In a 2020 study by the National Investment Center for Seniors Housing and Care (NIC) on The Forgotten Middle, 54 percent of seniors cannot afford today’s senior housing and by 2029, 14 million seniors will fall into this category. The NIC expects this number to increase and noted the challenge is to create a housing and care model for the future that is affordable.
United Church Homes (UCH), which has long offered both senior living and affordable housing options, recognized a gap in services and responded by expanding into this market with the missing service offering – a product for middle-income older adults.
This response led to the acquisitions of The Brunswick Community, The Niles Community and The Polaris Community. Senior Vice President and Chief Growth Officer, Terry Spitznagel said by acquiring middle market properties, UCH is able to grow its total housing units quickly and transition them into the UCH family, with consistent services, in just a few months.
“Middle income options for older adults are critical to our mission. We believe we can quickly make an impact for more older adults by acquiring existing rental properties that offer amenities popular with this segment,” said Spitznagel.
Nate Bollinger, Director of Asset Development, said UCH identifies potential properties through existing relationships and performs a thorough market study to ensure there is a need in a local area for middle market housing. Based on the results, Bollinger said UCH makes a decision considering several factors. “It really boils down to is this a good fit for UCH geographically, financially and does it help expand our mission,” said Bollinger, who has more than 30 projects he is evaluating in the acquisition and development pipeline.
All of this growth requires capital, with recent acquisitions made possible by a new UCH Fund for Growth which originated from an unexpected, unrestricted, life-estate donation of $17.5 million. Gloria Hurwitz, Vice President for Advancement, said the fund was structured in a way to allow donors, who wanted to remain anonymous, to play a role in strategically directing their gift to projects that grow the organization and advance its mission into the next century of service.
It’s also a fitting way to demonstrate the impact their generosity has on the individuals we serve today and tomorrow,” said Hurwitz.
“The Fund for Growth has been instrumental in our ability to acquire middle market communities,” said Spitznagel, “These communities do not qualify for funding opportunities such as low-income housing tax credits or other HUD programs, making access to other capital essential as UCH competes for these deals.”
Spitznagel said the most recent acquisition, The Polaris Community would not have been possible without the Fund for Growth. The Fund is additionally focused on growing service coordination and personal care services (UCH Cares) for individuals who prefer to live in their own homes but need more services as they age, and Bollinger said he believes providing as-needed care to residents through these channels is vital for future growth.
“As responsible stewards of our resources, we will invest and leverage these funds, so they continue to grow even as we immediately put them to work for those we serve,” said Spitznagel.
“We are looking to grow, innovate and provide services in new and different ways,” said Spitznagel.
The pandemic has disrupted the industry and forced UCH leadership to move more quickly into strategic areas of innovation. “Serving more residents in long-term care communities will look different over the next decade,” said Spitznagel, “Growth not only means more units and services, but also learning new ways of providing care and support by leveraging technology and investing in new ideas.”
“Our eyes are open to opportunities that exist in senior services in a post-pandemic world,” said Spitznagel. She said UCH is looking to re-engineer long-term care communities to promote all private rooms and improved infection control strategies. UCH is also designing new independent living communities that embrace nature and natural lighting, to provide residents with joy and social connection.
Spitznagel said UCH’s growth will support the value propositions it believes will offer older adults the abundant aging experience they are seeking.
During a pandemic, UCH was successful in adding 938 units to its portfolio. This growth consisted of three middle-market communities, in-house service coordination, UCH Cares personal care program and two additional hospice locations in Ohio. UCH Management added two partner communities in Tennessee and in Ohio, which added more than 300 units to the total.
“Our goal is to not only grow, but to ensure an exceptional customer experience,” said Spitznagel.