Property managers: Do you want to distinguish yourself from the competition, while gaining an advantage in a growing niche? If so, you may want to consider the senior housing market.
A recent survey from Lancaster Pollard, an investment banking firm focused on senior housing developments, found that 75% of senior housing executives were "extremely likely" or "somewhat likely" to pursue a new construction project within the next year. Even though surging construction costs are beginning to have an impact, this number is even higher than it was in 2015, when 70% of senior housing executives said they were likely to construct new facilities.
What does this mean for you? Well, someone is going to have to manage all of these properties and this could be a great opportunity for you.
The senior housing market represents a spectrum of housing types:
While some of these niches require staff to have special licensure and clinical knowledge, many are accessible to conventional property managers who are willing to invest in marketing efforts to pursue these opportunities.
As it stands, occupancy rates among existing senior housing facilities have been at 90% for some time, and are trending even higher—as anyone who has tried to find senior housing for an aging relative in recent years can attest.
As of December 2016, 72% of senior housing executives reported that their buildings' average occupancy rate was at or above 90%. Another 24% reported occupancy rates of 80–89% Only a small handful were below 80%, and many of these facilities reported low rates because they were newly built or undergoing renovations.
A strong majority of those executives polled (62%) reported that affordable housing would be leading senior housing market growth over the next year, while another 45% expect major growth in more specialized Alzheimer's and memory care facilities. Assisted and independent living were close to tied (42% and 40%, respectively), followed by continuing care retirement communities at 36%.
However, 44% of them have actual assisted living construction projects planned, and another 40% have Alzheimer's/memory care facility construction projects in the works for the next twelve months. Independent living facilities are next at 31%. Only 11% have actual shovels in the earth building affordable senior housing projects. Managers looking for clients—and who have the ability to staff up quickly—should be looking at assisted living facilities, who should have a bunch of projects nearing completion over the next 48–36 months. Landlords might consider building or converting to affordable senior housing spaces if they want to tap an underserved market with high demand.
If you've ever visited a loved one in a cold, clinical senior care setting and have a bad taste in your mouth because of it, forget what you know. Today's seniors and their families are demanding better options, and apartment managers are meeting their needs, distinguishing themselves from the competition with a variety of imaginative amenities.
Some complexes, for example, figured out that several residents in their communities really missed having the ability to tinker on projects in their garages, so they built a community workshop facility. Some facilities have kitchens and offer meal plans for residents who have trouble cooking for themselves.
Other in-demand amenities include the following:
As the senior housing market develops, we are seeing the formation of increasingly specialized communities. Many property managers in the senior housing industry are positioning themselves to attract special interest and niche communities.
One facility, Aegis Gardens in Fremont, CA, largely caters to Asian residents. Staff members speak English and Chinese, architecture reflects the Chinese feng shui tradition, and the facility sponsors on-site activities like tai chi and calligraphy.
ShantiNiketan in Tavares, FL is a specialized retirement community for Indian residents, marketed as an affordable alternative to retirement back in India. It's currently expanding to other cities across the United States.
Burbank Senior Artists Colony brings aging artists and writers together to cultivate their creative passions in their golden years. The facility has a 40-seat theater, a library, studio space, classrooms, and galleries.
Other senior housing facilities are now differentiating themselves by marketing to the LGBTQ community, RV enthusiasts, and more.
With Baby Boomers now reaching their retirement years—and doing so as the healthiest and most active generation in history—property managers willing to take on the challenge have limitless opportunities to discover new and rewarding markets within the senior housing industry.