It’s always made good investment sense to keep an eye on the demands and demographics of the Baby Boomers. Boomers have always been leaders when it comes to consumer trends and that still holds true when it comes to the 4 major types of senior housing, which are evolving to meet their interests and needs.
Born between 1946 and 1964, the generation peaked at 78.8 million, the biggest in history. It saw the development of suburbs, the rise of television and rock music, the conflict over the Vietnam war, the growth of women in the workplace, the desire for designer names on consumer goods, the creation of the internet and cell phones, and other age-specific trends too numerous to mention. At every age, Boomers have been the dominant consumer group, which means products and services have followed.
Now, they are retiring. The oldest Boomers today are 72; the youngest, 56; the U.S. Census Bureau predicts that the 65-and-older population will number 75.5 million by 2030. The need for senior housing of all kinds is increasing – which means that as an investment, its appeal is growing.
“This explosion in the aging population, the variety of seniors housing property types, and the strong return on investment make seniors housing one of the ‘expected best bets’ for 2018,” says the National Investment Center for Seniors Housing & Care (NIC), responding to the industry publication Emerging Trends in Real Estate, recently released by the Urban Land Institute and PwC.
4 Evolving Types of Senior Housing
There are several types of senior housing. Which is a good fit for you, investment-wise? Here’s a look at what’s different about them.
Seniors in independent living need little or no assistance. They simply desire a smaller, maintenance-free home that leaves them free to pursue their interests and travel. The communities can be set up as duplexes, cluster homes or apartment complexes; residences can be furnished or unfurnished. Shared social activities and excursions are typical, and communal areas like fitness centers, pubs, libraries, movie theaters, and computer centers are becoming common. Easy access to restaurants, museums, shopping areas, and sports and entertainment venues is a plus. (Remember, the Baby Boomers have been creators of and participators in the trends of nutrition, fitness, education, media, technology, fashion and entertainment; they don’t plan to live without these things in retirement.) Some communities have a built-in transition to assisted living areas when that move is desired.
Residents in assisted living can still operate independently in some ways, but may need help with daily living services like transportation, laundry, meal preparation, personal care, and in taking prescription medicine. As in independent living, these centers have plenty of amenities, including cafes, salons, pools and bars; there may be delis, wellness centers, and access to a spa. Apartments often have call buttons so that residents can summon a skilled worker quickly when needed. The level of medical care available changes from facility to facility, but all provide at least light medical assistance.
Memory care facilities specialize in residents who have dementia, Alzheimer’s disease or other progressive memory conditions. Residents typically live on a specific floor or in a specific wing of a residential center and have access to 24-hour supervised care. Everything from the architecture and décor to residents’ daily routines is set up to help them feel comfortable (and to minimize such behaviors as wandering). Such services as personal care and progressive medical needs are within the scope of memory care staff workers.
Skilled Nursing Care
There can be both temporary and long-term residents in skilled nursing care facilities. Temporary residents are often there to recover and rehabilitate after injuries or illnesses, while long-term residents may require daily personal hygiene and medical care in addition to meals and laundry. This is the type of facility that used to be called “nursing homes.” It is common to have communal dining rooms and television rooms, as well as physical and occupational therapy onsite as part of any rehabilitation facilities. Residents in skilled nursing participate in fewer planned social activities and are not independent. A doctor may visit daily, and there usually is at least one nurse on duty at all times.
The 2018 J.D. Power Senior Living Study estimates that the independent and assisted living industry is growing by nearly five percent a year, and that the total size of the market by 2019 will be $59 billion.
“It’s no secret that seniors housing is in high demand, with the independent and assisted living subsets the most desirable,” says National Real Estate Investor (NREI), which asked housing and investment experts about the top regions in the country for development in senior housing. Their mentions included Arizona; Seattle; Maine; San Diego and San Francisco in California; and Tampa and Orlando in Florida. But to say those are the only areas worth investing in is a vast overstatement.
“People get old everywhere today,” says David Rothschild, executive managing director for the senior living group at real estate services firm Cushman & Wakefield. “The demographics are pretty overwhelming.”