Q&A with James Keledjian, principal at Pathway to Living

In a recent survey of senior housing investors, nearly two-thirds of respondents expected the size of their portfolios to swell over the next 12 months. Coupled with an imminent demand brought on by the aging baby boomer generation, it’s clear that this product type is poised for major activity over the next few years.

On November 7, 2018, REjournals will host the 10th Annual Chicago Senior Housing Real Estate Conference at the University Club of Chicago. One of the panelists, James Keledjian, principal at Pathway to Living, answered a few questions for us as a preview to that event.

Pathway to Living, which Keledjian co-founded in 1997, acquires, develops and manages senior living assets, with a focus on tailored wellness programs and a vibrant way of living. Many of their properties combine assisted living, memory care and independent living under one roof to diversify and enrich their offerings to older adults.

Where are the development and investment opportunities in the Chicago market? How does Chicago market compare to other cities around the country for these opportunities?

Like many other large metropolitan areas, Chicago has seen several new developments over the past five years. We still believe there are underserved pockets in densely populated, high-barrier-to-entry areas. We recently closed on a development project in suburban—but still lurban—Chicagoland that took several years to get approved. We’re going to stay focused on high-barrier development and will remain patient in the right submarkets.

What are the current trends in design, construction and management of senior housing facilities? Are there amenities that new and/or redeveloped properties must have, or others that can be skipped?

The design trends are moving towards supporting a lifestyle in a home-like environment. It’s important that new entrants into our industry recognize seniors are choosing our communities to be their home. With that in mind, our communities are designed with multiple dining venues, exercise rooms, wellness and activity spaces, and ample outdoor space.

Our mindsets and viewpoint on developments and acquisitions are long term and our communities need to evolve over time. We’ve taken design cues from multifamily, hospitality and the food and beverage industries.

With the “silver wave” set to increase demand for senior housing, how has this impacted investment and development? Are there other demographic trends that will impact the senior housing asset class?

We’re seeing more private equity, insurance groups, pension funds and foreign capital invest in our space. This has kept acquisition prices up and has increased investment demand for new developments. We’re seeing a steady pace of new construction from experienced, regional operators and developers.

Regarding the demographic trends, we won’t see a sizable impact of the boomers for another five to 10 years. We’re actually realizing the low birth rates after the great depression which is placing some short-term pressure on occupancy. But to get ahead of the “wave,” we are concentrating on strategic developments and acquisition opportunities to be competitive for the long term.

What is the financing outlook currently for market rate and low-income senior housing?

The ability to obtain bank debt and agency financing is very favorable in our space for experienced operators with local market knowledge.

There is still time to register for the 10th Annual Chicago Senior Housing Real Estate Conference, which will be hosted on November 7 at the University Club of Chicago. Click here for more information or to register.