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Rosy Future For Healthcare Industry Is Bringing Everyone Into The Act

Senior Housing investors who are eager to fill the gap between supply and demand, expect to acquire more healthcare real estate as they look forward to growth through acquisition and development. Senior Living industry leaders see that the demand for senior housing is expected to grow as the population of older Americans is projected to double by 2050. That growth is sparking increased activity in the entire Healthcare market for Assisted living, independent living, Continuing care communities, Skilled Nursing facilities, and transitional post acute care facilities. The market for senior housing mergers and acquisitions continues to shatter records and expectations, making 2014 a landmark year for the Healthcare industry.

REITs, public and private equity firms and foreign investors are all competing for acquisition opportunities. According to statistics, more than 50%of the acquisitions are being completed by local and regional providers, 40% by publicly traded and national chains, and the rest by private equity and not-for-profit.  In 2013 non-traded REITs raised 20 billion in capital carving out their roles as significant players in senior housing figures. Non-traded REIT’s have raised approximately 11 billion year to date.   In 2014 the BIG THREE REIT’s have already acquired several billion dollar portfolio deals. Reported at the recent Chicago Nic Conference, the three REITs have been responsible for 7 billion of transactions year to date. A California based private equity firm is moving forward with plans to develop 750 million worth of new construction over the next three years for which it is enlisting foreign investors to help fund a portion of the pipeline.

The growing demand for Senior Housing includes seniors of varied financial capability. There is the demand for high end Assisted Living for the affluent, but there is also a growing need for low-to moderate income senior housing for those seniors with less financial resources. The gap in care offers the investor the opportunity to provide more affordable options not only for the 3.5 million seniors currently living below the poverty level, but also for the middle class Americans who are aging. Developers who formally sought inexpensive building sites, now are biting the head of the snake and building in highly regulated zoning areas like California and New York.

The future looks bright for the Healthcare Industry in the 21st century as we see increased investor interest in all types of Senior Housing. It is no longer viewed as an investment just in a singular property type, but as an accepted asset class in a “complex delivery of care”.

Tech-Savvy Seniors Demand Assisted Living Communities Keep Up With The Times

Demand driven providers are finding that no longer does a computer lab satisfy the requirement of tech-savvy residents.  Technology progresses so rapidly that many in their 70s, 80s and 90s in their own homes are accustomed to the latest technology.  They expect the same environment when they choose an Independent Living, Assisted Living or CCRC.  The affluent and technologically experienced Baby boomer generation is expected to be even more demanding.

Computer labs and business centers in senior housing communities are less important to senior living prospects today than they were two years ago according to Ziller Senior Marketing agency.  The growing number of seniors using mobile devices and going online antiquates the “computer room”.  Today’s senior goes on line every day, checks their email, uses an e-reader and an IPad.  Accustomed to having access to the world in their own home, they naturally seek the same environment in an Independent, Assisted Living or any type of Healthcare Facility.

THE NEW REALTY, WIFI IS A MUST

Senior communities that have upgraded their facilities to accommodate greater internet access by offering Wi-Fi have attracted the tech-savvy resident.  For example Texas-based Morningside Ministries offering Wi-Fi found that it was vastly important to resident satisfaction.  Morningside began to install Wi-Fi to all of its campuses and continues to add Wi-Fi to its buildings undergoing redevelopment and its cottage properties.  Residents use technology to check bank accounts, investments, retirement accounts, order products, print maps to travel, access books for their e-readers, or to access social media like Facebook.  Almost all use the technology to stay in touch with family members by e-mail.   Keeping up with the times, Emeritus, whose $2.8 billion merger with Brookdale Senior Living forms the largest senior living provider in the nation, has transformed common areas into Internet cafes.

THE NEW REALTY CREATES THE NEED FOR TECH-PARTNERS AND TECH SUPPORT

Implementing and improving technology in existing senior communities and in new development to   KEEP WITH THE TIMES it becomes necessary to have a tech partner and engage a staff tech support person. Only 40% of senior housing organizations have somebody who is head of technology.   Engaging with tech partners in the early stages of a development can refine the plan and design in the construction process to get the most out of the technological services.   Creating a position for a tech support staff member will ultimately help senior housing communities maximize their use of technology and their ability to provide technology services to all residents.

ONWARD AND UPWARD FOR A BETTER SENIOR WORLD THAT KEEPS UP WITH THE TIME!

NEW CONCEPT FOR ASSISTED LIVING, INDEPENDENT LIVING, SKILLED NURSING & COMMUNITY CARE RETIREMENT COMMUNITIES

The current Baby Boomer generation reaching retirement feels younger, will live longer and demands meaningful activities and experiences in a Retirement Home as they leave their careers and active social life behind them. They are still healthy, but their physical stamina has changed and requires some assistance or service. There are currently 78 million Baby Boomers in the U.S. and 8000 turn 65 everyday. They expect better housing and amenities in their first entry into an Assisted Living or Independent Living facility, even though eventually they require the same medical care & services as generations before them.

ASSISTED LIVING, INDEPENDENT LIVING, SKILLED NURSING FACILITIES MEET BABY BOOMERS DEMAND

Owner/operators must meet the demands of this “back to the dorm” crowd and compete for their considerable buying power. Not only do they need to invest in technologies that insure life safety but also in technologies that insure life quality.  These new technologies will emphasize life style and wellness. Owner/operators must adapt also to the current aging generation’s demand for diversity.  When first entering retirement the Boomer generation does not want to co-mingle with just Seniors.  They prefer to live in a community of diverse ages, allowing them to co-mingle with all ages:  youth, middle age, and older. To meet this demand, Community Care Retirement Community Developers are building their Independent Living Facilities and 55+ communities close to developments, which incorporate all ages.

Whether building a new community or adding to an established one, retirement facilities feature

  •         Neighborhoods for 55 plus
  •         Neighborhoods for single families within blocks
  •         Apartment complexes in another sector
  •         Community areas for all ages  (Parks, stores, recreation areas etc.)

Assisted Living and Skilled Nursing facilities are often found in the neighboring location completing the Continuing Care Retirement Community concept.

RESTRUCTURING OF BANKRUPT FACILITIES TO MEET THE NEW “BOOMER” DEMAND

Purchasing a troubled facility that has declared Bankruptcy in Chapter 11 creates an opportunity for the owner to restructure the facility to meet the new demands of the culture and the demands of the emerging Boomer generation. Improving the physical plant, adding amenities, services and new technology must be addressed in the restructure with emphasis on life style and wellness.

For counsel, acquisition or disposition of a Healthcare Facility you please contact Shep Roylance of JCH Consulting Group and Roylance Senior Housing, whose expertise and knowledge will guide you through a successful transaction in or out of Bankruptcy.

Shep Roylance –  Roylance Senior Housing, JCH Consulting Group    
Direct 805-633-4649      Cell 818 515-0530         Fax 805 392-5171       Email Shepshep@shepjch.cch