How to understand consumer behavior to innovate senior living. 

About 19 million people belong to the silent generation (born 1928-1945). They are the senior living customers of today. Compare that to the 70 million baby boomers (born 1946-1964) just starting to enter the pool of potential residents.  

The groups are quite different, and not only in size. The silent generation (age 77-94) is often characterized as thrifty, respectful, unassuming, and loyal. Baby boomers (age 58-76) are portrayed as demanding, self-assured, independent, and competitive.  

A well-attended educational session at the 2022 NIC Fall Conference addressed the challenge to understand the differences between the silent and baby boomer generations and how that impacts the senior living industry.  

“Do we really understand our consumer?” asked Joe Daniels, panel moderator, and vice president at Direct Supply. “We have the opportunity to do things differently.” 

Daniels was joined on the panel by several experts. They agreed that the industry must adopt a more customer-centric approach, especially to attract boomers. Marketing campaigns should micro target the local population, which can vary widely from place to place.  

“It’s crucial to dive into the details,” said Arick Morton, CEO at NIC MAP Vision. “Who is really your customer?” He suggested using county-level psychographic, age and income data to understand the local customer base.

Operators need to curate an experience, tailored by market, showcasing a vibrant lifestyle to entice baby boomers to move sooner rather than later, according to panelist Traci Bild. The experience starts with the marketing process. “Be empathetic, listen, slow down,” advised Bild, chief visionary officer at Bild & Co. “Change the customer experience and how you make people feel.”  

Think about your own buyer experiences, said panelist William Swearingen, senior vice president, Spectrum Retirement Communities. The buyer experience needs to meet their expectations. “It doesn’t take a budget. It’s about attitude, culture, and service,” he said.  

Surveys can be useful to get feedback from customers and referral sources on the buyer experience. Ask customers, including the adult children, how the buying process makes them feel.  

“Life sells on a tour,” said Morton. Potential residents and their families aren’t sold by beautiful empty spaces, he explained. They want to see residents actively engaged.   

From Bingo to Madonna 

Do prospective customers see residents playing bingo because it’s the best activity being provided? “Think about what that means,” said Swearingen. He cited a 2010 study that showed most people are well defined by the age of 40. Today’s resident who is age 85 was 40 years old in 1977. Activities should reflect events and interests of the late 1970s and early 1980s. These consumers don’t care about celebrity throwbacks to the 1940s. “We need to wake up,” said Swearingen. When he’s living in a retirement community at age 80, he expects the piped in music to feature Madonna’s greatest hits. “Take a chance,” he said. 

A few tweaks to the dining experience can have a big impact for a relatively small investment. “Dining is the highlight of the day,” said Bild. “How can you improve the overall experience?” The use of outdoor patios as dining venues increased during the pandemic which has been a plus.  

Technology is another area where senior living providers can improve their offerings. Major advances are being made in the areas of life safety and convenience. For example, artificial intelligence applications can help manage falls. Voice assistants, such as Amazon’s Alexa can carry out everyday demands. “We have a clear opportunity,” said Morton.  

Current residents already have smart phones. “They’re more tech savvy than we think,” said Swearingen. The pandemic only accelerated the trend.  

Amid rising resident acuity, more technology will be devoted to the management of chronic health conditions. Morton thinks that the silent generation has been less motivated to move into senior living because of their health status. But baby boomers are likely to delay move-ins until their health is compromised. “We need to understand how to build healthcare programming to meet their needs,” said Morton. 

Providers should also be aware that a demographic shift is under way among adult children. A growing number of them belong to Gen X, a group worried about financial security.  

The panelists discussed how to expand the consumer base. Private pay senior living mostly serves a well-off, white population, overlooking diverse groups. “We need an intentional effort to reach out to these populations,” said Swearingen. He added that marketing approaches tailored to different groups can result in two to three extra move-ins. 

Websites should feature persons of color as residents. Spanish language marketing campaigns can result in occupancy growth. Providers shouldn’t assume that members of diverse groups can’t afford senior living. At the same time, certain groups that have a tradition of providing elders with care at home should be educated about what the industry offers. 

Daniels concluded the session by asking the panelists the single biggest difference between boomers and the silent generation.  

Swearingen said boomers are an opinionated population. “Be prepared to answer their questions,” he said. “Don’t be afraid.” 

Bild noted that how the provider makes people feel has more impact than anything else. “Boomers like attention,” she said. “Master the human connection,” adding,  “Time is on our side.” 

Morton reminded the audience that the silent generation and boomers have very different life experiences. The world adapted to the boomers. The silent generation adapted to the world. “Understand who is your customer. Get the data.”

Loneliness and isolation were health concerns for older adults before the pandemic and have become more so in the aftermath of the worst of the pandemic period partly due to restrictions and protocols that were put in place within seniors housing communities and health care facilities. A search for publications that mentioned “loneliness” or “isolation” and “older adult(s)” or “older people” produced a result of roughly 19,000 publications in 2013. This number climbed to more than 25,000 in 2019 and spiked to more than 40,000 and 45,000 publications in 2020 and 2021, respectively. While down to roughly 32,000 thus far in 2022 (as of December 15), the level of interest and concern remains elevated.  

One reason for concern is that neuroscience research has shown that loneliness can speed cognitive decline. For example, one study found that individuals who were age 75 or older and lonely – defined as feeling unseen or unheard within a group – had a 210% increased chance of developing dementia. At the same time, there was a 60% increase in lifespan for individuals of the same age group who had rich social networks¹.  

Isolation, meanwhile, can result in both physical and mental health issues escalating into major emergencies if they remain unchecked by health care providers, family, friends, or the surrounding community. Developers, operators, and health care providers can take steps to reduce isolation and loneliness among older adults. 

