Difficulties Facing the Senior Housing Market
Difficulties Facing the Senior Housing Market
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Home Page > Home and Family > Elderly Care > Difficulties Facing the Senior Housing Market
Difficulties Facing the Senior Housing Market
Posted: Dec 03, 2008 |Comments: 0
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Difficulties Facing the Senior Housing Market
By: Wayne Kaplan
About the Author
Wayne Kaplan is Of Counsel at Ruskin Moscou Faltischek, P.C., one of New York’s leading healthcare and business law firms, and is head of the firm’s Seniors’ Housing Group. Wayne was one
of the founders and General Counsel of Kapson SENIOR QUARTERS Corp. and is currently Chairman of the Legal Committee and member of the Board of
Directors of the Empire State Association of Assisted Living.
(ArticlesBase SC #668913)
Article Source: http://www.articlesbase.com/ – Difficulties Facing the Senior Housing Market
The Industry Today
The seniors’ housing market has become soft, the gap between buyer and seller expectations has grown wider making it hard to get deals done, valuations have contracted and will be driven by fundamentals instead of by cheap capital, cap rates are rising, the debt markets have become very conservative, and some lenders have been changing their terms or just getting cold feet. These factors combined or separately, are impacting participants on both sides of the table.
Proceed with Caution
The troubles in the subprime mortgage sector have sparked concerns about credit quality. However, some industry professionals are saying that the changing climate is not necessarily a bad thing. The seniors’ housing market was getting far too overheated, with easy money spiking up the price of assets and lenders going higher and higher up the risk spectrum in order to put their dollars into play. A fast adjustment was needed. This meant that on the debt side, borrowers could forget about high loan to values and lengthy interest-only periods. The capital has become more expensive and harder to come by. As a result, an increasing number of deals are being re-priced or scrapped altogether. So what does it all mean? According to Real Estate Forum, it really depends on who you talk to. Some in the business are holding on tight in hopes of weathering the storm while others are looking closely at the potential for profit. But there is one thing that everyone seems to agree on – it won’t be a smooth ride. The economy is showing signs of weakness, oil is approaching $100 a barrel, the housing market is in a slump, Wall Street bonuses were lower this year, job growth is tapering off and consumer confidence continues to decline. It means that it’s too early to tell just how wide and deep the impact will be.
Financing – A Return to Normal Conditions
Spillover from the sub prime mess has pushed conduit lenders to the sidelines, causing a temporary slowdown in velocity. Commercial banks, credit unions, life insurance companies and agencies have stepped in, and senior’s housing investment activity is holding its own as a result. Tighter lending standards, particularly lower loan-to-value ratios, higher debt-service coverage ratios and focus on actual financials are here to stay, but should be characterized as a return to normal conditions rather than a credit crisis. More lender scrutiny and capital discipline bode well for the long-term health of the sector by limiting speculative investment and development.
New Ways are In, Old Ways are Out
As medicine and health sciences advance, seniors are, on average, healthier and more active than ever before, and their demands have evolved accordingly, according to Commercial Property News. While the implications are far reach ing, the major effect has been an overarching shift away from sterile, institutional-feeling facilities toward a more independent, amenity-rich and home-like environment. Seniors are demanding internet access, larger units, full-size kitchens are becoming standard, and apartments are starting to contain additional bedrooms, half-bathrooms and dens.
The Flood Begins
In October, the nation’s first baby boomer filed for Social Security benefits, with an estimated 78 million to follow. The number of beneficiaries will nearly double by 2040, while the work force that supports Social Security will grow by only about 16 percent.
New Development
There has been a 28% increase since last year in the total number of units under construction in the top 75 metro markets. The NIC/ASHA report indicated that Seattle (with 2,347 units) had the greatest amount of new construction started in the survey year (April ‘06 through March ‘07). The next four metros, in order, were Dallas, New York, Houston and Chicago.
