Last week we authored a blog post looking back on pricing in 2020 and why the reduced pricing many of us were anticipating to come just never did. The question lingering for everyone in the industry now is: What's going to happen in 2021 for pricing? Many developments were put on hold last year in hopes of better pricing this year, but will that happen? To forecast this, we're looking at the state of 3 current events: The COVID-19 Vaccine, Material Supply and Demand, and Government Intervention.
While we cannot be a source of information on the status and timing of individuals being vaccinated, we know that at some point this year, all those who want to receive immunity from the vaccine will have that opportunity. Market information sources like NIC and Senior Care Investor all agree the outlook for senior housing is positive, and the decreases in censuses... Read More >
“Earlier this year, our President, Peter Douglas, posted a Blog pondering the question of how much construction prices would go down as a result of the impacts of COVID on our industry. At the time of the Blog (May 27, 2020), we were beginning to witness the relaxation of construction material prices, particularly lumber and subcontractors cutting their prices to book work for the unknown times that lie ahead. It was thought that this trend would continue during the pandemic and that overall construction prices could retreat 3-5%, a welcomed projection for many developers. Unfortunately, prices have not gone down the 3-5% as originally speculated. So what happened?
In the months following the posting of that blog, prices for construction materials and manufactured commercial building products increased due to the impact COVID had on production and transportation, compounded by demand, which remained relatively high throughout the pandemic. An unexpected rise in... Read More >
It’s hard to believe that it was in May that I blogged about being ready to “turn the corner” on everything that was impacting the country. I guess I was a little impatient. In the meantime, it is as we predicted that there would be some creative times ahead in the design and construction of senior living communities.
We have spoken with a lot of our colleagues in the senior living operations and design community in the last couple of months to learn about what they want to implement into their future projects to increase health and safety when a contagious health crisis such as Covid-19 hits. At the top of the list is upgraded HVAC systems to better filter airborne pathogens as well as increase fresh air circulation. A close second is UV technology to kill microbial particles (both incorporated into HVAC systems as well as other equipment options for... Read More >
Recently I had the privilege of participating in a design charrette for a new IL/AL/MC facility. Obviously the current pandemic is on everyone’s mind. No one knows when it will end, if the virus will morph and/or come back, or if we will someday need to deal with another similar crisis. So the decision was made by the client that the facility needed to be designed not only to protect the residents and staff but also in such a progressive manner that the operator could use this as a strategic advantage in the marketplace. Their concept is that they want to be known as a place safer than home-where professionals know how to keep you safe. In my experience, these discussions are just starting, so there is much to learn and will continue to be, but some of the ideas that came out were as follows:
- Electrostatic sanitation systems.
- Safe visitation areas.
- A... Read More >
The Covid-19 pandemic has impacted nearly everyone and somehow touched every aspect of the world in which we live. It will change many aspects of the senior housing industry, including not only the prospects for new development but the design and functionality of new senior living communities. While the ramifications both short and long term are still unclear, the pandemic will not change the vast wave of baby boomers who will provide steady demand growth for senior housing for several years beginning in 2022.
Most experts within the senior living industry continue to express optimism about the long term prospects for senior housing, and particularly the assisted living, memory care, independent living and active adult segments, all of which have experienced significantly fewer cases of Covid-19 than have been realized in skilled nursing communities.
As we begin to look to the future, it seems inevitable that Covid-19 will have a lasting impact... Read More >
As our country begins to transition back to a new level of normalcy, it brings to light how fortunate we were to be able to continue to work relatively unscathed throughout the COVID-19 pandemic, allowing us to fulfill our core purpose to contribute to the success of our clients and associates. While there is a lot of uncertainty about what all of the long term impacts this crisis will bring, I believe that it is fair to assume there will be some changes to our industry moving forward as a result of the past few months.
The virus has brought to focus on the importance of worker health and safety on our job sites, while some of the policies are tedious, it is better to be safe than sorry. It will be important to continue practicing these policies moving forward into the future to help mitigate any future waves of... Read More >
The current slowdown is unfortunate in its cause, with all of the people suffering from the virus. It is hugely disruptive to all of us both professionally and personally, but it is the reality. Though this arose fairly quickly, our clients are intelligent, optimistic, and focused and are already asking how much prices are going to come down and when.
The best predictor of the future is usually the past, so I did some research. RS Means, a widely respected resource for pricing in our industry, reports that the 2008-2010 recession had stable pricing, not decreasing. I think we all know this isn’t right, so I checked the Turner Construction Company historical index. It seems more realistic, reporting an 8.4% decrease in construction costs in 2009 and a 4.0% decrease in 2010 for a total of 12.4% This seems more accurate. All recessions are different. There was a milder recession in... Read More >