2016 was a big year for senior housing, especially in regards to development and design trends. As we have discussed, the face of senior housing is changing in a major way, due in large part to the changing demographics. With more and more Baby Boomers entering into senior living facilities, providers are finding themselves in a position that requires more thought and changes based on resident needs and interests. Unfortunately, memory care and assisted living prices have risen in recent years, which is resulting in lower occupancy rates and facility operators scratching their heads about how to proceed.
Today, developers and senior living providers are needing to take a step back and look at how they are designing their facilities. Design is a critical element in today’s senior living market, as many residents are looking for facilities that offer technology and provide a higher quality of living. When it comes to the future of senior housing, it is imperative that operators are truly take a step back and thinking about y residents. We don’t expect senior housing development to slow anytime soon, but in order for operators to remain relevant and in the mix, they must reevaluate.
A couple of weeks ago we talked about why 2017 is the year to be different in senior housing, and that directly relates to what we are discussing here today. Gone are the days of cookie cutter senior living facilities – the ones that will be around for many years to come are thinking outside the box and paying attention to what people want in a long-term care facility. Some of the most important design and development trends in senior housing include:
- Being flexible with the design and development
- Adopting an open floor plan
- Consider dispersing activity rooms throughout the community
- Cater to resident interests and needs
- Offering boutique amenities (such as interactive meal experiences, multiple spaces for dining, flexible hours, and so on)
- Strong use of color and designs inspired by nature
These are just a few of the design and development trends we expect to see in the coming year. If you have any input or would like to discuss the market, please do not hesitate to contact Shep Roylance of The JCH Group.
Over the last several weeks we have discussed some of the top trends in senior housing in 2017 as well as the fact that renovating long-term living facilities should be viewed as an investment. If you recall, we talked about how skilled nursing facilities (SNFs) will begin to differentiate themselves from other senior living communities and they will also make adjustments based on resident needs. These are both important trends that we will be keeping a watch on as the year progresses.
Along those same lines, industry experts are predicting more mergers and acquisitions (M&A) in senior housing in the coming year. As many of you are probably aware, M&A are no stranger to the senior living industry. In 2014 alone, M&A in senior housing reached over $16 billion and continued throughout 2016. That being said, changes may be coming in this area. This is due to numerous factors, including:
- Real Estate Investment Trusts (REITs) are becoming less acquisitive, which is opening the door for private equity, local, and smaller operators
- M&A are often propelled by a strong economy, favorable demographics, and looking to the future
- Senior housing costs may increase, providing opportunities for providers to work together in order to meet industry demands
It is also important to note that because seniors have so many options when it comes to senior living communities these days, many facilities are having a hard time attracting people. This is a perfect example of when an M&A may be the right move for all parties. If two or more facilities are experiencing low occupancy rates, can’t afford renovations, and are at risk of falling behind and losing residents, it may be time to consider an M&A. It is important that senior living providers are looking at all their options and making decisions that are best for the residents and facility operator alike. These days it is more important than ever for providers to pay close attention to how money is being spent and and listen to resident demands. Senior living residents are more inclined to choose a facility that offers the latest technological services, high-end care, and top-notch wellness services.
To learn more about M&A in senior living or to discuss investment opportunities, please do not hesitate to contact Shep Roylance of The JCH Group today.
At the end of 2016 we discussed some of the trends in senior housing we expect 2017 to bring, and today we are going to expand on those thoughts a little bit. It is no secret that the long-term care and senior housing industry is currently in a transition period, especially because of changing resident needs and desires. As we went over last week, senior housing developers and owners alike are realizing that renovations are the key to success. In order to compete with new facilities, older senior housing communities must act now and understand that renovations are a long-term investment and should integrate features and amenities that speak to the future.
Renovations – And So Much More
With this in mind, today we are going to look at what 2017 is the year for skilled nursing facilities (SNFs) to differentiate themselves from the rest. As you can see, last week’s blog about renovations and this week’s topic go hand-in-hand. In order for senior living providers to keep up with the increased competitiveness of the industry, they must do what they can to differentiate themselves. Most people make the decision to move into an assisted living community because they are in need of assistance of activities of daily living, which includes bathing, toileting, and eating. Providers should keep this mind moving forward and truly work towards creating an environment that will provide these duties, while also focusing on aesthetics and extra amenities. Technology is obviously a major factor that needs to be addressed as communities renovate and rebuild, as is the changing interests of residents.
The Competitive Advantage
The fact of the matter is that all senior housing providers want to build a facility that can stand on its own two feet and compete with the best of the best. Most residents choose one community to spend the rest of their time in, which means this is not a decision that is made lightly. In order to truly compete with brand new facilities and showcase yourself as a community that has it all, providers need to conduct market research, look at their competitors, and go into the market with a stronger message. We do not expect the competitive nature of the industry to slow in anyway throughout the next year, which is a big reminder for SNFs to step up their game.
With this, we also expect to see more mergers and acquisitions (M&A) in the senior housing industry in 2017. While transaction volume slowed in 2016, there is a lot of talk that deal-making and senior housing investments will make a comeback this year. Because interest rates are expected to rise, some believe this will encourage more M&A. Check back next week for a more in-depth look at M&A in senior housing and what this could mean for the coming year. As always, if you have any questions about today’s blog or would like to discuss investment opportunities in senior housing, please contact Shep Roylance of The JCH Senior Housing Group.
One of the best things older senior living communities can do in order to bring in residents – and beat out competitors – is to undergo renovations. As we see more regulations concerning floor plans and room sizes in senior living communities put in place, this will become even more important. The senior housing industry is currently in a transitional phase, due in large part to changes in demographics and the rise in technology. With this in mind, many facilities are undergoing renovations in order to meet the demands of residents – and appease regulators and investors at the same time.
Many within the industry are predicting a “flashier” senior housing industry in the coming year, as numerous facilities are undergoing major renovations in order to meet the demands of residents, and our changing society as a whole. As many senior living communities are experiencing occupancy issues, it is no wonder why renovations are popping up everything. In order to keep from losing residents to newer, fancier facilities, nursing homes must take action now and understand that renovating is a long-term investment. By planning ahead and looking at what other facilities are doing in the area, you can be better prepared for the future.
Renovating – Not Just a Question of Structural Integrity
It is also important to note that when talking about senior living renovations, we are not simply referring a given facility’s structural integrity. SNFs must also consider renovating their marketing tactics and practices for attracting new residents. Many communities are having success with advertising not only the current amenities, but what is to come. Most seniors looking for a long-term care facility plan to only move once, which means they could spend upwards of a decade (or longer) in the community. With this in mind, it is a good idea to advertise what is coming in the next couple of years. People – and investors- are more likely to be attracted to facilities that have a plan for the future that includes at least some glitz and glamour.
When renovating, communities should make sure they are not simply going for a “quick fix”, but spending the time and money necessary to ensure the end product is an excellent one. Look at the competition in your area and see what others are doing. Senior living communities of today are modern, sleek, and feature far more than a nice dining room and library for residents. Think big and remember – your residents are changing just as our society is. People want to remain connected and are looking for a community that will provide them with the same luxuries they had at home. For more information on why renovating senior living communities is an investment, or anything else related to senior living, please do not hesitate to contact Shep Roylance today.