Alzheimer’s
With more and more people living into their 80s and 90s, Alzheimer’s disease is more common today than it was 100 years ago. Estimates of its frequency vary, but it strikes one out of every 5 people between ages 75 and 84, and 42% of those over age 85, according to the Alzheimer’s Association. More than 26 million people worldwide have the disease, and a forecast says the number will more than quadruple by 2050. The biggest jump is projected for Asia, home of almost half of the current Alzheimer’s cases, or 12.6 million cases. By 2050, Asia will have 62.8 million of the world’s 106 million Alzheimer’s patients. A new study suggests that America’s Alzheimer’s toll will rise to 8.8 million by 2050 from 3.1 million today. Among estimates for other regions are: Africa, 1.3 million cases today and 6.3 million in 2050; Europe, 7.2 million and 16.5 million; Latin America and the Caribbean, 2 million and 10.8 million; and Oceania, 200,000 and 800,000.
What Other Experts are Saying
“The seniors housing and care market is going through what we believe will be a much-needed market correction. While this may be mildly painful to some in the short term, in the long term it will benefit the industry and bring more stability.” – Steve Monroe, SeniorCare Investor
“When real estate finance finally settles down after this year’s subprime turbulence, underwriting for seniors housing will seem downright bland compared with the recent past. Seniors housing cap rates are going up for now. The availability of capital has been curtailed – there’s still some debt financing available, but the extra-high leverage available through CMBS and CDO products for all types of real estate classes is over, so we’ve seen a peak in prices for a while.” – Craig S. Jones, Sr. Managing Director of RED Capital
“Today’s sellers are living in yesterday’s world and today’s buyers are afraid of overpaying if they no longer have to. When determining value in the acquisition market, 65% of the respondents to a survey said they will use trailing net operating income while 35% will use projected net operating income. Nine months ago, these percentages were probably reversed.” – Steve Monroe, SeniorCare Investor
“There are fears about the economy, but there’s not a whole lot of fear about health care demand.” – Louis W. Taylor, Managing Director at Deutsche Bank Securities
“The seniors housing industry is changing from a need-driven model to a more choice-driven model. Today’s seniors are more active and independent. They expect a lot more choices. They’re going to demand the best of all worlds.” – Steve Gilleland, Director for CapitalSource’s Healthcare Real Estate Finance Group
Average entrance age is 82, up from 78 just 10 years ago. – Larry Cohen, CEO of Capital Senior Living Corp.
“Capital is more expensive and the terms of the loans are stricter, but investors have adjusted to the new lending environment pretty quickly.” – Robert Kramer, President of NIC
“Rather than focusing on the long-term baby boomer demographics which are still many years away, the focus needs to be on customer outreach and penetration of the existing demographics. The perception of senior housing is still generally negative, viewed by many as institutional buildings where senior go to die. The challenge for the industry is to explain the product and change that perception. A strong advocate for the industry is needed.” – Dr. Peter Linneman, a keynote speaker at this year’s NIC Conference
Retrieved from “http://www.articlesbase.com/elderly-care-articles/difficulties-facing-the-senior-housing-market-668913.html”
(ArticlesBase SC #668913)
Wayne Kaplan -
About the Author:
Wayne Kaplan is Of Counsel at Ruskin Moscou Faltischek, P.C., one of New York’s leading healthcare and business law firms, and is head of the firm’s Seniors’ Housing Group. Wayne was one
of the founders and General Counsel of Kapson SENIOR QUARTERS Corp. and is currently Chairman of the Legal Committee and member of the Board of
Directors of the Empire State Association of Assisted Living.
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Wayne Kaplan is Of Counsel at Ruskin Moscou Faltischek, P.C., one of New York’s leading healthcare and business law firms, and is head of the firm’s Seniors’ Housing Group. Wayne was one
of the founders and General Counsel of Kapson SENIOR QUARTERS Corp. and is currently Chairman of the Legal Committee and member of the Board of
Directors of the Empire State Association of Assisted Living.
The Truth and Benefits of Senior Housing
If you have an elderly relative living with you, it is but natural to want to give them the best in
every sense. You want to make them comfortable and ensure they are healthy and happy. This is unfortunately, not a practicality of life. We are not always able to give the kind of time and attention that the elderly require. Additionally, the health of the senior member may also be delicate, and you may not be equipped to cater to their needs on your own.
Most homes today are not friendly enough for senior citizens. Major modifications and additions are required to enable the surroundings to be convenient and accessible to them. In light of these constraints, senior housing has become a more viable option today
Senior housing enables members to live a comfortable, secure life with dignity. Most people save some money, or set aside a portion of their savings to be able to care for themselves in the later years without being dependent on their family. This comes handy when they need to relocate to senior housing facilities.
