, founded in 1088.
One of the nice things about staying in an apartment versus a hotel, in addition to having a washer and dryer, is the ability to have meals on your own. The owner of the apartment we rented directed us to groceries and salumerias. We ate simple breakfasts of yogurt and coffee and had two dinners in, one of fresh pasta with pesto and salad and one of cheese, charcuterie and bread with olive oil and balsamic vinegar.
We took a day trip from Bologna to Florence, only 35 minutes by train, to visit the Uffizi Gallery, the Bargello and Pitti Palace. We had spent time in Florence on a previous trip to Italy, so it was an easy choice for us to focus on the art rather than exploring the City. It is essential to make reservations in advance to tour the Uffizi and the Pitti Palace and at the Uffizi you will still wait in a long line to enter near when your timed-ticket indicates. The Uffizi is one of the world’s great museums and it is well worth putting up with the large crowds to see its collection. In Florence, we had cappuccino and breakfast at an outdoor cafe, a nice lunch in wine bar overlooking the Arno River but ended up having dinner in the train station because our train back to Bologna was 90 minutes late. Due to a problem with the tracks north of Rome, all of the trains running south to north were delayed.
Ravenna dates to the 2nd century BC, when the Romans colonized the Po River Valley. It served as a major port and naval station for Caesar Augustus, was the capital of the western Roman empire and the capital for barbarian kings Odoacer and Theodoric. The magnificent mosaics found in Ravenna today combine Byzantine, Arian and Roman Christian influences.
Ravenna is a flat, compact and very walkable city and we toured the city and a number of its churches with a private guide. It was a highlight of our trip and a place you could spend more than a day. Ravenna was a high priority for my wife, who is an art museum docent, but both of us really enjoyed the mosaics and the city.
Ferrara is only 20 – 30 minutes from Bologna by trains and was recommended to us as a pleasant city with a strong Jewish heritage. The city seemed pleasant enough and has a very interesting castle but all of the Jewish sites were closed for renovation when we visited and we we were a bit disappointed. We did not have a guide in Ferrara, which may have also caused us to miss some things.
Lake Como is simply gorgeous. We stayed in Varenna on the eastern shore of the lake, which is only a little more than an hour’s very scenic drive from Milan’s central station. We chose Varenna because Rick Steves recommends it as a base and were very pleased with our choice. We stayed at the delightful Villa Cipressi hotel, which is right on the lake, features it own botanical gardens and is only a short walk to the main square.
While on Lake Como, we took our own private boat tour of the Lake that included stops at Bellagio and Villa del Balbianello and cruising past a number of towns and villa’s including George Clooney’s. We also spent a day exploring Varenna and one day lounging on the grounds of our hotel and the Villa Monastero, which is right next door. We had meals at restaurants overlook the main square with its historic churches or overlooking the lake.
We really had only one reason to visit Milan – to see Leonardo da Vinci’s Last Supper. This requires advance booking and usually booking with a guided group. Seeing the Last Supper was a great experience but it is a highly regimented and short visit. At your appointed time, your guide gives you background while you wait on the plaza outside the refectory of the Santa Maria della Grazie Church, where the painting is located. You then enter an anteroom where the humidity is adjusted before you enter the room housing the painting. Each group only gets 15 minutes to view the painting and for this year preparatory sketches for the Last Supper from the collection of the British Royal Family. While the Last Supper began deteriorating from almost the moment it was completed because of the technique da Vinci chose to use, has suffered through bad and good restoration and has very muted colors today, it is still a painting of immense power and a masterful work of art.
While our focus in Milan was the Last Supper, we spent a day and a half and two nights in the City. Our hotel, the Sina Hotel de la Ville, was nondescript but pleasant and well-located. While in Milan we visited the La Scala opera house and museum on our own and did some shopping in and around the Galleria Vittorio Emanuele II shopping arcade, a 19th century high-end mall that remind us of GUM in Moscow. We also took a guided tour of Milan’s Duomo, which is a grand while lace-like Italian Gothic Cathedral.
We also ate two very good meals in Milan, one in the restaurant hotel and one in a restaurant called Restaurante Da Bruno, which is located in a brutalist Fascist-era building a couple of blocks off the main Piazza del Duomo. The waiter did not speak English so he brought out a large basket of freshly harvested porcini mushrooms to convey his recommendation and the pasta with mushrooms were great.
Like most issues about which I post, the topic of “Finding A Good Death” arose from a personal connection. In this case when a neighbor consulted me about his sister who was being referred to hospice care after battling cancer. While not an expert in hospice care, I have long studied seniors housing and care and, for a time, I followed the publicly traded hospice companies as a stock analyst. I also have some personal experience with hospice care. My older brother (only four years my senior) utilized hospice care before his death in late 2014 from a degenerative neurological condition. To supplement my own knowledge for this blog post, I interviewed a friend and neighbor who is a long-time bereavement counselor volunteer at a large not-for-profit hospice in Baltimore and researched the topic on line.
John McCain’s death, which appeared to come quickly surrounded by friends and family after the Senator elected hospice care, also makes the subject of Finding A Good Death very relevant.
Even though we all die eventually, talking about death and planning for death, beyond making funeral arrangements, are taboo subjects for most Americans. We are culturally geared to want to live as long as possible and most physicians and patients have a strong bias toward utilizing the most expensive, invasive and technologically advanced medical procedures to prolong life, viewing death as failure rather than an inevitable part of the life cycle.
According to data from the Social Security Administration:
A man age 65 today can expect to live, on average, until age 84.3.
A woman age 65 today can expect to live, on average, until age 86.7.
