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 >
I thought I’d write a blog about some good news, at least for multi-family developers. No, costs aren’t coming down, nor are interest rates. But rents for multifamily are going up! According to rent.com through April 2022 apartment rents nationwide for two bedroom apartments are up 22.8% in a twelve month period. In some areas that are close to us they are up even more. Orlando rents are up 38.2%. Cincinnati is 37.8%.
So while costs are up and interest rates are threatening to rise, rents in many areas more than make up for this, creating opportunity. Rent.com goes on to say that the shortage of supply coupled with increasing demand and increasing inability of people to purchase homes is causing this phenomenon.
Good news for multifamily developers.
... Read More >
The multi-family market has certainly evolved over the last several years. From the types of amenities renters demand, to an influx of new single family build to rent communities. Not to mention the changing renter demographic. While millennials make up one of the largest rental cohorts, the age 55+ Baby Boomers are selling their homes and opting for a more convenient lifestyle.
According to Forbes, in the last decade, the multifamily market has experienced hyper growth. Even during the pandemic, 2020 saw a 50% increase in multifamily units, compared to that of 2019. Rents in multifamily housing markets have continued to climb. Yardi Matrix reported in February that year over year rent growth increased 15.4% and occupancy rates of 96.9%, surpassing the previous record of 96.5% in 2000.
Today’s renters are demanding more and different amenities. This includes everything from storage areas or lockers for packages, trash valet services, community dog parks... 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 >
As I talk with both senior living and multi-family developers, there is a big focus and many questions relating to “active adult” or “age-restricted’ apartments. It makes sense for many reasons, but the average age of entry stands out the most. Today the average age at which a person moves into traditional senior housing is 85, with an average length of stay just over six years.
The move-in age for active adult communities is in the low to mid-70's. The oldest members of the baby boomer generation, those born in 1946, are just now turning 74. This creates a true opportunity to capture a younger senior demographic ten years earlier than traditional senior living facilities.
Boomers considering active adult communities prefer renting over owning to provide them with economic and logistical flexibility. They are attracted by a sense of community and are healthy enough to not need traditional care-based senior housing. At... Read More >
I learned early in my career how little I know. Though we have built more senior living than anyone I know and have been exposed to very successful senior living developers and operators, they all operate differently. Someone recently said to me, “An expert is someone who knows more and more about less and less until eventually, he knows everything about nothing.” But I don’t think that is the case in my situation. It’s just that there are a lot of ways to be successful if you know what your Hedgehog Concept is, as Jim Collins would say.
Mid-market became a newer thing a couple of years ago. They often say what is old is new, and this might be one of those situations. We, in conjunction with a number of clients, are working on several mid-market concepts. They hearken back to the eighties when this industry was starting, and people’s... Read More >
The “Silver Tsunami” of Baby Boomers is not knocking on the door of assisted living communities just yet and still has several years to go before they are. So how are senior living developers going to entice these folks to leave their homes?
A recent article in Senior Housing News noted that in a survey of 120 senior housing professionals, 87% of them responded that they are currently pursuing active adult apartment projects. They see the need for a stepping stone so to speak; getting seniors to leave their homes that are nowhere near ready to move into an Independent Living community much less an Assisted Living community. Seniors in this segment are still looking for active, vibrant lives and are not ready to see what the future looks like by living in communities where they would see just that.
If seniors can stay in place longer in these communities with the... Read More >
One thing was clear at the National Investment Center for Senior Housing (NIC) fall conference that was held recently in Chicago. The interest in senior housing continues to grow. With more than 3,300 attendees at NIC, it was a whirlwind of activity meeting with developers, operators, equity providers and lenders, all who are optimistic about the future for new development in senior housing.
There seems to be no limit to the private equity that is available to experienced developers who along with their operating partners have a solid track record. Private equity funds that target the senior housing sector raised more money in 2018 than at any time before, with more than $15 Billion raised. This is up from the previous record of $10.8 Billion raised in 2015.
This high level of interest in senior housing can be supported by the fact that the number of Americans age 65 and above is... Read More >
As the baby boomer generation begins turning 70, senior living providers will have tremendous opportunities. At the same time, they will face the challenge of reinventing their business and providing innovative solutions to meet the needs and demands of this new generation.
Today’s seniors are looking for options that deliver the comforts and amenities of home. This trend is changing the design and construction of senior living communities. Designers are incorporating more residential design elements and finishes into new buildings, resulting in vibrant and comfortable spaces that are very inviting for residents. The buildings being designed and constructed today are not your father’s senior living facility.
By involving a general contractor very early in the planning process, working collaboratively with the design team, an owner can understand costs, lead times and constructability of various design components, and have the ability to make timely decisions. The general contractor can also provide potential alternative options... Read More >
The Interface Conference in Atlanta proposed some interesting questions with possible answers. Everyone talks about the first baby boomers turning 72, intimating that this is a positive for senior living. But the average entry age for senior living properties is about 85, depending on who you talk to, so there is a long time to wait for the first baby boomer. Not surprisingly, developers are starting to think about how to attract baby boomer retirees. Minimal, à la carte services in an affordable, yet reasonably sized apartment is one. Home health care can be layered on at a later date. One provider is using food trucks for his kitchen, a different truck, with different types of food every night. It’s amazing to me to see the number of people my age retiring. Though they are closer to 60, there is a discussion of downsizing, lower maintenance, more freedom, and more... Read More >
The baby boomers, the massive increase in births that occurred between 1945 and 1964, started turning 65 in 2011. The population of people over 65 stood at just over 41 million people in 2011. With approximately 10,000 people turning 65 each day, the over-65 population is projected to grow to over 85 million by 2050.
The baby boomers have shaped the housing market for many years, and as baby boomers approach retirement, there is no doubt, they will shape the senior housing market for years into the future. Market studies indicate that as baby boomer age, they want to maintain an active lifestyle either within their own community, or a community near their adult children. While many seniors prefer to stay in their homes as long as possible, a higher percentage of the baby boomer generation, compared to the previous generation, desire an easier “carefree” lifestyle.
Senior (age restricted) apartment communities, villas,... Read More >
Lately, as I talk with our senior living clients, many of them seem to be thinking about the same challenge. Similarly, that same challenge seems to be the topic of seminars at recent industry conferences, as well as the subject of several articles published in many of the trade magazines. How do we provide senior living solutions to the middle market?
For much of the past thirty-five-plus years, development and growth of the senior living industry have been off the charts. Everyone understands that as the baby boomers age, we will be hard-pressed to meet the demand, however currently there continues to be concern and discussion that the market is becoming overbuilt. But upon further study, one will quickly discover that most of the growth and development has been either on the high-end or on the affordable/subsidized end of the market. Very little new development has been targeted at the middle... Read More >