Senior housing takes into consideration all the specific needs, requirements and constraints related to living seniors. The houses are all at one level and need no climbing. They are safe places with no breakables around them, and even have the provision of allowing free movement in wheelchairs. The beds are designed such that getting into and out of them is easy, and the flooring and bathrooms are also specially tailored to suit the needs of seniors.
More than the houses themselves are the services. There is experienced medical assistance at hand all the time. Recreational and rehabilitating services are also available routinely. The elderly are in the company of others in a similar phase of life, and enjoy the company of peers for large parts of the day. There is less likelihood of boredom or loneliness creeping in. Most importantly, senior housing enables people to feel more independent and gives them a sense of worth and keeps their self esteem intact.
Senior housing allows residents to be as active as they want to, or need to be. There is a separate dining area where residents can meet for meals. Meals can also be reached to homes where residents are unable or unwilling to get out. There are small shopping areas within the housing facility where provisions and small necessities may be bought. This allows some walking and physical activity for the seniors. There are usually some cultural, social and recreational events which are organised regularly to keep them entertained and stimulated. There are usually some open spaces and gardens which are refreshing, and make good meeting places in the evening.
The life that we make for ourselves is how we are remembered. The elder years are often very difficult, especially if you are single and have spent several years married to your spouse. Senior living is a chance at being yourself in the company of other people who are in a place quite similar to yours. Being happy rests in your hands.
Author is an expert technical writer for senior citizen websites who specializes in senior citizen article writing. For more information on senior citizens, please visit my link Senior Living Communities
Seniors Feel Home Like With Smaller Senior Housing Community
Many seniors and their families prefer the homelike feel of a smaller senior housing community. With 247 different senior housing license types nationwide—about 60 specific to facilities with 20 or less beds—identifying these communities often proves arduous. Smaller communities fall under the umbrella category of “Assisted Living”, and in many states are not distinguished from larger assisted living communities.
Such is the case in states like California and Colorado, where assisted living communities of all sizes are called “Residential Care Facilities for the Elderly” and “Assisted Living Residences” respectively. Senior housing license type names are more helpful in states such as Washington, where senior housing communities with no more than six residents are called “Adult Family Homes”.
The following are a few general tips for quickly identifying small senior housing communities from their senior housing license type:
Senior housing license types specific to small senior housing communities often include phrases such as “Family Home”, “Foster Care”, “Personal Care”, “Group Home” or “Boarding Care”.
Some states that use general names such as “Assisted living” as licensing designations will also specify community size. Some do so overtly with words like “Small” (Michigan), while others use code such as “Type-I” (Hawaii).
Senior Housing features a License Type Reference which provides a detailed definition of all 247 license types categorized by state. The resource proves especially useful when searching for housing in an unfamiliar area.
Deciphering license types for senior housing in the US can be a convoluted process due to the lack of standardization from state to state. When searching for a senior housing community in an area with which you are unfamiliar, it’s often a good choice to contact the local Area Agency on Aging which can be found through www.n4a.org.
When it comes to Senior Housing , I highly recommend information from SNAP for Seniors . For valuable information regarding investing in homes visit SNAPforSeniors.com.
Making the Transition to Senior Housing
The moving process always causes a great deal of stress which, for seniors and their families, can be compounded by a number of complicating factors. The following are a few tips for those who are getting ready to move.
Downsize early
Often, seniors are moving into a smaller space when transitioning into a senior housing community, which means many of belongings they may have accumulated over the years won’t fit in their new home. This can create a very difficult situation when it comes time to move, as it often comes down to throwing away many items which hold sentimental value.
Try to go through this process as early and as gradually as possible. Get the family together and go through the basement, attic or garage well before the time comes to move. Doing so will ensure that the move to senior housing goes much more smoothly.
Check to make sure it’s a good fit
Often families overlook seemingly-smaller issues when selecting a senior housing community which can prove to be deal breakers down the road. After finding a community that is in the desired area and provides the basic care needs, continue to ask questions. Do they allow pets? Does the community offer kosher or vegetarian meals? Is smoking allowed? What are most of the other residents like? These are often-overlooked issues that should be considered before a decision is made.