About one out of every four 65-year-olds today will live past age 90, one out of 10 will live past age 95; and longevity estimates for 65 year olds continue to rise. Also, these statistics are averages for the entire population, so healthy non-smokers and those with better health plans and medical care should expect to live longer. Once you reach 65, I would argue you already have a very good chance of living a long life and you and your family should be more concerned with the quality rather than quantity of the remaining life you lead, and with the quality of your death, the focus of this post.
A good death is generally understood to be one that comes quickly and peacefully and with minimal pain and suffering, ideally at home and with an opportunity for loved ones to say their goodbyes.
English physician Dame Cicely Saunders first applied the term “hospice” to specialized care for dying patients in the UK in 1948. Hospice care was introduced to the U.S, in the mid-60s and did not become a Medicare eligible benefit until 1982. History of hospice care
As defined by Medicare, hospice is a program of care and support for people who are terminally ill (with a life expectancy of 6 months or less if the illness runs its normal course) and their families. Hospice helps people who are terminally ill live comfortably.
The focus is on comfort (palliative care), not on curing an illness.
A specially trained team of professionals and caregivers provide care for the “whole person,” including physical, emotional, social, and spiritual needs.
Services typically include physical care, counseling, medications for relief of pain and suffering, medical equipment, and supplies for the terminal illness and related conditions. Things like diapers are not covered by Medicare although catheters are. Patients and their families should not expect 24/7 physical care from hospice unless the patient is receiving inpatient care. Home health aides can be provided for bathing, etc. but cannot provide total care.
Care is generally given in the home.
Family caregivers can get support.
In order to qualify for Medicare’s hospice benefit, you must participate in Medicare Part A and
Your hospice doctor and your regular doctor (if you have one) certify that you’re terminally ill (you’re expected to live 6 months or less).
You accept palliative care (for comfort) instead of care to cure your illness.
You sign a statement choosing hospice care instead of other Medicare-covered treatments for your terminal illness and related conditions.
Medicare will cover the cost of a one-time hospice consultation even if you decide not to elect hospice care. Once you elect hospice care, the first step in the process is development of an individualized care plan. Original Medicare will cover everything you need related to your terminal illness, but the care you get must be from a Medicare-approved hospice provider.
Hospice care is usually given in your home, but it also may be covered in a senior housing community, a nursing home or a specialized hospice inpatient facility. Depending on your terminal illness and related conditions, the plan of care your hospice team creates can include any or all of these services:
Medical equipment (like wheelchairs or walkers)
Medical supplies (like bandages and catheters)
Hospice aide and limited homemaker services. At Gilchrist, a large not-for-profit Baltimore area hospice, a volunteer may do light housekeeping but that is all
Physical and occupational therapy
Speech-language pathology services
Social worker services
Grief and loss counseling for you and your family
Short-term inpatient care (for pain and symptom management)
Short-term respite care
Any other Medicare-covered services needed to manage your terminal illness and related conditions, as recommended by your hospice team.
Note that the above list does not include the cost of room and board in a seniors housing or skilled nursing facility, so the patient or their family may have to cover this cost if routine hospice care cannot be provided at home.
If your usual caregiver (a family member or other caregiver) needs rest, a hospice patient can get inpatient respite care in a Medicare-approved facility (such as a hospice inpatient facility, hospital, or nursing home). Your hospice provider will arrange this for you. You can stay up to 5 days each time you get respite care. You can get respite care more than once, but only on an occasional basis.
Medicare pays the hospice provider for your hospice care. There’s no deductible. You’ll pay:
Your monthly Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) premiums.
A copayment of up to $5 per prescription for outpatient prescription drugs for pain and symptom management.
5% of the Medicare-approved amount for inpatient respite care if used.
Medicare won’t cover any of these once your hospice benefit starts:
Treatment intended to cure your terminal illness and/or related conditions. Talk with your doctor if you’re thinking about getting treatment to cure your illness. You always have the right to stop hospice care at any time.
Prescription drugs (except for symptom control or pain relief).
Care from any provider that wasn’t set up by the hospice medical team. You must get hospice care from the hospice provider you chose. All care that you get for your terminal illness and related conditions must be given by or arranged by the hospice team. You can’t get the same type of hospice care from a different hospice, unless you change your hospice provider. However, you can still see your regular doctor or nurse practitioner if you’ve chosen him or her to be the attending medical professional who helps supervise your hospice care.
Room and board. Medicare doesn’t cover room and board. However, if the hospice team determines that you need short-term inpatient or respite care services that they arrange, Medicare will cover your stay in the facility. You may have to pay a small copayment for the respite stay.
Care you get as a hospital outpatient (such as in an emergency room), care you get as a hospital inpatient, or ambulance transportation, unless it’s either arranged by your hospice team or is unrelated to your terminal illness and related condition.
The Medicare hospice benefit is paid by original fee-for-service Medicare. To understand how the hospice benefit relates to Medicare Advantage plan, Part B or D coverage speak with Medicare or your hospice provider and you might consult the publication Medicare Hospice Benefits – Medicare Hospice Benefits
A Popular Benefit
Hospice care enjoys wide support from patients and patient advocates who are supportive of patients dying with dignity and having control over the final chapter of their lives. It is supported by policy makers who believe hospice can save Medicare funds by having terminally ill patients avoid expensive procedures at the end of life that often provide little lasting benefit. Mean medical spending during the last 12 months of life is reaching $80,000 in the U.S., with 44.2% spending for hospital care (57.6% is hospital spending during the final three months of life). To the extent hospice care can reduce expensive end of life hospital care it has the potential to reduce growth in Medicare spending. Hospice Impact On Medical Spending
Hospice care is also viewed favorably by investors and for-profit healthcare companies who see it offering stable reimbursement, attractive margins and very attractive growth prospects as Baby Boomers age. Because hospice reimbursement is designed to adequately fund small not-for-profit hospice providers, not-for-profit and for-profit operators with scale can generate an excess revenue/profits from spreading their overhead costs over a large number of patients, thereby generating reasonable margins from hospice reimbursement.
