In addition to the information relayed at the National Investment Center for Seniors Housing and Care’s (NIC) annual conference on the concentration of new assisted living developments in a few areas, it is worth noting that, amongst the different senior housing categories, memory care is experiencing the most construction on a percentage basis. This is partially due to low interest rates, which developers are taking advantage of to lower their construction costs. Accordingly, while interest rates remain low, senior housing providers and investors seeking capital to acquire some of these new properties, refinance debt, or for other purposes should contact Cambridge Realty Capital to learn more about the different financing options it offers for a wide variety of senior housing transactions.
Demographics Drive Demand
Similar to the situation with other senior housing categories, increased construction in the memory care segment is driven by the aging of the population and the difficulty that family members face in providing adequate care to relatives with dementia. As the adult children who care for parents with memory care issues get older themselves, they tend to assume more commitments within their own immediate families, and are not able to spend the kind of time or resources on their parents that they were able to in previous years.
This trend provides an opportunity for senior housing providers in the memory care sector, and they are taking advantage of it by ramping up construction. At a rate of 3.1 percent during the past 18 months, the construction of memory care communities is growing at a faster clip than other senior housing categories such as assisted living, independent living, skilled nursing, and continuing care retirement communities. In addition to developing entirely new memory care properties, senior housing providers are renovating existing communities and adding memory care units or wings to them.
The Future of Memory Care Development
Thanks to low interest rates and projected increases in demand for memory care services, large amounts of capital are entering this segment of the market. This will translate into even more development and further growth in memory care units. In situations such as this one, there is often the potential for supply to outstrip demand, which can result in losses for investors. However, those concerns are muted in this area, as evidenced by a NIC/NREI Special Survey Report in which 73 percent of respondents said they do not see oversaturation as an issue right now. Going forward, memory care construction should continue to advance, and investors and others seeking capital to take advantage of this dynamic should continue to look to Cambridge Realty Capital for assistance in financing acquisitions and other senior housing transactions.