Look into getting help
Moving into senior housing poses many potential complications that one simply doesn’t have to worry about in any other situation. Seeking the help of a professional senior move manager can save mounds of time, effort and frustration in the long run.
The National Association of Senior Move Managers is the largest senior move manager professional organization in the nation. Its members have experience helping seniors make the transition into senior housing, and their expertise extends beyond the moving process. NASMM members can even help you find an appropriate senior housing community, as the organization has partnered with snapforseniors.com which maintains the most current and comprehensive senior housing resource in the nation.
For further details about senior housing, retirement homes, assisted living and senior care services visit snapforseniors.com
Amanda Smith is a Real Estate professional .She loves writing about senior housing issues, and helping senior citizen to make their senior living simple .Smith is associated with SNAPforseniors from very long time.
California Senior Housing Community
There are families in which senior members reach the age when they wish both to live independently and as well as still relish the facilities of a senior housing community . This will be a concern for the senior wishing to get advantage of this opportunity and also the younger members of the family who need to find the foremost appropriate place for his or her elderly parents.
As an example, amidst all the potential locations in the State of California (and there are 535 senior housing communities in California) it’s continuously wise to check their services on the community’s websites so as to settle on the acceptable one. The website retirement homes com offers a manual to retirement living by highlighting numerous selections.
There are senior housing communities placed in a vacation atmosphere by the sea and other in an urban location. Other choices are acceptable for an ecologically inclined senior member who would love living in an area filled with natural foliage.
The primary move for a younger friend is finding a suitable senior housing community for the family’s senior members is to apply for for advice.
The California Registry offers its services by replying commonly asked questions regarding geographic preferences, care desires and budget demands. They respond to matters that may necessitate counseling services for the seniors. A client assessment questionnaire is sometimes required in order to make the method easier for the counselor’s analysis of potential the senior housing communities that are applicable for a particular senior member.
Short listed options and advised locations are sent by means of e-mail, fax or mail to the inquirer and this capability saves time, money and effort for the family. If there will be an critical need for a senior member to be relocated without delay to a senior housing community, the California Registry also takes the necessary actions to facilitate that emergency request.
Some useful tips for selecting a senior housing community are as follows:
1. Make a briefing for a 1st visit. This allows you to be seen by the directors at once . However, if you have got already determined on a specific facility, go there unannounced, especially during mealtimes, so you’ll be able to examine how meals are dealt with.
2. When there is no workers present, move toward a dweller and have a word to the person so as to get some insight into his or her feeling in that specific senior housing community.
3. Don’t be taken in by the nice appearance of the facility. Of course, it is foremost that the facility will be orderly, clean and without offensive smells. What one should seek for, is that it’s well maintained and kept in sensible situations but not necessarily over-decorated.
4. Intensely observe how workers and residents cooperate with each other. It is crucial that the occupant is comfy with the staff. The psycho-social wants of the residents must be met by the staff. See if the residents appear down. Maybe that is a sign that they will not be receiving the highest quality of life that they had expected.
5. It is fundamentally vital to comprehend and perceive the terms and conditions of the leasing deal or resident agreement. Discover what is included and what is not included within the services and whether there are additional prices not pointed out in the document. In addition, ask to look at the facility’s state licensing check up survey.
6. Lastly, notice out what will happen if the cash runs out. Sometimes residential care homes have Medi-Cal agreements with the State that give for the guardianship of residents whose funds are exhausted.
The author is the owner of California Senior Housing Community Web Page .
The author is retired from a communication company . For more information on help to seniors , visit the web site
http://www.the-seniorhelp.com
The Senior Housing Industry Today
The Industry Today
The U.S. is in fear of a deep recession, the stock market is tanking, home prices are plummeting, unemployment is rising, retail sales are tumbling, demand for commodities is sinking, bank earnings keep falling, and consumer confidence is shaky at best. The disconnect between the seniors housing buyer and seller in today’s market continues to be fairly wide and there is apprehension on both sides of the table that didn’t exist a year or two ago. Is all lost in the seniors housing industry?
