Two weeks ago, I attended the National Investment Center for Seniors Housing & Care (NIC) in Washington, D.C. As always, it was good to see old friends and clients, and interesting to get a read on the industry. There were really no surprises, but it’s good to get intensive confirmation of what’s going on.
Senior living development is really a somewhat bifurcated proposition at this point. Though we are still building and have recently started a number of assisted living/memory care (AL/MC) projects, most of the developers are not bullish on this sector right now. Operating costs are up dramatically, interest rates and construction costs continue to rise, occupancies have not fully recovered, and rents have not yet risen to cover the increased expenses. There are some AL/MC developers that think that they just need to forge through, that it’s just a bump in the road and all will be good,... Read More >
Some developers and investors are unsure about committing to new senior living developments amid rising construction costs and interest rates, while others remain bullish on building new communities figuring that demand will be outpacing supply for the foreseeable future. I have even heard from some clients that they really push to get new developments going in this environment when other potential new projects may be holding off which gives them a leg up in a given market.
One segment that continues to gain steam is active adult according to a recent article in Seniors Housing Business’ April Edition. Active adult communities target those 55 years old and older that are ready to rid themselves of all things associated with home ownership, but are young and healthy enough that they don’t require assistance with daily living activities. These communities are not as labor- or service-based as an assisted living community because they... Read More >
Last month we wrote about how The Senior Housing Evolution Continues, specifically discussing the Active Adult concept. Last week, The Douglas Company attended an Active Adult conference hosted by Interface, where we heard from pioneers and visionary leaders in this new product. Three major conceptual questions stood out through all the sessions:
How to Define Active Adult?
While there is huge excitement about the space, there isn't a clear-cut, one-size-fits-all definition of what an "Active Adult" community really is, or for that matter, if the term "Active Adult" is going to stick. While time will probably resolve these issues, there is consensus on the place in the market - Seniors in their early 70s want to take advantage of the equity in their homes and sell them to downsize in an effort to reduce maintenance and find a new social circle. This is want-based, not need-based like other senior housing... Read More >
The resilience of active adult communities during the pandemic and resulting recession has resulted in many developers, operators, lenders, and equity investors taking another look at the product and determining how it fits their strategy for future growth.
Many skeptics have become supporters after seeing the performance turned in by active adult communities through 2020. Active adult rental properties were already among the senior housing product types with the strongest performance prior to Covid-19. But the segment outperformed all other types of senior housing during the pandemic according to data from Senior Housing News. Active adult communities are outpacing Independent Living and attracting a younger and healthier demographic.
At a recent Active Adult Virtual Summit hosted by The National Investment Center for Seniors Housing (NIC), they shared the belief that active adult is taking over the role that Independent Living played in the continuum of care 20 years ago. While dining... Read More >
A somewhat new segment of rental active adult housing is showing signs of leading the way for senior living development post COVID. Our estimating department is currently budgeting and pricing several active adult projects for multiple clients. The product targets baby boomers in early retirement, looking to downsize, but who are years away from needing independent living or assisted living services.
Many seniors no longer want the maintenance and overhead of a large house, like the idea of increased socialization, but don’t require assistance with activities of daily living. Active adult communities tend to command a premium over standard multi-family products, and because the residents are primarily retired, their incomes are somewhat insulated to swings in the job market and economy. Another plus for developers, residents of active adult communities typically stay for five years or longer.
While the pandemic has impacted occupancy in all senior living sectors, several owners and operators... Read More >