Canâ€™t Choose Your Family, But You Can Choose Your Seniors Living Operator
The biggest challenge for equity in seniors living in 2014 will be finding the right operators to do business with, The LaSalle Group regional director of development Matt Krummick tells us. This year the asset class started to stabilize, sparking lender interest in development and a flood of capital into the sector. But the barriers to entry on the development side are low, and everyone (including the inexperienced) is itching to build seniors living. (They all know they'll need it eventually.) The big barriers, often an unpleasant surprise, lie in operations. This is a concern for LaSalle, which operates seven suburban memory care facilities, since some new operators may not have the same cost basis or as high a level of clinical expertise, but he expects they'll eventually get flushed out and "the strong will survive."
As the market rebounds, Matt's tracking the economy closely. Seniors need assets like their homes or portfolios to draw from to pay the sizable costs of assisted and independent living, and higher values mean more people interested in making the big move. (LaSalle's Autumn Leaves facilities average $5,500 to $8,500 per month depending on room type.) LaSalle is building two new facilities in Glen Ellyn and Arlington Heights (above, snapped somewhere in the infinite blackness of outer space), both slated to open next year, with new projects brewing in Gurnee and a North Shore suburb. Matt's looking forward to spending New Year's in the Upper Peninsula, where his family celebrates twice on a lake that has two different time zones.