Senior housing loses steam to recession: while some major projects have opened, others have stalled due to the financing crunch and lower demand.

• Author: Lewis, David
• Position: [Q3] REAL ESTATE REPORT

Senior citizen developments take place at the intersection of two truisms: "demography is destiny," and "location, location, location."

Unfortunately, the economic meltdown has made mock of these truths, turning them into un-truisms.

Take the case of senior homes. On one hand, while residential and commercial real estate markets muddle through the downturn, communities targeted to senior living continue to pop up along the Front Range.

On the other, developers this year began to bow to economic pressures even greater than the economic and demographic forces that just a year or two ago seemed poised to push demand for senior development in Colorado ... forever.

A few examples:

In June 2008, Catonsville, Md.-based Erickson Retirement Communities, a nonprofit, announced plans for Tanglewood Creek. The development was to be a 67-acre senior community in Westminster. "Customer interest in the project to date has been extremely positive, with more than 1,600 people inquiring about Tanglewood Creek even before the Welcome Center opened for business and an additional 450 people requesting information since that time," a company press release says.

The demographic favored success, the company noted, since about" 194,000 people age 65 and older live within 25 miles of the site."

In the first quarter of 2009, after "due diligence and a look at the demographics, cost of construction and whatever, we decided not to pursue that one. Nothing ever really got off the board on that one," spokesman Mel Tansill says.

[ILLUSTRATION OMITTED]

When the economy heals, "We would like to revisit the possibility of another site in the Denver area at some point," Tansill says. "It may not be that specific locale, because our due diligence says it was not suitable."

Last year, Erickson says it had opened or planned 22 communities. This year, the number has declined to 19. One of those is Wind Crest, in Highlands Ranch, and more on that later.

This May, McClean, Va.-based Sunrise Senior Living Inc., a New York Stock Exchange-traded company, opened the lavish Stratford complex in Broomfield. Called by The New York Times "the industry's gold standard," that same month the company announced the resignation of its chief financial officer, while fending off stories that it would be forced into bankruptcy with the announcement that it had developed a plan to cut $20 million in non-health care overhead.

Sunrise Senior Living--with 435 senior communities and about 54,000...