Electing Hospice Care
The key issue for patients and their families in electing hospice care is that doing so requires you to forgo additional curative treatment for the condition that is expected to lead to your death in order to receive funding for palliative care designed to give you a dignified death with minimal pain and suffering. As noted above, In order to qualify for hospice care a physician, typically your primary care doctor or a hospice doctor, certifies that you are expected to live no more than six months if your disease follows its typical progression. With this physician’s certification and your election to shift from curative to hospice/palliative care you will qualify for Medicare hospice benefits or hospice benefits from a private insurer. If you live more than six months in hospice care, the hospice benefit can be extended but Medicare manages this by penalizing operators that have average length of stays in hospice care.
Selecting A Hospice Provider
According to the National Hospice and Palliative Care Organization (NHPCO) Medicare paid about 4,200 different hospice providers for services in 2015. About 60% of these hospice providers were profit-making companies and 40% are not-for-profit (Long-Term Care Providers and Services Users in the United States: Data From the National Study of Long-Term Care Providers, 2013–2014 Department of Health and Human Services, Centers for Disease Control, Center for Health Statistics, February 2016 – CDC Report On Hospice Services
Hospice providers served approximately 1.3 million patients in 2013 with an average length of stay of 23 days – indicating an average daily census of about 14 patients per hospice.
The statistics above suggest two criteria for selecting a hospice provider 1) for-profit vs. not-for-profit and size. Many hospice providers are small not- for-profit operations. For-profit companies tend to be larger in size, as are some well established not-for-profit organizations, such as Gilchrist Hospice in Baltimore. Smaller operations may offer more personalized care options but larger operations may have their own specially designed dedicated inpatient hospice units and greater resources to Invest in family grief counseling, for example.
Your physician or a social worker/discharge planner at a hospital should be able to recommend or refer you to one or more hospice providers. A simple online search on “finding a hospice provider” results in links to larger for-profit and not-for-profit providers in your area (Heartland, Amedysis and Gilchrist in Baltimore) and links to referral services, such as A Place for Mom, an Internet focused senior housing and care referral company, and the National Hospice and Palliative Care Organization (NHPCO). Keep in mind that referral services will only refer you to organizations that are members of that organization or agree to pay a referral fee.
The Medicare.gov/hospice compare website provides ratings for hospice providers with percentage scores for a number of objective and subjective measures including results from user surveys. The site allows you to search for specific providers and provides near particular zip codes. See Medicare Hospice Compare. Some of this data is likely self-reported but still appears useful for comparing providers.
Before committing to a particular hospice provider a prospective patient and their family should ideally meet with the provider to assess the staff who will oversee and deliver care to your loved one, share information about your family’s situation and discuss options for delivering hospice care in a way that best meets your families needs. Care will most likely be delivered at home with family members engaged in the hospice care delivery process. It can also be provided in a seniors housing or skilled nursing facility but this may require the family to pay for the coast of board. If required, typically right at the end of life when 24/7 oversight is needed, the location of care may be shifted to an inpatient hospice care facility and you should understand when and how such a facility might be used. You may wish to check on the location and quality of the inpatient option.
I welcome comments and questions on this blog and hope it aids you finding a good death for you and your loved ones.
I had lunch yesterday with Robert Kramer, Founder and Strategic Advisor of the National Investment Center for the Seniors Housing and Care Industry (NIC). In the course of our conversation, Bob mentioned that National Development and Epoch Senior Living were proposing to develop 130 units of upscale senior housing on the former headquarters of GE Capital Corporation in Stamford, Connecticut. http://www.courant.com/business/hc-br-plans-former-ge-building-developed-into-senior-living-home-20180815-story.html. This led me to re-post my blog from February 2016 on the opportunity to reuse suburban office locations for seniors housing – see below.
The Wall Street Journal on Tuesday, February 9, 2016 featured an article entitled “Office Glut Strains Suburbs – Landlords, officials at odds over revamping vacant campuses as firms leave for cities”. The article highlights a growing trend of major corporations abandoning leafy suburban headquarter’s campuses for urban locations where transportation options are better and it is easier to attract tech-savvy Millennials. The article focuses on the relocation of Pearson Education from its Upper Saddle River, N.J. site to locations in Manhattan and Hoboken, N.J.
The site Pearson is leaving is a 47 acre site in a wealthy town of about 8,000 people located about 30 miles northwest of Manhattan. It features a “bunkerlike” structure of grey concrete built in 1973 for Western Union with 470,000 sq. ft. of space and few prospects. The suburban couplex is owned by publicly traded Mack-Cali Realty Corp. (CLI). The building previously generated annual revenue of $8.6M but after testing the market, Mack-Cali found no office takers. The company is proposing to replace the former Pearson Education headquarters with 240 apartments, which some in the town oppose because it would change the character of the community and generate expenses for public services while bringing in less taxes than a corporate office property. Other locations noted in the WSJ article with similar former headquarters locations include: the former Bell Labs headquarters in Holmdel, NJ; BASF’s former North American headquarters in Mount Olive, NJ and the former home of Merck & Co. in Readington, NJ.
None of the real estate owners or developers cited by the WSJ were mentioned to be considering a continuing care retirement community (CCRC) as a primary reuse for these corporate office sites or as a principal use in a larger mixed-use complex that might combine office and retail and non-age restricted housing together with a CCRC. Yet, a CCRC would appear to offer a number of benefits. Principally, a CCRC would:
Target the existing older, affluent residents of the wealthy suburbs where these former headquarters are located.
Likely generate more in tax revenue than would be required to service the CCRC because CCRC residents would not have children in public schools.
