On the whole, continuing care retirement communities (CCRCs) have fared well financially, even through the recent years of economic turmoil. Though most CCRCs finance themselves completely with long-term debt, one provider has taken a different approach, says this Senior Housing News report.
Mather LifeWays operates mostly debt-free, using bank construction loans which they have repaid within five years, according to Mary Leary, the company’s president and CEO. They also take the financial risk of offering residents a “non-contingent entrance fee refund, guaranteed within 150 days of move-out.” Per the article, the risk pays off in that prospective residents can make their decision with confidence and “a great piece of mind.”
These large entrance fees (which are typically not refundable) are the reason that many hesitate about choosing a CCRC, even though the prospect of moving only once and simply transitioning through care levels as needed is attractive.
For others, covering the cost of the entrance fee is contingent on the sale of the home they’re leaving behind. Some CCRCs, recognizing these direct effects of the housing slump on their industry, have offered various targeted incentives, such as help with selling their homes.
In the future, we’re likely to see a move towards “CCRCs without walls,” that is, bringing the services typically provided in continuing care communities directly to seniors’ homes. Read more about CCRCs of the future here.