2014 was a banner year for senior housing, as low interest rates and increased demand for senior housing services helped propel development, asset values, and mergers and acquisitions in the space to ever greater heights. With the year winding down, providers and investors are now starting to look ahead to 2015, and many of them like what they see. A leading senior housing publication recently asked industry leaders for their thoughts on the future of the industry, and their responses indicate that providers are excited about next year and are looking forward to taking advantage of new opportunities that arise.
Providers Focus on Opportunities
One of the many opportunities in the industry that providers will focus on next year is post-acute care. The combination of an aging population and longer life spans has many providers excited about the anticipated growth in post-acute care needs. This includes people like Zeke Turner, the CEO of Mainstreet, who believes that post-acute care is “the greatest need in our market right now. It’s an emerging product, so it’s creating an opportunity to create demand in this industry, which has not been done in a very long time.” Mr. Turner is skeptical that everyone that aims for this segment of the market will be successful simply because post-acute care needs are growing. He scoffs at “groups that think they can just take an old product and somehow convert a wing or just do some sort of post-acute strategy inside of long-term care” and succeed at doing it. Mr. Turner believes that the most successful providers in the post-acute space will be those that create an innovative product that is narrowly tailored to this segment of the market and who can effectively market it.
Mr. Turner’s emphasis on innovation is shared by others in the industry such as Tana Gall, the president of Merrill Gardens. Ms. Gall believes that providers should strive for more creativity next year when developing products for their residents, particularly in areas like dining and wellness. For example, many facilities upgraded their kitchens and dining areas to help create a fine dining experience for their residents. Furthermore, when it comes to wellness, senior housing properties are increasingly looking for ways to stimulate their residents’ mental health, often by adding a wide range of activities to the calendar. Ms. Gall believes that new senior housing professionals who enter the industry with fresh ideas will be pivotal in developing the next wave of creative products, and she is especially excited that colleges throughout the country are now offering courses and degrees in senior living for students who would normally consider a career in hotels and hospitality.
These are just a couple of the opportunities that providers will try to take advantage of in 2015. Our next article will explore even more of them. Accordingly, industry participants who are seeking capital to position themselves for tomorrow’s opportunities today should contact the Chicago-based financing firm
Cambridge Realty Capital to learn more about the different financing options that it offers for a wide range of senior housing transactions.