Senior Living: Structuring with an Investment Vision to Serve a Growing Market

The real estate market is undergoing a significant transformation with the rise of senior living—an emerging trend driven by the growth of the 65+ population and its increasing purchasing power. According to a report by Atlas Real Estate Analytics, this demographic is the only one to have experienced real gains in purchasing power over recent decades, making it a highly attractive target market for developers and investors.

(Source: atlas-reanalytics.com)

Senior living presents a modern alternative to traditional retirement homes, offering communities designed for active older adults seeking independence, comfort, and specialized services. This model has gained momentum in countries such as Spain, where the supply of senior living apartments is expected to double before the end of the decade—from 4,000 units currently in operation to approximately 8,000 by 2030.

(Source: Witei, Merca2.es)

Mexico has established itself as a preferred destination for retired Americans and Canadians, particularly in coastal regions such as Puerto Vallarta, Los Cabos, and La Paz. Puerto Vallarta, for example, is home to over 15,000 North American expatriates, drawn by its warm climate, high-quality medical services, and welcoming community. According to INEGI’s 2020 census, there are 12,439 Canadian citizens living in Mexico, with Jalisco being the state with the largest Canadian population. This trend has increased the demand for residential developments tailored to the needs of active older adults, creating a significant opportunity for senior living projects in the country.

To develop senior living projects, it is essential to establish a legal structure that facilitates investment attraction and business scalability. The Sociedad Anónima Promotora de Inversión (SAPI) is a suitable vehicle, as it allows for the issuance of different series and classes of shares—each representing distinct stages of the project, from inception through maturity to exit. This structure mirrors that used by startups, where concepts such as premoney and postmoney valuations are key to assessing the business before and after a capital raise, as detailed in Venture Deals by Brad Feld and Jason Mendelson.

Implementing a SAPI structure with clear corporate governance policies not only enables efficient operation and growth but also supports an orderly exit for early-stage investors. This exit may be executed through the sale of the project to a club deal—a structure made up of family offices, sophisticated investors, or small funds investing under similar theses. These entities particularly value well-defined legal structures, as they provide operational certainty and enable a smoother transition into the asset’s consolidation phase.

At Newlex, we bring experience in structuring these types of legal entities and in establishing corporate governance policies that foster investor confidence. Our comprehensive approach ensures that senior living projects are not only attractive in terms of design and services, but also in their legal and financial frameworks—contributing to the development of housing solutions that meet the demands of a growing demographic.

(Source: blog.4srealestate.com)