Generate less in the way of traffic congestion than conventional apartment or condominium development and less than a former corporate headquarters.
Generate spending in the community for existing or to-be-built retail space.
Generate demand for additional healthcare and other services that might be found in the community or incorporated on the site.
Generate greater demand for employment on the site and potentially taxes than would a conventional housing development.
CCRCs typical range in size from about 250 units including a mix of independent living, assisted living, memory care and skilled nursing or healthcare units/beds to as many as 2,000 units/beds in large complexes that have principally been developed by Erickson Living. While there is an emerging trend among seniors housing developers, like office developers, to consider higher density, mixed use urban locations, I believe there is still significant demand for suburban CCRCs, particularly in wealthy, aging, hard to develop locations, like northern New Jersey, where the corporate headquarters sites noted above are located.
CCRC’s are typically developed in either an entrance-fee or rental format. In an entrance-fee format, residents pay an upfront fee that may be partially or fully refundable. This fee is used to repay construction debt and the non-refundable portion is amortized over time to reduce the monthly cost of housing and care. In a rental format, there is no entrance fee, more long-term financing is used and monthly rent must cover the full cost of housing and services. The largest CCRC campuses typically incorporate multiple casual and formal dining venues, pools, gyms, lecture halls, entertainment and recreational amenities and may include full physician practices and their own health plans as well as health centers that provide therapy space.
In 2014, while I was still working in investment banking, I pitched seniors housing as a reuse for some undeveloped or partially developed suburban office locations to a publicly traded suburban office REIT. However, the sites this company had available at the time were not as large or as well located as the corporate headquarters’ sites noted above and were not well suited to CCRC developments of scale. While CCRCs are well outside the comfort zone of most office owners/developers, outright sale of large suburban headquarters sites for this purpose or joint venture development with existing owners of suburban headquarters sites and CCRC developers or healthcare REITs would appear to be a very viable option for such locations, particularly in cases where a CCRC would be an element in a larger mixed use campus that might include some conventional apartments (potentially for staff), retail and office/healthcare uses.
In the second week of July my wife and I spent 5 days on vacation in the Hudson River Valley. It is a place several friends and family members have visited and recommended and it is reachable from our home in Baltimore in a 4 – 5 hour drive. Our primary interest was in visiting Franklin Roosevelt’s home, museum and library in Hyde Park, NY near Poughkeepsie but there are a broad range of attractions and accommodations on both sides of the River between Westchester County north of New York City and Albany.
We found very attractive accommodations on the west side of the river in Milton, NY at the Buttermilk Falls Inn and Spa. The Inn is located on a 75 acre site overlooking the Hudson bisected by a stream with a small waterfall and several ponds with ducks, geese and swans. Accommodations include a main house dating to 1764 with 10 rooms and a number of houses and cottages. Breakfast is included and there is a very nice farm-to-table restaurant on (Henry’s), as well as event space, including a great outdoor wedding venue overlooking the Hudson. A farm and animals provide food for the restaurant and another diversion for guests. There is an exercise room, indoor pool and spa. We stayed in the Sage Right room in the main house, which comes with a queen bed, gas fireplace, refrigerator, patio with views of the Hudson and bath with combination whirlpool tube and shower. The room was attractively furnished with antiques but a bit cluttered with limited closet and drawer space. There was no way to control the air-conditioning temperature in the room and we ended up having to run the gas fireplace to maintain the room temperature as a reasonable level – nothing environmentally conscious in that.
We ate at Henry’s, the on-site farm to table restaurant, our first night and liked it so well that we ended up having light suppers two additional nights during our stay. Both the food and the wait staff at the restaurant were excellent and the menu offers lots of appetizer/small plate options as well as substantial entrees and different white, red and rose sangria nightly. The owners of Buttermilk Falls also own a bakery and cafe, called Frieda’s, a few miles from the Inn on Milton’s main street. It provides the baked goods for the Inn and Henry’s and also offers good breakfast, lunch and take away/picnic options.
We maintained an active but measured pace during our trip, blending visits to historic, natural, and art attractions and the Culinary Institute of America with time at the Inn for afternoon tea, reading and relaxation. We spent more than half a day on our first full day visiting Franklin Roosevelt’s home, Springwood https://www.nps.gov/hofr/index.htm, and the adjoining Presidential Library and Museum https://fdrlibrary.org. The house is large but surprisingly modest and comfortable compared to other Gilded Age mansions. The library and museum, the first Presidential library, were designed by Roosevelt himself and have excellent exhibits chronicling Roosevelt’s life as well as housing his personal study and being a repository for Presidential archives. The museum exhibits are very well designed and many are interactive.
Day two we parked on the western approach to Walkway Over The Hudson and crossed the world’s longest elevated pedestrian bridge spanning 1.28 miles over the Hudson River http://walkway.org/visit/. The bridge is a converted rail span built in the nineteenth century. The walkway is free of charge and provides great views up and down river with the east end landing in Poughkeepsie, which offers some restaurant options. You can enter and exit the walkway at-grade on both sides of the River and there are also elevator and stair options on the Poughkeepsie side but the elevator to the Poughkeepsie waterfront wasn’t working the day we visited. Information panels along the walkway acquaint visitors with the River and the history of the bridge and the area.
Day three we drove south to Storm King Art Center, a 500 acre sculpture park located in Cornwall, NY https://stormking.org/about/. Storm King offers a vast array of monumental and smaller sculpture on an attractive rolling site. We very much enjoyed and were impressed by the art but believe Storm King should offer more tram service options to help visitors get around. A tram circulates through the site but only about once an hour. We walked more than two miles and by no means saw all of the sculpture. More frequent tram circulation and shuttles between parking, dining, and shop/museum locations so you can concentrate your walking to see the art would make Storm King much more accessible to visitors. There is a bike rental option that you may want to try but we did not discover it until we were on our way back to our car. If you visit, be prepared to walk and bring water and sun protections with you.
