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Senior Housing > Blog > 2017 > August

Is Aging in Luxury the Next Big Trend

There are many changes coming to the senior housing industry, from more walkable quarters to communities that embrace technology. Another trend that we see creeping over the horizon is what many are calling “aging in luxury”. While many people view entering a senior living facility as an opportunity to downsize and get back to the basics, there is a whole other group of aging Americans that are taking a different approach. Developers across the country are catering to residents who are looking for high-end assisted living experiences, something that directly reflects our nation’s changing demographics.

Some of the first developments of this kind are popping up all over New York City, namely in Manhattan, with developers across the U.S. eyeing various locations that could also support high-end senior living communities. In Manhattan, developers have already spent hundreds of millions on high-end senior housing projects in the hopes that affluent and aging seniors in big cities will be drawn to this new concept. Experts predict that many Baby Boomers living in these areas would rather not leave their neighborhoods, as it could impact their cognitive abilities. With this in mind, senior housing developers are aiming to attract residents that are willing to pay to “age in luxury”.

What Are the Risks?

These new developments range anywhere from $12,000 to $20,000 per month in rent, a costly price that not many can afford. However, with the hefty price tags comes comfort, luxury, and all the amenities and space you could ever hope for. These units will undoubtedly boast uniformed doormen, beautifully landscaped gardens, and stunning architecture, but they will also offer special features that speak to the needs of seniors, such as brightly colored walls to support those with poor eyesight and lighting aimed to promote sleep.

Of course, the risk is that there won’t be enough residents interested – or able to afford – these luxury living apartments. In Manhattan, in particular, there are simply not enough memory care facilities to house senior adults with Alzheimer’s or other forms of dementia. These new luxury assisted living facilities are opening at a time where the market is oversaturated and we are seeing more and more people need this level of care. People in big cities like New York and Los Angeles are accustomed to a certain quality of life, and the majority of senior living communities frankly cannot live up to their expectations. They are not willing to compromise, creating the need for high-end developments like these.

In the past senior housing has largely been suburban-focused, but as we recently discussed, more people are interested in facilities that are both walkable and modern. As of right now it is too early to predict how these luxury assisted living facilities will fare, but it’s safe to say there is a market for it and we may soon begin to see more costly communities pop up across cities in the U.S. For more information on the current state of senior housing or if you are considering investing in a skilled nursing facility, please do not hesitate to contact Shep Roylance of The JCH Group.

Senior Housing Brokers May Be Busy, Thanks to Investors

According to a survey by the National Real Estate Investor (NREI)/National investment for Seniors Housing & Care (NIC) Seniors Housing Market, the remainder of 2017 is expected to be busy for senior housing brokers. The survey indicated that nearly half of the investors polled plan to invest in senior housing properties within the next 12 months. This is an increase of 9% from respondents who were polled on the same question this time last year. In addition, 11% of senior housing property owners plan to sell in the next year, while 42% say they will be holding on to their facilities.

One of the driving factors behind the responses from pollsters is the fact that many believe senior housing prices will drop. Throughout the last year, senior housing investments have remained steady and even dropped 1.5%  in the second quarter of the year. However, it is important to note that is still a 6% increase from where prices were at this time in 2016. Nonetheless, senior housing dealmakers are preparing for an influx of investors as more properties become available.

Why Now?

One of the main questions senior housing developers are asking regarding this change is, “why now?” For one, approximately 95% of all senior housing deals that closed in the second quarter of 2017 were for $50 million or less, which is a substantial number. In fact, there hasn’t been that margin of deals closed in that price range since 2010. This means that senior housing prices remain competitive as we continue to see more and more properties hit the market. This is presenting a unique opportunity for investors – one that we are going to keep our eye on. While prices remain steady and we are seeing interest among dealmakers and investors alike, it is important to pay attention to the trends. We are seeing bids from different sources than we have in the past – namely private equity and smaller private buyers.

So while public real estate investment trusts (REITs) may not be in the spotlight when it comes to senior housing investment, there is plenty of interest. If demand remains strong (as we predict it will) and investors have the capital, you can expect to see more senior housing facilities trade hands. To learn more about the current state of the senior living industry or if you are interested in investing in a senior housing property, please contact Shep Roylance of The JCH Group.

Walkability and Tech Are Leading Senior Housing Trends

It’s no secret that the senior housing industry is in a major transition period right now. From the changing demographics to the fact that technology is making its way into all aspects of our lives, it is no wonder the senior living industry has had to adjust. As we’ve discussed over the last several months, there are numerous ways the industry is adjusting to this new generation of residents – namely when it comes to the type of care being administered. With this, it is also important to point out that various trends in senior housing are on the rise, thanks in large part to new expectations from residents.

Thanks to resident expectations and changing needs, one of the number one trends we are seeing right now is open floor plans and walkable communities. Gone are the days of residents looking for isolated, rural communities – today’s seniors have different priorities. Walkability has become a hot topic amongst senior housing providers and developers in recent months. According to a recent survey, a vast majority of seniors are more interested in assisted or independent living communities that offer proximity to transportation in urban neighborhoods. As our health needs and expectations have changed over the years, so have people’s housing needs and desires. Baby Boomers are not ‘throwing in the towel’ so to speak when it comes to their senior housing decision. They are taking their time and due diligence to find a place that meets their needs – both in wellness and social.

The Stats

In the survey mentioned above, approximately 11% of seniors said neighborhood was a top priority when it came to selecting a senior living community. While this may not be a large percentage, the number of residents who find neighborhood and location important is on the rise. The growing appeal of urban-based senior living communities is something providers and developers alike are taking note of. Walkability has become a top priority, and communities must adjust if they are going to attract residents moving forward.

Between the impact technology is having on the senior living community and changing resident needs as mentioned above, senior living providers certainly have their work cut out for them. To learn more about the current state of the senior housing industry or if you are interested in investing in a property, please do not hesitate to contact Shep Roylance of The JCH Group.