Florida Retirement Community Hits Bond Market for New Tower

Shell Point Retirement Community — a Florida continuing care retirement community that provides independent living, assisted living, skilled nursing — is preparing to borrow up to $275 million to construct a new tower and 125,000-square-foot community center and market.

The project, called Vista Cay, is getting financing through bonds issued with the Lee County Industrial Development Authority. The project will include a 14-story building with about 270,000 square feet for independent living groups and a 150,000-square-foot, 4-story “town center” building.

According to Shell Point, the project will offer 58 units from “lofts with soaring ceilings to midrise residences offering designer finishes and penthouses featuring expansive floorplans.”

Independent living has become a financially important aspect of senior housing. Fitch Ratings in April released an analysis of how the ratio of skilled nursing facility in a life plan community (LPC) can affect financial performance.

“SNF-heavy LPCs, considered by Fitch as those LPCs where SNF beds comprise more than 20% of total units, experienced operational stress in Fitch’s rated portfolio in 2023, with labor costs, inflation, tighter reimbursement and heightened government oversight pressuring skilled nursing expenses and revenues,” they wrote.

Burke Rainey, Shell Point’s chief financial officer, told Bloomberg that more than half of the area’s population is over 65. About 70% of the addition in development is pre-sold. The company faced an $85 million impact from Hurricane Ian.

Wealthier residents can bear higher costs that can help underwrite other aspects of operations. The “entrance fees” for the units will run from $1.4 million to $2.5 million, with monthly fees from $6,250 to $10,235.

“Located alongside the Caloosahatchee River, Shell Point currently has 1,334 independent living, 356 assisted living units and 180 skilled nursing beds,” Bloomberg wrote. “It includes amenities like an 18-hole golf course and a 44,000 square-foot performing arts center.”

The surrounding area, Fort Myers Beach, has a median owner-occupied housing unit value of $538,600, according to the Census Bureau.

Bloomberg also noted that S&P Global Ratings affirmed Shell Point’s BBB+ rating on outstanding debt, said its forecast of 96% occupancy rates, “and called its forecast of at least 96% occupancy rates reasonable.” S&P noted the company’s “solid business position and the robust demand for independent living units” in March.