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Strong Wait Lists, Flat Expenses: Senior Living Co-Ops Perform Strongly in Pandemic

Co-operative senior housing is weathering the pressures brought on by Covid-19 that are straining resources and operations across the greater industry.

Sales of co-operative senior housing shares are strong. Turnovers of available units are selling as fast as they hit the market, and have deep wait lists of prospects waiting to buy.

And overall expenses are holding steady, and in some instances are decreasing, as common costs related to communal area management are mitigating increases in expenses such as acquiring personal protective equipment (PPE).

That’s according to Dennis Johnson, chairman of the Senior Cooperative Foundation, a Shoreview, Minnesota-based group that advocates for senior co-ops across the country. And the information was corroborated by Dena Meyer, vice president of partner services and living spaces at Ecumen. Also based in Shoreview, Ecumen operates co-ops under the Zvago brand, as well as other types of senior living communities.

In this regard, Ecumen was part of a growing interest in co-ops among more traditional senior living operators prior to the pandemic. Co-ops’ strong performance in the midst of Covid-19 might create even more interest in this model.

In its performance during 2020, co-op senior housing is similar to — if not better than — independent living and active adult senior housing. The three share attributes such as a healthier, more active resident profile.

That said, co-ops do have their challenges. Providers are struggling to cultivate new leads, citing Covid-19 related safety concerns. And resident isolation has emerged as a pain point, Johnson told SHN.

In some isolated cases, co-op residents pushed back against restrictions to common areas, and continued restrictions to common areas are contributing to pandemic fatigue. Overall, residents understand the gravity of the situation and are self-governing their movements and response, self-isolating and quarantining when testing positive and keeping outbreaks to a minimum.

“I think co-ops have dealt with [Covid-19] very effectively,” he said.

No sales slowdown

Covid-19 has not cooled interest among prospective buyers entertaining a move to senior co-operatives. Individual co-ops continue to collect sale shares from new buyers, and wait lists for units that go up for resale have at least one interested buyer, Johnson said, citing anecdotal evidence from Senior Cooperative Foundation members.

In many cases, co-op units that hit the market are sold within a half day of listing, and as long as two days before a buyer commits.

“That really surprised me,” he said. “I thought share sales might have slowed down a bit. But they haven’t.”

Most co-ops shifted to virtual tours early in the pandemic, as they were under stay-at-home orders. As restrictions were loosened, however, many Senior Cooperative Foundation members shifted to limited in-person showings of units, allowing up to two members of a family to tour a co-op at a time.

Ecumen launched its co-operative senior housing brand, Zvago, in 2017 and currently has four in operation — including one that opened in October.

Wait lists for some units in Zavgo co-operatives are two-to-one, in some instances. Interest among prospective buyers waned in the pandemic’s early weeks, but began to pick up as medical professionals learned more about the coronavirus, and sales and marketing teams shifted to virtual and limited in-person tours.

“That speaks to there being a market of individuals out there that want this type of housing,” Meyer said.

Ecumen is conducting limited in-person tours of Zvago co-ops and ramped up its virtual sales and marketing strategy. The provider did not have to change its pitch to prospective co-op residents as a result of Covid-19.

“The amount of individuals that continue to reach out to us has remained neutral,” Meyer said.

Expenses hold steady

Co-ops have not experienced pressures to expenses that other senior housing communities are contending with as the pandemic continues, Johnson and Meyer said. Higher spending for safety equipment such as disinfectant and sanitation materials, for example, have been offset with spending reductions in foodservice and other miscellaneous expenses related to stocking communal areas, which have been secured for months.

Senior Cooperative Foundation hosted a conference call a couple weeks ago with nearly 20 member co-ops. None commented on any heightened increases to expenses. Some are reporting decreased spending as the pandemic has progressed.

Ecumen’s Zvago communities are also experiencing no notable increases in expenses. Co-op members are providing their own face masks, and aside from bringing in additional hand sanitizer dispensers, the communities are using the same cleaning supplies that were in place pre-pandemic.

“It’s been pretty expense neutral,” Meyer said.

The flat expenses have allowed Zvago co-ops to hold the line on members’ monthly service fees. A majority of member fees — 72% — are fixed costs. The remainder are outliers such as property taxes that are beyond residents’, or Ecumen’s, control.

“[Residents] own everything and have a say in costs,” she said. “It’s our endeavor to help the co-operative members not have to increase their monthly membership fees.”

Combating isolation

As with traditional senior housing, co-operatives are grappling with the effects months of restrictions are having on socialization between members. Common areas are either secured or restricted to smaller groups, and visitation is limited.

Zvago co-ops have co-operative living managers on staff, overseeing programming and working with committees to plan activities and social groups. These groups have embraced technology as an alternative to larger meetings, while in-person activities have been amended for smaller gatherings in common spaces, or done on a floor-by-floor level, in order to maintain social distancing guidelines, Meyer told SHN.

Co-operative living managers also serve as liaisons between Ecumen leadership and co-op members, and provide updates on federal, state and local health guidelines as needed.

Co-op communities do remain restricted to outside visitors such as residents’ loved ones. Technology is allowing co-op residents to communicate with family, to keep them abreast of any changes to health outcomes and alert them to updates. But the co-op model itself is helping residents fight the effects of isolation, as they rely more on their neighbors.
“The overwhelming majority of our members say that they have felt less isolated and safer in our communities than they may have at home because they’re there,” Meyer said. “They at least know that they have other members and friends under the same roof.”

The post Strong Wait Lists, Flat Expenses: Senior Living Co-Ops Perform Strongly in Pandemic appeared first on Senior Housing News.

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