Day four we returned to Hyde Park to tour Val-Kill https://www.nps.gov/elro/index.htm, Eleanor Roosevelt’s cottage home and we also visited Top Cottage, Franklin’s personal retreat https://www.nps.gov/hofr/planyourvisit/top-cottage.htm. The Roosevelt home, Springwood, Val-Kill and Top Cottage are all administered by the National Park Service. A visitor’s center and the Roosevelt Library and Museum adjoin Springwood but Val-Kill and Top Cottage are located on separate nearby sites. You can drive yourself or take a shuttle bus to Val-KIll from the visitors center but Top Cottage is only reachable by a strenuous 1.5 mile hike from Val-KIll or by shuttle. Val-KIll was acquired by the National Park Service at the time of the bicentennial and is dedicated to Eleanor Roosevelt personal accomplishments, not her role as First Lady. Val-KIll offers attractive grounds, a small gift shop and welcome center, an orientation film about Eleanor’s life and a tour of several rooms in Val-Kill and the adjoining Stone Cottage, which also houses some exhibits. We very much enjoyed our visit to Val-Kill but it’s offerings are much more modest than those of Springwood and the Roosevelt Library and Museum.
Top Cottage was designed by Franklin Roosevelt to be his retreat after completion of his second term and only saw limited use as he went on to serve a third and a portion of a fourth term as President. It has almost no original furnishings and the volunteer docent who we toured with had only limited information to offer on the property. Top Cottage is only open limited hours and should not be a high priority for a visit. We got there by hiking a somewhat steep and rocky trail from Val-Kill but arrived in time to catch a tour and were able to return to Val-KIll on the shuttle.
Two nights during our visit to the Hudson River Valley we dined at restaurants operated on campus by the Culinary Institute of America (CIA). Advanced reservation, best made exactly 30 days in advance, are a must and can be done on OpenTable.com. The CIA operates five restaurants, four of which are open for dinner – American Bounty with a focus on the seasons and products of the Hudson Valley, Bocuse a French restaurant named for the most famous chef in France, Paul Bocuse, Ristorante Caterina de’ Medici and Al Forno Trattoria offering authentic regional Italian cuisine and Post Road Brew House http://www.ciarestaurantgroup.com/new-york-restaurants/. We tried both American Bounty and Bocuse but preferred Bocuse, which is a bit more upscale and where we had a table next to the glass enclosed kitchen. A signature item at Bocuse is lavender ice cream made fresh at your table using liquid nitrogen to deliver hand-churned ice cream in only about five minutes.
There is a lot more to see and do in the Hudson River Valley including wineries, local farms, cute small towns, cruising the river and West Point but we intentionally did not try and squeeze too much in so we had time to relax and enjoy the picturesque setting as well as tour some sites.
I am republishing this blog post, originally issued in December, 2015, because it was recently cited in a podcast by Steve Monroe, Editor of Senior Care Investor, a well regarded industry newsletter, as being prescient about predicting issues being faced by senior housing and care facilities today.
I have been pessimistic about maintaining occupancy and pricing and the risk of overbuilding in private-pay seniors housing. I shared these concerns, along with lessons learned from the last industry downturn, with the NIC Future Leaders Council at the annual conference of the National Investment Center for Seniors Housing and Care (NIC) in early October and will express similar views when I speak at the Senior Living 100 Conference in March.
Since I am more pessimistic about the risk of overbuilding than NIC MAP® Data Service and many industry professionals, I recently reviewed my assessment by examining the most recent census population projections to estimate demand and updated 3Q15 NIC-MAP information on supply. This blog summarizes the results of that review.
NIC MAP Assessment
NIC MAP data indicates a total supply of U.S. institutional quality private-pay seniors housing units (independent living, assisted living and memory care) as 1,404,000 units as of 4Q14. It shows construction as a share of inventory for the top 99 markets as of the 3Q15 of 3.3% of existing majority IL supply and 7.9% of majority AL including memory care. If I apply these same shares to the inventory of seniors housing for the nation (1.404 million units), then I estimate that there may be 72,838 units under construction as of 3Q15.
NIC staff estimates that these 72,838 units will be delivered over a two-year period for average annual construction of approximately 36,400 units. This compares to peak construction levels of approximately 45,000 units in the late 1990s when the last significant overbuilding occurred.
NIC MAP’s statistics on demand and supply focus on two key items, % growth in the supply of private-pay seniors housing and the percent of the 75+ household population, or penetration rate, required to fill anticipated construction. Comparing NIC MAP 4Q14 supply in the top 99 markets to the most recent U.S. Census 2015 population forecast for the entire U.S. 75 + population, NIC-MAP data shows a penetration rate for occupied private-pay seniors housing of 6.25% of the 75+ population in 2015 at a 90.05% occupancy level. The 75+ population is projected to grow at a compound annual rate of 2.9% between 2016 and 2020 while the seniors housing supply is projected to increase by about 2.6% in 2016 if we assume that half of the units NIC MAP estimates are under construction as of 3Q15 are completed in each of the next two years.
The absolute growth in the entire U.S. 75+ population at a 2.9% annual rate is expected be nearly 626,000 annually. At a 6.25% occupied penetration rate, this equates to demand for 39,125 new seniors housing units annually between 2016 and 2020 compared to annual unit growth from new construction according to NIC staff of 36,419 (72,838/2). The market’s ability to absorb projected levels of new construction would appear even better on a net basis if obsolete units being removed from the market were to be deducted from the estimated growth in supply based solely on units under construction. Using NIC MAP estimated supply growth rate (without any assumed demolition) the 75+ occupied penetration rate could actually decrease to 6.1% in 2020 while still keeping private-pay senior housing occupancy at the 90.1% level as of 3Q15 and filling projected development at its current rate to this same level of occupancy.