NO. The demographics are still strong and are getting stronger. Also, there will be fewer new entrants to the industry, new construction will be scaled back and therefore there will be less competition in the coming years. As a result, good operators will go forth and prosper. The industry will periodically experience significant challenges just as it always has, including financial bubbles much like the one whose collapse is plaguing us now. In this slow acquisitions market, the few transactions that are getting done are either small, at a low price, or both. However, the increasing size of the senior population will intensify demand for senior housing opportunities in the future, making current senior living communities even more valuable.
Construction of new seniors housing units has slowed by 12% over the last year, largely due to the frozen credit markets, and building activity is likely to decline even further in the months ahead according to the “Seniors Housing Construction Trends Report – 2008.” Bob Kramer, President of NIC, says new product will become scarce after 2011. The building data shows that independent living units represent about 37% of the total units under construction, followed by apartments (29%), assisted living (17%), nursing care units (11%) and memory care (6%).
However, the seniors housing market is not on life support. Leasing velocity may have trended down, but units are being absorbed. Shovels may not be cracking through the earth as before, but projects are going up. Facilities are not flipping at rapid-fire pace, but investors are buying. And while financing is no longer easily obtained, borrowers are sourcing capital. The bottom line is: deals are still getting done.
Future Residents
According to Mr. Kramer, the average age of new residents in assisted living is now 84. The big wave of baby boomers won’t be ready for seniors housing until about 20 years from now, so the industry will have time to find out what boomers want. And they will want something different from their parents. The focus will be on lifestyle and experience. The whole notion of successful aging will be important, and buildings will have to focus on fitness, nutrition, active learning and socialization. It will be up to the industry to draw the contrast and show what it will be like to live in a vital community versus living alone at home. Boomers will want to maximize the retirement experience, not avoid it.
As Costs Rise, Assisted Living Remains the More Affordable Care Choice
The average daily cost for assisted living is still less than half the average daily cost for a private room in a nursing home –which helps fuel support for allowing seniors to age in place once they move into assisted living communities. According to the 2008 Long-Term Care Cost of Care research report from Prudential Financial, the average daily cost for assisted living is about $100, or $3,241 per month. The average daily cost for a nursing home private room is $217, or $6,600 per month.
Independent Living is Not Discretionary
Independent living facilities and CCRC’s have been hit hardest by the mortgage crisis, losing prospective residents due to a rising number of seniors’ inability to sell their homes. However, the transition from a single-family home is not purely discretionary. This is not simply a matter of what the consumer wants – seniors are moving because of healthrelated lifestyle reasons.
What Other Experts Are Saying
“It is always important to remember that capital is a commodity, it moves quickly and has no boundaries. As such, it will always go where the returns are the highest for the relative amount of risk. Despite the gyrations in the seniors housing publicly traded equities over the last few months, with much of that volatility based on fear, uncertainty and a lack of knowledge of the facts, the seniors housing and care industry not only remains a relatively safe investment vehicle, the returns will be favorable for many years and should beat other “real estate” oriented investments as well as other health care investments.
The impact on the industry from the crisis of confidence on Wall Street may be severe in the short term, but it will also result in a more inward-looking industry focusing on operations, staffing, quality of care innovations and, perhaps, cooperation, and that will benefit everyone in the long term. For now, however, the strongest credits will still have access to capital, albeit at a higher price, while the weaker credits will either be locked out of the market or the price will be too high. For everyone in the industry there will be a renewed lender focus on track record, and it better be a good one.” – Steve Monroe, Editor – The SeniorCare Investor
“We see growth in all forms of seniors housing except for nursing care. We will reach a point in the next 10 years where skilled nursing will no longer be the primary [seniors housing] segment.” – Robert Kramer, Pres. of the National Investment Center for the Seniors Housing & Care Industry (NIC)
“Senior living’s strong fundamentals are characterized by its dual health-care and real estate role and by the strong demographic trends that typify the senior living industry, and these fundamentals make its outlook positive despite the current credit crisis.” – Adam Heavenrich, Pres. of Heavenrich & Co.
“Right now everybody is looking at cash flow and saying, ‘What’s the trailing 12-month net operating income?” – Chris Sonne, Managing Director, Cushman & Wakefield
“All business cycles divide companies into three I’s: innovators, imitators and idiots.” – Warren Buffet
“I skate to where the puck is going to be, not to where it has been.” – Wayne Gretzky – Hockey Great
Extendicare Oakview Place Winnipeg
At Extendicare Oakview Place, we understand that each resident’s quality of life depends on an approach to care that combines input from residents and family members with individual assessments from a team of trained caregivers. This approach addresses the uniqueness of each resident. Extendicare Oakview Place encourages and supports open communication with families and addresses concerns with integrity, focusing on achieving customer satisfaction.
