Economic Times Hitting Assisted Living?
Assisted-living retirement communities need help themselves
[Posted on October 6, 2008 at 3:46 PM]
From the Daily Deal
We keep hearing baby boomers have just started retiring, meaning a big burst in the population of seniors in need of services, such as special housing, is coming.
So then why are so many assisted-living retirement communities of late filing for bankruptcy?
At least three operators of assisted-living retirement communities have filed Chapter 11 in the last three months, mostly blaming the lack of enough residents in their facilities.
Most recently, Waverly Gardens of Memphis LLC filed for Chapter 11 on Oct. 2 in Memphis blaming low occupancy rates. Waverly Gardens operates a 196-unit independent living facility and a 52-unit Alzheimer’s development. Waverly has been struggling with its low occupancy rates, from 45% to 64%, since it acquired the Alzheimer’s facility in 2006.
Appleridge Retirement Community Inc. was unable to sustain an occupancy rate of 50% before 2007. Low occupancy rates combined with a lack of funding caused the operator of a 122-unit senior residential housing facility to file for Chapter 11 on Sept. 29 in Rochester, N.Y.
In August, 10 assisted-living homes operated by nonbankrupt SunWest Management Inc. filed for bankruptcy protection in Nashville. While the debtor didn’t blame low occupancy rates, it filed for Chapter 11 to stop foreclosure proceedings on its homes.
With the economic crisis, the problems within the assisted-living industry could only get worse, too. After all, with their nest eggs having lost a great deal of value in the financial carnage, more senior citizens are likely to work longer and wait to retire. – Jamie Mason