MERCER ISLAND – Aegis Living is growing, and fast.
Its most recent senior assisted living community on Mercer Island, marketed as a “resort-like getaway” with 89 housing units, is its 32nd. The Bellevue-based company recently launched a string of new projects valued around $500 million, including buildings in Bellevue, Kirkland, Lake Union and Ballard that are in various stages of development.
“My goal is to make Seattle a retirement mecca for seniors,” said Dwayne Clark, the CEO.
Aegis Living plans on doubling in size within the next 10 years. The 22-year-old company is approaching $3 billion in real estate assets, including new projects.
From its existing developments scattered across the West Coast, Aegis last year generated $209 million in revenue. There are seven new developments on the way, including one in San Rafael, Calif. that will join more than a dozen Aegis Living homes in that state.
“I don’t think many people understand the kind of tectonic shifts that are happening,” said Aegis Living’s president, Kris Engskov. “In 2035, one in 5 people will be in the retirement age.”
“The expectation of how people are going to be taken care of will change dramatically…their expectation is very different,” Engskov said. “We’ve been designing for really a World War II generation. Now the Boomers have arrived.”
Engskov said the industry is gearing up for a generation of clients that’s more technologically advanced and will expect hyper-personalized care. And Aegis is getting ready for a flood of clients by branching out farther into California and Nevada.
Investors have been eyeing the senior housing industry since the Great Recession, when the industry stood relatively untouched, though surrounded by the rubble of a real estate crash.
“It wasn’t recession-proof, but it was recession-resistant because it was a need-driven product,” Robert Kramer, founder of the National Investment Center for Seniors Housing and Care, said. “When it’s a question of Mom needs long term care, that’s not something you could postpone for very long.”
“The adult Boomer daughter said, ‘This I could see mom living in,’” said Kramer. “Rather than feeling wracked with guilt because [she’s] not quitting [her] job to care for Mom.”
Indeed, the Mercer Island property looks more like a hotel than an institution. The 100,000-square-foot building modeled after a Lake Placid ski lodge greets guests with a massive 35-foot waterfall at the entrance. The area is 50% common space, decked out with a movie theater, an old-school Winnebago (“I have no doubt we’re going to see a few romantic encounters there,” Clark said) and a massive red-and-white Chris Craft motorboat. The nostalgic motifs are meant to provide those in the memory care unit with memorable sensory experiences as they lounge in the Winnebago or pretend to steer the motorboat.
Aegis Living Marymoor, near the Burke-Gilman trail and the Sammamish River, was modeled after a bed-and-breakfast inn, according to the company. Aegis Living Madison, in the center of Seattle’s urban core, blend in with the modern skyscrapers of the surrounding apartments.
“[They are] representative of the neighborhood,” Clark said. “This is building a community for the neighborhood and things they value.”
A 2018 survey by the American Association of Retired Persons found that 77% of Americans over the age of 49 would prefer to live in their community for as long as possible. Clark said the intention of Aegis Living’s complexes is to allow residents to age in a familiar sort of place, if not actually at home.
“They like the things that are representative of that neighborhood,” Clark said. “So we want to give them that so that when they move here they feel very much like, ‘I’m in my home.'”
The assisted living industry has long since evolved beyond the model of nursing homes, and now promises premium healthcare and assisted care services along with activities to promote freedom and well-being.
While senior housing companies mostly cater to upper- and upper-middle class families and neighborhoods, said Kramer, “There’s also now beginning to focus on the underserved, forgotten middle people who have too much in resources to qualify for government support but not enough resources to afford most of the private pay options out there today.”
The AARP survey said around 60% of respondents anticipated being able to afford to age in place, leaving a little less than half, scrambling to save money following the recession, looking for other solutions.
But Aegis Living plans on remaining a premium product. Pricing starts at $4,200 a month for the smallest unit, a 311-square-foot studio, which also covers food, transportation and activities.
“We want to be where the average house values are north of $750,000, where the average household income is north of $90,000,” Clark said.
Industrywide, “There are going to be a lot of providers in all different levels of service,” Engskov said.
Aegis Living primarily caters to people already living in higher-income areas who can sell their houses and pay for senior housing in the same area. But despite the amenities it touts, like a wall of wine lockers in the dining area and a wellness center equipped with massage therapy and a beauty parlor, the average stay at Aegis Living’s communities is three years.
“Most people come here too late,” Clark said. “They don’t leave their homes until they have to.”