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Under One Roof, New Opportunities in Senior Living

Under One Roof, New Opportunities in Senior Living Banner Image

Drive through practically any suburb and you can’t miss the signs that say, “Store Closing Sale,” or “Retail Space for Rent.” It’s no secret that brick and mortar retail stores are struggling to stay afloat particularly with numerous soft goods retailers filing for bankruptcy and disappearing. The convenience of online shopping has changed the face of commercial built environments, often leaving empty what were once the crown jewels of retail – the regional shopping mall – and placing a financial drain on governmental taxing agencies as they lose both property taxes and retail sales taxes. Credit Suisse, a financial institution, has predicted that as many as 25% of regional malls will have shuttered in the next five years. Considering that regional malls can be as large as 600,000 to 800,000 square feet with acres of parking surrounding the building, there will be (and in some cases already is) a glut of empty buildings in prime locations that are searching for new life.

Of course, shopping malls are not the only institutions that are experiencing an upheaval in closures. In the past year, nearly 22,000 hotels have closed. Stand-alone restaurant chains are also closing locations at an alarming rate with over 350 units closing this year from just seven well-known chains alone.

Repurposing for Senior Living

Converting these buildings into senior-focused uses is not a big stretch of imagination. Consider, for example, that many regional malls have for some time opened their doors earlier than regular shopping hours so seniors can utilize them as walking exercise paths. Some even provide distance markers so the “mall walkers” know how far they’ve traveled. Seniors are accustomed to the malls as a community gathering place, albeit a community that is what the participants want to make of it. Additionally, many declining malls have turned to service providers such as urgent care, medical clinics and optometrists to fill vacancies to which seniors are accustomed to visiting.

Hotels

Underutilized hotels can be an ideal and economical conversion to independent senior living or assisted living apartments. Many of these structures have full commercial kitchens, large dining rooms and meeting rooms that are well suited for senior living. The guest rooms already have full bathroom facilities with some even having small kitchenettes. Repurposing of a hotel may include renovations like combining rooms in order to provide larger apartments and perhaps converting one of the room’s bathrooms into a kitchen. Updating the meeting rooms may be as simple as redecorating or, in the case of larger meeting rooms, subdividing them into beauty salons, card rooms or “home” theaters for residents to enjoy. Many hotels also have swimming pools, fitness gyms and business centers that may be a marketing attraction for seniors searching for independent living. Hotels are often located in areas where there are other amenities suited for senior living such as public transportation, shopping areas and ease of vehicular access for visitors. Generally, there is also ample parking which may allow for subdividing the site areas and developing senior friendly ancillary businesses such as clinics or health clubs.

Restaurants

Stand-alone restaurants may be adaptable for senior living uses as well, particularly when one considers developing living units in an adjacent parking lot and connecting these new units to the existing restaurant building. Of course, restaurants already have a commercial kitchen and dining area and, depending on the population size of the residential addition that is being served, perhaps enough square footage to be converted to other social spaces.

Regional Malls

Perhaps the most promising yet most challenging repurposing would be the regional mall structures. Large anchor stores as well as the smaller in-fill stores that populate most malls are not necessarily well suited for residential units. These vacated stores can be repurposed into a “village” of amenities around which the expansive parking lot areas can be constructed into purposefully-built senior living retirement apartments, assisted living apartments or skilled nursing. The most challenging portion of this approach is creating a sensible and sustainable business plan for the project.

Within a regional mall store, there is a lot of area dedicated to retail display space and a very low ratio of floor space to exterior wall space with few or no windows for natural light. Thus, these spaces may not be amenable for resident living purposes without substantial building modification. These modifications may include removal of the large box store center and portions of the roof to create courtyards that would let in natural light and meet the light and vent building code required for residential uses. This approach, however, may require compromises in residential layouts and additional structural and code modifications in order to maintain the integrity of the building and the change in occupancy use. These larger spaces can be more readily converted to senior living ancillary uses and amenities such as support office or utility spaces, meeting or theater rooms, dining or convenience venues, commercial or serving kitchens, adult or child day care, fitness or PT/OT gyms and health clinics or doctor offices.  

As one can imagine, it would be nearly impossible for a single senior care provider to undertake the purchase and repurposing of a large mall, particularly when such an undertaking may require new construction as well as significant remodeling of the existing structures. Perhaps the most sensible approach would seem to be a collaboration of care providers, each contributing their own residential construction in order to complement and not compete with others. These varied care providers could also collaborate in the construction of affordable, non-senior specific housing which could provide preferential access to campus workforce staff and would contribute to a fully intergenerational community. 

Tax Implications

It is not unthinkable that local taxing entities would be interested in participating in the repurposing as they could recapture lost or deferred real estate taxes. At minimum, they would see in the empty mall a community eyesore that has been given new financial and aesthetic life. Additionally, as the sea of asphalt around the mall would not be required to be as large, there would be opportunity for the taxing entity to obtain new parkland or even community-oriented uses such as swimming pools, first responder bases or even city office spaces.

Code Challenges

In repurposing older buildings for senior living purposes, there are practical challenges that must be considered including building code challenges. When a structure is being changed for occupancy, the newly repurposed building must fully comply with the current code for that new occupancy. For older hotels, for example, new fire alarm and sprinkler suppression systems may have to be installed to meet current code requirements. A thorough professional review and assessment of a structure is in order prior to diving into the remodeling work.

Repurposing hotels, restaurants and regional malls for senior living purposes may seem on the surface far-fetched, but with a little imagination, the right business plan and the courage to think outside the box store, it can be very rewarding.

Jeff Anderzhon, FAIA, NCARB

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