Posted on News-Press.com: February 9, 2010
By Laura Ruane
Shell Point retirement community is something of a real estate hybrid: a nice place to live with varying levels of health care built in.
It’s also the last move many of its residents will make.
Shell Point’s activities-with-health care formula has worked well at the waterfront community south of Fort Myers for 42 years, but the national recession has slowed sales.
Community leaders are responding by temporarily discounting one-time entrance fees, holding flat monthly charges over the past year — and encouraging residents to field questions from prospective new neighbors.
Shell Point holds its annual open house Thursday. A new feature this year: “ask-a-resident booths” scattered throughout the 700-acre community.
“The interest level probably never has been greater. We provide security in an environment where there is none,” said Peter Dys, president of the nonprofit community that’s wholly owned by a Christian alliance.
However, “the sale of homes (elsewhere) is going to have to occur, to break the logjam,” Dys noted.
Some people are stuck in homes that they need to sell in order to afford entry into Shell Point. Also, many stock portfolios are worth considerably less following the market meltdown a year ago last fall.
“Adequacy of funds seems to be the issue” among consumers, Dys said.
People with million-dollar homes now worth about half that might go ahead, and commit to buying into Shell Point, despite their lower net worth. Those of more modest means, perhaps owning one home formerly worth $100,000, but now valued at the $50,000 range, might find the community’s financial qualifiers too steep, Dys noted.
Senior housing holds up
The recession might delay some demand for new adult housing products; however, it won’t destroy it, said David Schless, president of the American Seniors Housing Association based in Washington.
“As a general rule, senior housing has held up quite well in the past 24 months or so,” Schless said. “The preponderance of seniors have been in their homes 25, 30 years or more. They’re in a different place than those who bought their homes in 2006. They’ve still seen a tremendous amount of appreciation in their homes’ value.”
Shell Point and other continuing care communities thoroughly review incoming residents’ finances, because they make promises for care that they are morally and legally obliged to keep.
Continuing care communities offer a continuum of services, including independent living, assisted living and skilled nursing, as residents need it.
Entrance fees and monthly charges can be substantial: At Shell Point entrance fees range from $88,000 to $500,000 per person, with a much lower charge for a second member of the household. Monthly maintenance fees range between $1,100 and $4,000. That does not include out-of-pocket expenses, such as groceries and/or optional meal plans, prescriptions and phone service.
People don’t own homes or property at Shell Point; they purchase use of housing in one of three neighborhoods. Units range in size from 470-square-foot studio apartments to three-bedroom condominium homes exceeding 2,300 square feet.
Many people must sell their homes and some other assets to afford life at Shell Point. In exchange, they get the medical and housekeeping services they require as they advance in age.
They also get access to resort-like amenities, activities and clubs populated by the community’s more than 2,200 residents.
‘Gift’ to children
“We felt this was a gift we could give our children, so they wouldn’t have to worry about us as we get older,” said semi-retired church worker Peter Nanfelt. He and wife Jerry, both 72, moved to Shell Point in 2007.
“Everybody probably took a hit when the stock market dropped so badly,” Peter Nanfelt said, adding: “I don’t think we’ve seen a lot of people (at Shell Point) struggling to meet their monthly expenses.”
To help ease the financial pain of entry, Shell Point has responded by not raising monthly maintenance fees over the past year — and by offering temporary discounts of up to 25 percent on the onetime entrance fee.
Contract choices
In part because more people are purchasing long-term care insurance, Shell Point has expanded the menu of contracts from the original standard life care to include a modified life care contract with lower entrance fees and monthly fees.
The trade-off? With the latter deal, residents themselves pick up the cost of skilled nursing care, at private pay rates, if they need such care.
A third contract option offers a 100 percent refund of the entrance fee upon death or contract cancellation. This contract does not include assisted living or skilled nursing, but provides access to those services at Shell Point, at private pay rates.
The community has a 93 percent occupancy-and-drawing-revenue rate, Dys said. That’s down from a pre-recession 97 percent or higher rate, but still better than the comparable statewide rate, which Dys estimated to be about 83-84 percent.
Upgrades point to the community’s financial strength. Improvements made in the past 18 months include:
- Completion of a five-year, $23 million-plus renovation of its skilled nursing facility;
- Completion of a $4-million-plus renovation of its Kings Crown assisted living facility, one of two in the community; and
- The start one month ago of a $3.5 million rehabilitation center addition to the skilled nursing home.
