I never would have thought you would see a retirement home/assisted living high rise on Lake Shore Drive in Chicago, but apparently its coming soon. Today I came across an article from the NY Times called “Retirement Homes Go High-Rise” which describes a new waive of “high end” retirement communities that are starting to pop up in urban settings like Chicago, New York, and Dallas. While the buildings themselves may look like your typical high rise that we see in the city, they are regulated as insurance or health care products, depending on the state in which they are located. These communities must comply with licensing requirements for skilled nursing and residential care facilities. Officials also monitor the communities’ finances to ensure that providers can meet their service obligations.
According to the article, a couple in Chicago who is moving into a unit in The Clare (Model Pictured Above) will pay a $1 million entry fee for a 1,700-square-foot apartment on the 44th floor, with views of Lake Michigan. On top of the hefty entry fee there is also a $5,000 monthly fee, which covers one meal a day, maid service and utilities. What I thought was very interesting was that 90% of The Clare entry fee is refundable at the same rate to the resident’s estate should they chose to move out of the facility.
To the best of my knowledge there is no reverse mortgage product out there at the moment that would allow a reverse mortgage on something like this. Essentially the lender could use the entry fee as equity since it will be 90% refundable at the same rate when they chose to move out or pass away. The biggest issue would be what would happen if the project went under and your entry fee wasn?t there anymore? I haven’t seen any of the contracts for these units so I’m not really sure but I thought someone who reads this may have a better idea. Now I know a product like this is a long shot but I thought I would toss it out there and see what everyone’s response was. If you would like to read the entire article click the link below