The key takeaways from this analysis of Census and NIC MAP data are:
Private-pay seniors housing construction levels in the US are elevated compared to recent years but below late 1990s peaks.
Demand is sufficient to accommodate current levels of construction because the 75+ population is growing at 2.9% annually between 2016 and 2020 vs. supply growth of about 2.6%.
Growth in the 75+ population between 2016 and 2020 will produce sufficient absolute growth in demand at a 6.25% penetration rate (39,125 units annually) to absorb projected seniors housing supply growth (36,125 units annually).
With the exception of some select markets, NIC MAP data indicates occupancy can be maintained without an increase, and even with a small decrease, in the 75+ occupied penetration rate of private-pay seniors housing.
Some older obsolete units will be removed from the market, further brightening the prospects for private pay seniors housing compared with estimates of supply growth based solely on units under construction.
Many industry leaders report little evidence of overbuilding in their markets.
Why I Am Concerned
I don’t dispute the NIC-MAP data factually or the view of many industry leaders but I believe they overlook three key items: (1) the increasing age of entry of new residents into private-pay seniors housing, (2) near-term growth in the senior population is concentrated in the “younger” 75 – 79 age group and (3) high turnover means newly constructed seniors housing is very competitive with the existing supply. These are the items that make me pessimistic about the near-term performance of private-pay seniors housing.
Increasing Age Of Entry – Different studies report different numbers for average age of senior housing residents and average entry age, but it is fair to say that in 2008/09 studies the average age of residents ranged from 82 in majority IL properties to 84 in majority AL properties and has moved higher. Estimated entry ages for IL and AL are now closer to the mid-80s according to many operators. This is important because much of the growth in the supply of private-pay seniors housing is in AL and Memory Care units that appeal to seniors over age 85, while much of the growth in the 75+ population will occur in the younger end of this age cohort.
Near-Term Growth Concentrated in Seniors Less Than 80 – The chart above shows projected population growth from the most recent projections of the US Census Bureau for the 75-79, 80-84 and 85+ age groups for the periods 2016–2020, 2021–2025 and 2026-2030. Focusing on the 2016–2020 period you can see that growth is highest for the 75-79 age group, while much lower for seniors 80 and above. As a result, when NIC MAP and others use a 75+ penetration rate it may overstate demand for private-pay seniors housing because residents are not moving in on average until 82 – 84 and perhaps 85 or higher for AL.
The chart below further refines population growth for seniors between age 80 and 87 to illustrate how dramatically growth is skewed toward seniors less that 85 between 2016 and 2020.
Near-Term Outlook Looks Worse On 80+ Penetration Rate – If we look at private-pay seniors housing penetration rates for the 80+ rather than 75+, the 4Q14 penetration rate for occupied units is 10.1% at the national level. Annual projected demand between 2016 and 2020 for the entire 80+ population at this penetration rate is only 23,123 units, compared to current construction levels of 36,400 units per year and the 80+ penetration rate would have to rise to 10.8% in order to maintain senior housing occupancy and accommodate unit growth at current levels to 2020. (This analysis assumes that the rate of construction as a share of inventory exhibited currently for the 99 markets is the same for the non-99 markets as well.) Slow growth in the 80 – 87 age group most likely to move into private-pay seniors housing (particularly in the 85+ age group) and the need for a significant increase in the 80+ penetration rate in order to maintain current occupancy levels raise concern about the industry’s ability to maintain private-pay seniors housing occupancy and rate and accommodate new unit growth near term, even if we assume some reduction in the supply as obsolete units are removed from the market.
Turnover – Data for YE2014 as reported in ASHA’s The State of Seniors Housing 2015 shows turnover rates of 26.2% for majority IL properties and 51.6% for majority AL properties for a weighted average of 36.5%. With a total private-pay seniors housing supply of 1.404 million units and a 90.05% occupancy level, this means that 462,000 units need to be filled annually just to maintain current occupancy. These relatively high rates of turnover, particularly for AL properties, mean that the existing stock of private-pay seniors housing is constantly competing with any newly constructed units and any degree of overbuilding is likely to quickly put pressure on occupancy and pricing in the existing stock, in my view.
When Will Supply Demand Improve – In order to assess when demand/supply conditions for private-pay seniors housing will improve, in the chart below I project growth in the supply of seniors housing into the future assuming the same rate of annual growth in supply seen in 3Q15. This rate of growth (5.24% weighted average) is applied to the supply at the beginning of each five year period and held constant over each five-year period. Once we pass 2020, as the chart indicates, the future of private-pay seniors housing is increasingly bright, with higher demand driven by increased longevity and, after 2026, the long-touted and final arrival of the baby boomers to an age when they might actually consider seniors housing.
However, when you look closely at the above numbers, you see that 80+ demand begins to exceed the growth in supply only slightly in the 2021-2025 and really strong demand from 80+ seniors relative to the level of supply growth does not begin to appear until after 2026, when the Baby Boomers (1946 to 1964) begin turning 80.
Reasons For Near-Term Pessimism – While not every seniors housing market will get overbuilt and many high-barrier-to-entry markets may avoid the adverse impact of additional private-pay seniors housing development, I believe the data above supports my pessimistic view on private-pay seniors housing occupancy, rate and the risk of overbuilding over the next 3 – 5 years. If we keep building at current levels as a percent of supply and we focus on demand from 80+ seniors, it appears that the seniors housing industry will substantially overbuild the market over the next five years. In the period from 2021-2025, the amount by which projected 80+ demand will exceed projected supply growth should be sufficient to help absorb some of the excess supply created in 2016-2020 but may not be high enough to support a significant increase in occupancy or rate or a true senior housing boom. The golden age in terms of demand is really a post-2026 event assuming supply growth continues at today’s rate, the health of baby boomers at 80 is about the same as today’s 80 year olds and boomers will find seniors housing as it is currently being designed and built attractive.
