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Fitness Facilities Flourish

Fitness Facilities Flourish

Forget the shuffleboard. Today's retirees want spin classes, Tai Chi, and spa treatments — the same trendy activities that young people enjoy. No wonder the latest projects for seniors feature fancy fitness facilities.

"The spa and the fitness center are major reasons people choose to live here," says Jean Brophy, vice president of senior living at non-profit Mather Lifeways, which operates five continuing care communities. Mather’s new Splendido project, co-developed with the Arizona-based Plaza Cos., opened last fall just outside of Tucson.

The continuing care property includes 246 independent living apartments, and 60 assisted and nursing care units. Entrance fees range from approximately $180,000 to $760,000. Monthly fees start at $2,000 and go as high as $5,000, depending on the size of the unit rented, and the amount of healthcare included.

Set at the base of the Rincon Mountains, Splendido features a 10,000 sq. ft. spa and fitness center. The development includes indoor and outdoor pools, along with rooms equipped with tread mills, elliptical machines and weights.

Yoga, strength training and aerobic classes are offered. A cafe offers healthy meals as well as indoor and outdoor seating. The spa features massage rooms with doors that lead outside to a private meditation area where residents rest peacefully after a rub down.

"Wellness programs are what people are looking for," says Brophy, based at Mather Lifeways' corporate headquarters in Evanston, Ill.

The fitness craze signals a change in attitude among building operators. Instead of focusing on disabilities, the emphasis now is on disease prevention and healthy living. Not only are fit residents happier, the thinking goes, but landlords don't have as much turnover in their buildings because residents don't get sick and leave. Also, as competition for residents heats up, developers say fancy fitness facilities are imperative.

"Health-related amenities are really important," says seniors housing consultant Gene Warren at Thomas Warren & Associates LLC, Phoenix. "Residents really believe they are starting the next chapter of their lives and they're concerned about being healthy."

Property owners are catching on quickly. About 45% of retirement community managers planned to develop new fitness or wellness centers or expand existing facilities in 2007 and 2008, according to a 2006 survey by the International Council on Active Aging. The same survey showed that 43% of managers had developed or expanded wellness and fitness facilities in 2005 and 2006.

Wellness is a way of life at the big new hotel-condo projects managed by the famous Canyon Ranch Spa in Tucson. Called Canyon Ranch Living, the buildings, which are not age restricted, are targeted at aging baby boomers. The first building was completed in May. The $646 million project in Miami Beach is by WSG Development Co. The project features a 70,000 sq. ft. spa as well as a health and healing center with workshops on stress management, disease prevention and healthy cooking.

Units are priced from $1.5 million to $5 million. A similar Canyon Ranch Living project, by LR Development Co., is also under way in Chicago. But a Canyon Ranch Living tower slated for Bethesda, Md., was scratched last year, in part, because of the slow condo market.

Are fitness and wellness programs a loss leader? That depends, developers and property managers say. At Spledido, the fitness center membership is included in the rent. Special programs cost extra and residents pay for spa services, which are provided by an outside company. Building operator Mather Lifeways receives a percentage of the spa's gross receipts, which covers expenses. "We view it as part of the amenity package," says Brophy.

At Brookdale Senior Living Inc. (NYSE:BKD), fitness programs and health screenings, such as blood pressure checks, aren't considered a profit center, according to Sara Terry, vice president of Optimum Life, the Chicago-based company's name for its wellness program. She emphasizes that Brookdale offers activities and services that encourage healthy living. Last July, Brookdale helped to fund the Institute for Optimal Aging, a non-profit foundation to enhance the wellness of older adults.

But rehab programs are a profit center, Terry says. These are the services needed by residents after an illness or injury, and reimbursed by Medicare or private insurance. Brookdale's rehab program is handled by Innovative Senior Care, which was included in Brookdale's July 2005 purchase of American Retirement Corp. In an earnings statement for the first quarter of 2007, Brookdale indicated one of its growth strategies is to increase the rehab business.

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