Situated in the west end of Winnipeg, we are an accredited 245-bed, multi-level home. Extendicare Oakview Place takes pride in offering superior care to our residents. With 24-hour nursing and supportive care, as well as in-house rehabilitation services, we strive for excellence in all we do.
Community partnerships in long-term carefocused initiatives and committees, ensures Extendicare Oakview Place is current in best practice.
Nursing Care
At Extendicare Oakview Place, we continue to enhance our skills and abilities to meet the increasing care needs of our residents, families and our community. Care is organized and available to our residents and is consistent with professional standards of practice that meet individual needs. Our nursing department’s aim is to provide a therapeutic environment that facilitates mutual care planning and goal setting and provides holistic care for our residents.
Extendicare Tuxedo Villa
Extendicare Tuxedo Villa was the proud recipient of the Extendicare President’s Safety Award in 2001 and 2003, and received the Extendicare Safety Management Award in 2004.
Situated in the south west end of Winnipeg, we are an accredited 213-bed, single storey home. The open concept design encourages freedom of movement and environmental interest for our residents. Extendicare Tuxedo Villa takes pride in recognizing our residents’ needs. With 24-hour professional nursing and supportive care, as well as in-house rehabilitation services, we strive for excellence 365 days a year.
At Extendicare Tuxedo Villa, we understand that each resident’s quality of life depends on an approach to care that combines input from residents and family members, with individual assessments from a multi-disciplinary team of trained caregivers. This approach addresses the uniqueness of each resident. Tuxedo Villa encourages and supports open communication with families and addresses concerns expeditiously, with the primary focus on achieving customer satisfaction.
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Riverbend Retirement Residence in Edmonton
Filed under: Alberta Seniors, Senior Housing, Senior Residences
Riverbend Retirement Residence offers comfortable retirement living in a safe and secure environment. In the serenity of your suite you can relax in peace and quiet, enjoying your privacy. When you’d like to socialize, step into our beautifully decorated common areas – join in an organized activity or simply relax and visit with friends. Meals are cheerful affairs, with much companionship, as you dine on nutritious tasty food prepared fresh daily and served by attentive staff. With our commitment to your safety, it’s comforting to know that at any time, night or day, if you need it, help is just steps away. Whatever your needs may be we can provide the service and care to fill your retirement years with comfort, security and peace of mind.
The caring, dedicated staff at Riverbend provides superior healthcare as part of our commitment to your continued well-being. We offer nursing supervision, medication administration, and many more services. You’ll have the comfort of knowing that our professional staff is on duty day and night and is always ready to provide friendly, attentive care. Riverbend offers the comfort and privacy of “protected” independence, freeing you from daily chores yet ensuring that assistance is readily available whenever it is required.
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Edgemont Retirement Residence in Calgary
The Edgemont Retirement Residence offers comfortable retirement living in a safe and secure environment. In the serenity of your suite you can relax in peace and quiet, enjoying your privacy. When you’d like to socialize, step into our beautifully decorated common areas – join in an organized activity or simply relax and visit with friends. Meals are cheerful affairs, with much companionship, as you dine on nutritious tasty food prepared fresh daily and served by attentive staff. With our commitment to your safety, it’s comforting to know that at any time, night or day, if you need it, help is just steps away. Whatever your needs may be, we can provide the service and care to fill your retirement years with comfort, security and peace of mind.
The Edgemont offers comfortable retirement living in a safe and secure environment. In the serenity of your suite you can relax in peace and quiet, enjoying your privacy. When you’d like to socialize, step into our beautifully decorated common areas – join in an organized activity or simply relax and visit with friends. Meals are cheerful affairs, with much companionship, as you dine on nutritious tasty food prepared fresh daily and served by attentive staff. With our commitment to your safety, it’s comforting to know that at any time, night or day, if you need it, help is just steps away. Whatever your needs may be, we can provide the service and care to fill your retirement years with comfort, security and peace of mind.