Old Buildings, New Challenges: Senior Living Faces a Makeover

Hey everyone, let's talk about something that's quietly becoming a big deal in the senior living world: our aging communities. We're not just talking about the residents, but the very buildings they live in!

It turns out a huge chunk of senior living communities—nearly two-thirds, to be exact—are at least 17 years old. And get this: 45% are a quarter-century old or more as of 2023. That’s according to the National Investment Center for Seniors Housing and Care (NIC), and it's a statistic that's got industry folks scratching their heads.

Operators have known this was coming, but a recent slowdown in new construction has really highlighted the problem. It's been a "development drought," as some call it, meaning fewer brand-new communities are popping up to balance out the older ones.

So, what's happening? Owners and operators are at a crossroads. Do they pour money into renovations and upgrades, or do they pivot and turn these properties into something else entirely? We're talking about conversions to affordable housing, behavioral health facilities, or even regular multifamily apartments.

Also Read: Senior Living Communities: 2025 Guide to Choices & Costs

Take Ventas (NYSE: VTR), for instance. They're looking to sell or convert a massive 14-story, 256-unit property in Chicago's desirable Lakeview neighborhood, currently operated by Brookdale Senior Living (NYSE: BKD). While it might remain senior living, it's a prime example of the tough decisions real estate owners are making as they assess their aging portfolios.

The average senior housing property is 24 years old, and a whopping 60% are at least 17. The older a building, the more likely it's sporting outdated designs, shaky infrastructure, and missing the modern amenities that today's seniors are looking for.

This "obsolescence" is actually making some of the industry's current struggles even worse. Colleen Blumenthal, Chief Operating Officer at HealthTrust, put it plainly to Senior Housing News: “There’s more distressed and obsolete properties now than there used to be, and that’s because some of this first-generation product just isn’t cutting it anymore.”

Omar Zahraoui, a Senior Principal at NIC, predicts that repurposing older communities will become "more increasingly common" as they no longer meet modern demands or are in oversupplied markets.

But Blumenthal also sees this as a "natural stage of evolution." She's not panicking, saying, “This is pretty much first generation stock and it will find another use or be cleared for cornfields. That’s nothing to panic about, because we’ll build it better and more desirable the next time around.”

The Hurdles of a Facelift

You might think, "Why don't they just spruce up the old places?" Well, it's not always that simple. Older properties often come with their own set of challenges that make a refresh difficult.

Think about it: lower ceilings (like 8-footers), communal bathrooms, and a ton of studio apartments. These are big barriers to an outdated property's ability to bounce back in its market, according to Blumenthal. She's seen projects in primary markets with a high mix of studios struggling to get residents.

“When we’re talking obsolete, we’re basically saying there are too many studio units,” Blumenthal said. “People don’t love studios at any price point.”

Also Read: Private Care for Elderly at Home: 2025 U.S. Guide to Costs, Services & Safe Hiring

And it's not just about what residents want. A smaller community with lots of studios might struggle to even attract and pay good staff, even if it's full. Blumenthal points to the struggles of former operator Enlivant and its exposure in rural markets as an example of how an aging portfolio can really mess with an operator's ability to keep up.

“You’re barely going to be able to pay for the staff you need to run the building. So I think that that gets to be a challenge and that’s why, for some of these, it just doesn’t work anymore,” Blumenthal explained, adding, “I really think the biggest barrier is building design more than anything.”

She's quick to clarify that “just because it’s older doesn’t mean it’s bad.” But her point is that big renovations often aren't a good fit for these older designs.

Take Vivo Investment Group. They bought a 40-year-old independent living property in Summerville, South Carolina, last year. The units were tiny, averaging 300 square feet. When a new competitor opened up, their census dropped below 80%, leading to a "death spiral."

“Everything gets harder,” Vivo Chief Investment Officer Brett Tanimoto told SHN. “It’s like you’re fighting this uphill battle when you’re competing against a new product.”

So, Vivo did something different. They converted the property into affordable housing for workers—singles, under 30, and over 55. In the last five years, Vivo has actually converted over 4,000 hotel and motel units into affordable workforce housing by adding kitchenettes.

“We’ve done that across the country and we wanted to see if we could replicate this strategy within the aging senior housing project,” Tanimoto said. “Summerville is the prototype.”

He points out that things like zoning changes with local governments and not enough parking can be big roadblocks to redeveloping properties. "Secondary and tertiary markets just happen to be easier to work in and just meet our investment criteria,” Tanimoto added.

Meanwhile, Helios Healthcare Advisors recently oversaw the sale of 13 smaller former assisted living and memory care communities (averaging 20 to 50 units). These were ultimately converted into places for substance use disorder treatment, traumatic brain injury specialists, and housing for people with intellectual and developmental disabilities.

“In certain instances on some of these smaller, more residential-style properties that subset works really well,” said Helios Managing Director Mario Santiago.

Santiago also sees potential in converting larger older senior housing communities into affordable housing. He mentioned an ongoing sale of a 260-unit independent living property in San Antonio, Texas, built in 1982, as an example of where owners should "reset the basis and convert to multi-family."

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However, this might only work for "nicer" aged properties that have been well-maintained. Non-"trophy assets" in the "second or third ring of developing suburbs" might have a tougher time finding a new life, depending on their location.

“What happens to those communities in high barriers to entry markets where the real estate is worth a ton,” Santiago pondered. “There are a lot of alternative uses for these things.”

Time's Ticking: New Development and an Aging Supply

The clock is seriously ticking for the senior living industry, especially with the baby boomer generation rapidly approaching the age where they'll need senior housing. Millions of older adults are coming, and we might not have enough places for them.

It's taking longer and longer to build new senior living communities. The median construction time hit 29 months in 2023, up from 16 months in 2015. Add to that a tough financing environment and rising construction costs. NIC data suggests the industry will fall short of demand by 2030 unless new development speeds up 3.5 times its current pace!

“We have five years until this wave of all the boomers will be eligible for senior housing age to come and if the average development takes nearly three years or longer from concept to fully built, we’re practically out of time,” warned Laurie Schultz, Co-Founder of Avenue. “If we don’t figure it out, someone else outside of the industry will and we need to figure out how the puzzle comes together.”

But amidst these challenges, Santiago sees an opportunity. He believes that the conversion and reuse of older properties into affordable senior housing could help solve some of the industry's affordability issues.

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“I think people are going to realize that the affordability issue is an opportunity and not a barrier, and hopefully there’s enough development to meet demand,” Santiago concluded.

It’s clear that the senior living industry is at a pivotal moment. The decisions made now about these aging properties will shape how we care for our seniors for decades to come. Stay tuned to see how this story unfolds!