Sunrise Finds Place Amid Crowding of Senior Living Field By SHELLY GARCIA Senior Reporter Growing older may be inevitable, but as it turns out, what folks do about it is not a foregone conclusion. The assisted living industry learned that lesson the hard way in recent years as many operators, unable to fill up their residential communities, closed or consolidated. One local operator, Sunrise Senior Living Inc., is among the few that have survived and prospered. This year, even as the closures continue, Sunrise will open three additional facilities in the San Fernando Valley, bringing the total number of its Valley communities to six and adding to an already substantial coffer of more than 370 assisted living centers in 34 states. Sunrise’s ability to prosper, both the company and outsiders say, can be traced to a niche it has carved within the assisted living industry serving residents who are frail and catering to those with dementia, especially Alzheimer’s Disease. In targeting a specific segment of the aging population, Sunrise joins a handful of companies who are staking out markets as diverse as homes dedicated to Chinese Americans and gays and lesbians. “Those that said we have assisted living therefore you should come to our community, they couldn’t fill up,” said Bob Kramer, president of National Investment Center (NIC) for seniors housing and care industries, a research group in Annapolis. “You had to establish your own niche. You had to convince the market why your particular type of assisted living was the one to move into, either by price, types of service or the types of communities they appeal to.” Assisted living centers first emerged on a large scale in the 1990s to fill a gap between traditional nursing homes and independent communities for active seniors. Unlike the “Father Knows Best” family of the 1950s, family constellations for baby boomers had become far more complex, and the me generation had neither the ability nor the resources to care for an aging parent at home. Typically set up with individual bedroom suites, some with kitchenettes, and common living, dining and recreation areas, assisted living centers were viewed as the answer to a burgeoning need for homes where seniors could get the assistance they needed, be it meal preparation or medications, without the cost of 24/7 skilled nursing care that they did not require. Assisted living centers quickly sprouted throughout the country, fueled by banks and other lenders who saw the chance to invest in a lucrative business opportunity. Too many centers As it turned out, the market did not need quite so many centers, and because these homes are all run on private pay MediCal does not reimburse the cost of an assisted living center many operators, especially those with no experience in providing services to the aging, could not compete. “Particularly in the last year, the national median is stuck at about 85 percent occupancy,” said Kramer. “And at about 85 percent, it’s very difficult for a property to provide any return on equity to the owner or investor. At times, it may only be low interest rates allowing the properties to cover its debt service.” As of last year, the top three providers in the industry Sunrise, along with Alterra Healthcare Corp. in Milwaukee and Emeritus Assisted Living, in Seattle, controlled 58 percent of the total capacity of the industry’s top ten providers, according to data from Assisted Living Federation of America (ALFA), up from 51 percent in 2002. Meanwhile, new center construction has fallen precipitously. In 2002, the last year for which figures are available from NIC, construction starts for assisted living centers were down 37 percent compared to the prior year. And NIC officials say there has been further decline this year. “We’ve seen for the last three years very little new construction with a couple of notable exceptions,” said Kramer, “and one is Sunrise.” Sunrise at the end of May will open Sunrise of Studio City and later in the year will open Sunrise of Woodland Hills and Sunrise of Westlake Village. Its existing facilities, in Northridge, Valencia and West Hills, are for all intents and purposes, at full occupancy, and there is a waiting list for the special Alzheimer’s units the company builds into each of its facilities. Sunrise caters to residents that are frail, unlike many other companies that often shunt those folks off to nursing homes. The average age of its residents is 85. “Sunrise from day one has been committed to caring for the frail resident,” said Dale Boyles, area manager of operations for Sunrise. “Others had to struggle. What they were looking for was the 75-year-old widow who was driving and didn’t need those facilities.” Alzheimer’s units Although the company has always accommodated those with dementia, Sunrise about 10 years ago developed special units within the facility for those with advanced dementia and Alzheimer’s. The Reminiscence Centers, so called because they are stocked with items like typewriters, wedding dresses, baby dolls and plastic tool sets to jog memories, are kept secure so that patients cannot wander out. They also require a more highly trained staff because Alzheimer’s patients can exhibit problems like paranoia resulting from their loss of memory. “As Alzheimer’s progresses, judgement and ability to organize thoughts and routine tasks are compromised,” said Rachelle Dardeau, director of regions for Alzheimer’s Association. “Bathing is a huge issue,” she said. “People may not recognize what a bathtub is for and have the feeling that this is a dangerous situation because it is water.” The Reminiscence Centers accommodate about 20 or 25 residents, about 25 percent of the total population of a Sunrise complex, but officials figure that another 20 percent to 25 percent of the residents who live in the general population also suffer from early stages of dementia and Alzheimer’s. Caring for these patients is more costly, primarily due to the higher cost of staffing, but the market is one that’s also likely to assure Sunrise’s continued success and growth. According to the Alzheimer’s Association, 4.5 million Americans currently suffer from Alzheimer’s, double the number in 1980. And by 2050 the Association projects the number of individuals with Alzheimer’s will grow to anywhere from 11.3 million to 16 million. “We know that Alzheimer’s is really a disease of age,” said Ronda Wilkin, area director of community relations for Sunrise. “Since the population is aging and Alzheimer’s is generally a disease of age, we also know that the numbers are going to skyrocket for folks with Alzheimer’s.”
