Three Trends to Watch in Senior Housing
Senior housing developers have picked up the pace of new projects in the last 18 months as investors see the aging population (with disposable income) as an attractive market. We found three things to watch in the senior housing market.
1) Assisted Living & Memory Care
Lancaster Pollard managing director for M&A in senior housing Stephen Graham tells us that the senior housing market remained steady during the downtown, but activity has picked up, especially in the assisted living and memory care areas because there’s not enough supply to meet the demand. The least amount has been in the nursing home realm, largely because of the uncertainty with the reimbursement environment. Big changes in the last 24 months make the investment market a little anxious about how that will impact the operators, he tells us.
2) Higher Occupancy
Vacancies are shrinking and because the senior housing market held steady during the recession, investors and capital providers are taking note, he tells us. (None of us are getting younger.) The lower cost of capital, overall, also impacts mergers and acquisitions, of which Steve is seeing a steady stream.
The strongest areas remain in the Sunbelt: Texas, Arizona, Florida, and California, Steve tells us. But, senior housing projects do well in urban, rural, and tertiary markets because most people transition to a retirement environment near home. When he’s not financing deals, Steve likes to play the guitar ('70s music is his fave) and he dabbles in photography. He started with sports while his kids were in high school.