If you want to move into Aberdeen Heights, a new retirement community being built west of St. Louis, you must be at least 62 years old. You will need to prove you have assets double the amount of your entrance fee and monthly income of at least 1.6 times the monthly service fee you will pay to live in Aberdeen Heights. You must obtain Medicare or other health insurance satisfactory to community owners and demonstrate that you are able to live independently and have not been diagnosed with Alzheimer's or dementia. Then, you get to pay Aberdeen Heights a bundle of money to live there. Such a deal!
[See Best Affordable Places to Retire.] For its part, the owners of the project -- a Presbyterian-affiliated non-profit in Kansas -- had to jump through an equally demanding set of hoops before they could interest investors in buying the largely tax-exempt bonds that will fund the $190 million project. They did so, and the resulting business plan, taking into account the litany of disclaimers such offerings must include, presents itself as a solid deal for investors. With credit markets still skittish and banks reluctant to lend, that's pretty much what it takes to get funding these days. That's particularly true for high-end projects such as Aberdeen Heights, which offers a full range of residential and healthcare services, and is known as a continuing care retirement community. I've already explained the business details of this project. Today, we'll see how business conditions have shaped the costs and membership terms for people who want to live in this new CCRC when it opens late next year.
If you're north of 60 and have thought at all about where you might want to live in your final years, you'd better hope that Aberdeen Heights is a rousing success. The ability of the senior housing industry to get back on its financial feet and move ahead with new projects will be crucial in providing attractive living opportunities to relatively affluent older retirees. There have been precious few CCRC living units added to the market in the past two years, but there is no shortage of people seeking comfortable care arrangements. As housing prices recover, expect more and more people to sell their homes and use the proceeds to fund their membership in a retirement community.
The typical new entrant into a CCRC is a couple, aged from their late 70s to early 80s, with a fair amount of money, and in good health. I don't know about you, but I'd sure like to fit that description when the time comes. In any event, it's not visions of some nursing home that dance through my head when I contemplate whatever will pass for home during my golden years.
Despite the membership hurdles listed above, advance reservations were received for 204 of Aberdeen Heights' 243 independent living apartments before the project's bond issues were even sold. The 590,000 square foot complex also will include three types of specialized care arrangements: 30 assisted living apartments, 15 memory support (Alzheimer's) units, and 38 nursing beds. People who want to use these special-care units can apply directly to them without first being residents of the independent living units. The details of the project are laid out in fine print in the bond issue offering.
When residents of the 243 independent living units reach the point where they need specialized care, they will have guaranteed access to them, without paying more money except for being billed for non-routine care that they elect to receive. If it turns out that an independent living resident must be permanently relocated to one of the three special-care areas, they will move out of their independent living unit and their monthly service fee will be adjusted to match fees for one of the project's mid-range living units. They also will have to pay for three meals a day, instead of the single meal that's included in their independent living package.
One meal a day is the standard arrangement for CCRC plans. Other basic services included at Aberdeen Heights are all utilities except phone, internet and premium cable; weekly housekeeping and cleaning plus changing of bed linens; regularly scheduled local transportation; 24-hour emergency alert monitoring; an individual storage locker, and, a parking space in the project's underground garage.
[See Best Places to Retire.]
There will be 12 different apartment layouts among the 243 independent living units. There will be 90 one-bedroom, one-bath units, ranging in size from 756 to 993 square feet. The middle-sized one-bedroom unit will have 827 square feet of space. Its price ranges from $282,910 to $330,105 (the lowest prices are for pre-constructions commitments). The monthly service fee for this unit is $2,495 for one person and an additional $995 for a second occupant.
The other eight models are two-bedroom, two-bath units, ranging from 1,082 to 1,838 square feet. The 1,350-square foot unit has a price range of $489,915 to $542,842 for entrance fees, and a monthly service fee of $3,995 ($4,990 for two persons).
These monthly service fees are for the project's Plan A and Plan C residency agreements. Plan A provides that 90 percent of the entrance fee will be refundable, regardless of when the resident leaves the community. Plan C reduces the amount of the entrance fee that is refundable by 2 percent a month, meaning there is no refund for residents following their 50th month. The entrance fee for Plan C is 30 percent less than for Plan A. There also is a Plan B, that guarantees at least a 50 percent refund, with a 2 percent monthly refund reduction through the 25th month. Plan B residents pay the same entrance fee as Plan A but pay $700 less per month in service fees.