Growing old in style is getting expensive

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It looks like there is good money to be made in providing “assisted senior citizen” communities.

Sunrise Senior Living, the biggest U.S. operator of assisted and independent senior citizen communities, predicts 15 percent to 20 percent growth in earnings per share for 2007, and said that he could sustain that growth for the near future.

"We see ourselves having a mid- teens growth rate," said Klaassen (CEO and joint-founder), who began the company with his wife in 1981 at the age of 23. Revenue at Sunrise grew 26 percent to $1.8 billion in 2005, while net income rose 57 percent to $80 million.

Aging baby boomers and an elderly population in the United States make for a lucrative potential market. So-called assisted and independent living models, which provide meals, help with everyday tasks and some medical care, have become a more popular alternative to nursing homes, analysts said.

The average costs for a one-bedroom unit in an assisted living facility in the United States rose 7 percent in 2006 to about $33,000 a year, compared with a 5 percent rise in 2005, according to Genworth Financial.

Sunrise is marketing to retirees who are even wealthier, with average yearly costs to residents now about $48,000 a year. "Even the top 60 percent of America can easily afford private-pay senior living," Klaassen said. "Many people are moving in with incomes of only $15,000 to $20,000, but they are tapping into their net worth" - in most cases, the value of their homes.

Sunrise is also growing abroad, with operations in the Britain and Germany. About a third of the company's new constructive starts are in Europe.Dick Stroud