Keys To Success In A More Competitive Environment And Future Arrival Of The Boomers
In order to outperform in the more competitive environment for private-pay seniors housing that I see over the next 3-5 years, I believe operators should:
Limit new development near term
Focus on high barrier to entry markets
Try to reduce turnover
Design/Redesign/Market properties to attract under-80 or early 80s seniors by focusing on IL rather than AL and rethinking locations and amenities to appeal to “younger” seniors
Increase their equity cushion and line up capital in order to be able to bid for more attractively priced acquisitions if occupancy and rates fall and some new product cannot be filled as anticipated
In future blogs, I will discuss some of the cutting edge product that I believe will appeal to Under-80 seniors and look at the housing alternatives to private-pay seniors housing for this age group such as staying in their homes or choosing mixed age condos and apartments, using support services where necessary.
I want to acknowledge the help of my friends at NIC in preparing this blog, even though it takes a more negative view on the near-term outlook for the industry. I particularly want to acknowledge the help of Robert Kramer, Beth Burnham Mace and Chris McGraw. Dave Schless at ASHA also reviewed an early draft and gave me his feedback.
I do not intend to malign NIC MAP data in this blog post. The advent and growth of NIC MAP data is a great tool for the industry and one that should help us avoid the rampant overbuilding seen in private-pay seniors housing in the late 1990s. NIC MAP makes no statement about the appropriateness of the 75 plus penetration rate and demand, per se. NIC MAP adopted the 75 plus household cohort a number of years ago because it has been traditionally been used in the sector by feasibility analysts and others.
I also want to acknowledge two industry reports that cover some of the same material noted here but reach somewhat different conclusions. These are: Beth Mace’s Demographic Update Commentary, circulated by NIC in July, 2015 and Phil Downey’s and Larry Rouvelas’ A Projection of Demand for Market Rate U.S. Seniors Housing 2010 – 2030 published by American Seniors Housing Association Winter 2013.
NIC defines institutional quality private-pay seniors housing as properties with 20 or more units. NIC normally calculates penetration based by comparing the total supply of private-pay seniors housing in the top 99 markets to the total U.S. 75+ household cohort (not the entire household and institutional 75+ population).
In this analysis, I compare the total number of estimated occupied private-pay senior housing units in the U.S. to the total U.S. population of 75 and over and 80 and over seniors. I believe use of a penetration rate based on actual occupancy rather than including vacant units is more accurate but use of either an occupied or total supply penetration rate would produce essentially the same result as indicated above.
While households are the standard unit of demand for housing of all types, NIC, other researchers and I also use population to measure future demand because the Census Bureau does detailed population projections by age but not projections of households. Various commercial data services do project households by age. One other cautionary note when thinking about demand projections for seniors housing is that male longevity has been improving, meaning more very old two person households and potentially less unit demand for private-pay seniors housing than population projections alone may indicate.
There are also some limitations in how I project supply growth. I use NIC MAP construction estimates as of 3Q15 for the top 99 markets, make the assumption that these units will be delivered evenly over two years and that this same rate of growth is occurring in the rest of the country outside the top 99 markets and will continue in the future.
While I believe the assumptions used in this assessment are reasonable and have reviewed them with NIC staff, I believe it would be very helpful for the industry for NIC, ASHA or an independent academic researcher to undertake a demand / supply analysis using household projections by age, seniors housing supply and construction data for just the top 99 markets and include in this an updated survey of the actual entry ages for seniors housing today. Such a study would allow us to better select an aged-based penetration rate at 75, 80 or 85 and would eliminate some of the uncertainty created by mixing population and supply data for the entire U.S. with occupancy and construction stats for the top 99 markets.
My wife and I visited Costa Rica from January 6 – 15, 2018. It is a remarkable country both politically and naturally. A stable democracy surrounded by countries that have gone through political upheaval, dictatorship and civil war, Costa Rica abolished its army in 1948 and put the money into education and healthcare. Only slightly above the equator, with long shorelines along the Caribbean and the Pacific and with diverse typography, Costa has a remarkable diversity of climates, habitats, flora and fauna, with more species of birds in this tiny country than in all of North America. After clearing much of its rainforests for grazing land and agriculture, Costa Rica began to restore it natural environment decades ago and is now a prime location for eco tourism, with much of the country designated as nature preserves.
Costa Rica also offers a very nice lifestyle and very friendly people, almost all of whom speak English. The universal phrase is “Pura Vida”, which means pure life in Spanish but is the way Ticos live. Costa Rica has been named one of the happiest countries in the world, mostly because its inhabitants don’t stress about things the way most foreigners do. Ticos have a very relaxed, simple way of life. The phrase “Pura Vida“ can be used as a response to “How are you?” but also as hello, goodbye and great.
Our goals for the trip were to experience Costa Rica’s diverse ecology and have time for rest and relaxation. We planned the trip through our travel agent, Louise Kemper of Travel Experts, who worked with local tour company, Rico Tours. Based on our travel agent’s advice, we split our roughly 10 day trip between two locations, one near the Arenal Volcano, in the north central part of Costa Rica in the rainforest, and Guanacaste on the Pacific Coast. Average temperatures in January are in mid-70s in the rainforests near Arenal, with almost daily chances for a little rain, and in the mid-80s on the Pacific coast with little chance of rain.
Logistics – We were able to fly from Baltimore-Washington International (BWI) airport directly to San Jose, Costa Rica’s capital, via Southwest and returned from Liberia in the northwest of the country to BWI via Houston, TX on Southwest. Our tour company arranged private drivers and vans to get us from the San Jose airport to our resort new Arenal, Nayara Springs, from Nayara Springs to our second resort on the Pacific Coast, the J.W. Marriott Guanacaste, and from the J.W. to the airport in Liberia. The drive from San Jose to Arenal takes you over the continental divide and through cloud forests and rain forests and is quite a scenic trip.
We considered some in-country air options for the trip from Arenal to the Pacific coast but were glad we elected to use vans because a charter flight crashed in Costa Rica the week before we arrived. Costa Rican roads are a mixed bag but probably better than remembered by visitors who have been there a number of years ago. Most roads are well-paved, well maintained two lane highways and not very crowded outside population centers. We traveled on one stretch of new four-lane divided limited access highway near Liberia and hopefully there is more of this to come. Side roads, however, can be heavily pot holed and partially washed out, making for a slow and very bumpy ride. We were warned about bad roads and the need for motion sickness medicine for the car from others who had visited but only encountered relatively short stretches of really bad roads, and we survived without motion sickness medication. It might be a bit worse if you were traveling on a big bus instead of a private van that is able to maneuver around some of the pot holes.
Nayara Springs Resort – The Nayara Springs Resort is an exclusive boutique hotel with only about 60 individual villas, each featuring a large bedroom, living room, two dressing areas, a large indoor and an outdoor shower and a patio with queen size lounge, hammock and 6 ft x 10 ft private soaking pool fed from a natural hot spring. Daily laundry, twice daily maid service, a private concierge and option of breakfast in room are all included. There are three restaurants, a coffee bar, fitness center with yoga sessions daily and a spa on site, as well as additional restaurants and a wine bar on an adjoining property operated by the same company. The resort offers once daily shuttle service into La Fortuna and now offers its own private tours to nearby attractions. We found the private tours offered by the hotel to be only modestly more expensive than group tours offered by others and Nayara Springs’ tours included a wonderful picnic lunch with wine and beer. Nayara Springs is one of the nicest resorts in which we have ever stayed and the lush grounds and on-site nature trails give you the opportunity to experience Costa Rica’s beauty without even leaving the hotel.
Arenal Volcano – We did two excursions near the Arenal Volcano, one was to the Mistico Hanging Bridges Park and the other to the lava flow from the 1969 eruption. Mistico Hanging Bridges Park offers a hike along well tended mostly-paved trails over a series of fixed and hanging bridges through the rain forest. With an attentive eye and the help of a good guide you can see an amazing diversity of plants and animals in a wonderful environment in the canopy of the rain forest. There are some steep patches on the Hanging Bridges Park trail and you have to be comfortable crossing hanging bridges, some at pretty good heights above the ground, but on the whole the hike is not too rigorous. Much better seeing animals and birds with a private guide, hopefully carrying a spotting scope, than with a group. The lava walk is interesting but with much younger (post 1969 eruption) vegetation, a less scenic natural setting and more strenuous hiking conditions.
There are a number of other areas for touring from hotels in the Arenal volcano area but we choose to avoid those with multi-hour van rides and full day itineraries so we could enjoy some R&R at our hotel. Both our hotel and our tour company, Rico Tours, offered lots of touring options that you can review before you go.
J.W. Marriott Guanacaste – The J.W. Marriott is a much larger property than Nayara Springs with good-size but traditional hotel rooms, five restaurants, an oceanfront bar and a large pool complex and beach. It is located within a large private golf and beach community know as Hacienda Pinillia on the Guanacaste peninsula south of Tamarindo. Both the community and the J.W. Marriott Resort were very nice, but not as nice as the Nayara Springs Resort in terms of accommodations, amenities or service. The large pool complex, with plentiful lounge chairs and pool side drink and food service, is the best feature of the J.W. Marriott. The biggest negative to the J.W. Marriott is that it is somewhat isolated and the road between the highway and Hacienda Pinillia is a couple of miles of potholes. We ate all our meals at the J.W. Marriott. The food was good and there was enough variety among the restaurants for our four night stay. Our room came with a buffet breakfast and our favorite restaurants were the pool and beachside Azul Grill for lunch and the Sabanero Steak House for dinner. Portions were very large and we shared entrees, salads and sandwiches for most meals.
Coast Near Tamarindo – We did two outings to coastal areas near Tamarindo and the J.W. Marriott. One was a boat tour of a mangrove forest along Estero de Playa Grande where it meets Tamarindo Bay and the other on the beach near Parque Nacional Marino Las Baulas. On the mangrove forest tour we saw a crocodile and many different birds and on the beach we saw sea turtles laying their eggs. According to guides the crocodiles do occasionally pick off surfers who chose to swim across the relatively narrow Estero de Playa Grande that separates two beaches on Tamarindo Bay despite warning signs and numerous shuttle boats. Our tours to the coast near Tamarindo were group tours with multiple-hotel pickups in small vans but featured good guides and attentive staff. We arranged these tours through Swiss Travel, which has an office at the J.W. Marriott. The walk to and from the beach at night to see the sea turtles was fairly rigorous and requires you to traverse the beach in total darkness.
Costa Rica As A Retirement Option – On many lists, Costa Rica is ranked among the top overseas locations for Americas looking for an affordable retirement location. While we did not inspect retirement housing options during our vacation in Costa Rica, I can see its appeal, particularly for those living in the West and Southwest for whom it is a relatively short trip. What makes Costa Rica stand out is its stable democracy, good healthcare system and diverse and pleasant climate. Everyone readily accepts dollars and almost everyone speaks English, making it a particularly easy place for Americans to live. Our sense is that U.S. retirees favor the Pacific coast where communities appealing to such people abound.