Senior Housing Developers

Senior housing developers can reduce loneliness and isolation by site selection, location, and design. For example, new development, conversions, or retrofits with a tilt toward urban in-fill locations allow residents to be closer to city centers and population clusters. Indeed, some residents report that even the sound of nearby public transportation helps them feel less isolated from the community. However, from a cost-basis, in-fill locations can be expensive sites in which to build, and as a result, developers could also look to smaller secondary and tertiary cities for urban development where costs may be less prohibitive. 

Developing properties near or within multigenerational communities may also help reduce the potential for resident isolation and loneliness. For example, providing senior housing within walking distance of single-family housing helps residents be closer to younger generations or younger families. While age-eligible housing is an attractive lifestyle for many older adults, offering intergenerational developments with a mix of housing, retail, health, and wellness provides another option for those at risk of isolation. Locating senior housing on or near college campuses is another opportunity that allows proximity to walkable and alma mater experiences such as auditing courses or attending sporting events, which has been a popular draw to older adults for many years. Recently, some universities and colleges have begun incorporating non-students into classrooms, housing, and daily life as part of their diversity, equity, and inclusion initiatives and to address loneliness among both older adults and college students. 

Regarding design, spaces that encourage positive interactions and socialization between residents, visitors, and the surrounding community help to reduce loneliness and isolation. Rather than fences or walls, use of wide side yards with benches, shade trees, and sidewalks that are wide enough for both wheelchairs and pedestrians help to enhance community integration. Additionally, enlarged thresholds help to draw visitors in and to encourage residents to go out while providing opportunity for those less mobile to observe activities in the immediate surroundings. Inside, bedrooms that face communal space encourage residents to go out and socialize. In the dining area, small and intimate tables provide ease of conversation with other residents, while reconfigurable tables allow for larger gatherings with visitors.  

Senior Housing Operators

Senior housing operators can reduce loneliness and isolation by leveraging campus resources, affinity groups, pet therapy, and technology. Regarding resources, operators can offer popular campus services such as maintenance, landscaping, meal prep, and housekeeping off-site to engage the surrounding community. Wellness centers with fitness and nutrition amenities that are open to staff, residents, and the surrounding community increase multigenerational integration, particularly if set in a quiet environment that encourages conversation. Providing on-site childcare for staff could also help to increase multigenerational interaction, as well as help with employee hiring and retention. This is not always easy to implement effectively, however. Pet therapy has become popular in both schools and older adult communities for pets’ ability to reduce anxiety and feelings of loneliness, and operators can enlist regular visits from such pets to increase interactions between residents, staff, and visitors.  

Affinity groups can reduce loneliness and isolation by increasing opportunities to socialize and connect in a specialized setting. Communities catering to LGBTQ+ older adults and allies have gained interest², as well as veterans-focused age-eligible communities. Some adult day care operators have had success in target marketing for ethnic backgrounds with newspapers, television programs, and conversation in a particular language. Operators of culturally focused communities can also consider dietary customs, opportunities for meal sharing, and spaces for cultural events in their designs. As a commercial real estate property type, active adult rental properties are a response to the preferences of the baby boomer generation and appeal to a cohort of the older population seeking an option for living in a secure, maintenance-free setting with amenities and opportunities that foster socialization and shared activities with like-minded older adults.  

Regarding technology, today’s older adults are more tech savvy than prior generations and are increasingly expanding the use and number of devices employed³. Ensuring regular, private communication between staff, family, and residents and sharing real-time data via apps or wearable devices reduces isolation and the likelihood of physical or mental health issues going unchecked. Wearables can track changes in socialization by reporting “where two or more are together.” Access to traditional social media allows connectedness to friends, family, and daily life.  

Health Care Providers

Skilled nursing properties and hospitals can reduce loneliness and isolation by design and by leveraging technology and campus resources. Inviting use of skilled nursing and hospital campuses for community events, such as farmers markets, or charity events, including cornhole tournaments, could increase community integration with residents, patients, visitors, and staff. Corridors designed as walking paths encourage patients to step out and visitors to come in. Within skilled nursing and hospital rooms, large consultation areas can include both the patient and family bedside with designated space to display family photographs either digitally or physically. Additionally, skilled nursing properties and hospitals can downplay the clinical environment by adding art, appealing lighting, and communal touches such as: 

• A piano that residents, patients, visitors, or staff can play
• Meditation rooms
• Rotating art exhibits
• Public events and demonstrations
• Inviting landscapes
• Rooftop or botanical gardens
• Healing gardens or labyrinths
• Indoor playgrounds
• Restaurants  

Regarding technology, skilled nursing and hospital rooms can incorporate devices and wearables to communicate with family, friends, and staff. Additionally, the use of robots has increasingly been used to provide socialization in addition to providing entertainment and helping with staffing shortages. For example, some interactive therapeutic robots provide animal therapy in environments where live animals are unable to visit and can stimulate interaction between patients and caregivers⁴.

Final Thoughts

While the pandemic brought new restrictions and protocols, strained labor availability, and increased concerns about loneliness and isolation, senior housing developers and operators and health care providers can incorporate social needs into daily life and care. In general, older adults must not feel like a burden to those around them and should not be isolated from family, friends, staff, or the surrounding community. All available resources should be leveraged to encourage socialization, communication, connectedness, and inclusion. 

 ¹ “Lifestyle, Social Factors, and Survival After Age 75: Population Based Study”, BMJ, The Advisory Board Company.

 ² “Retirement Communities Cater to LGBT Population”, WSJ, November 16, 2022.

 ³ “Baby Boomers & Tech – How the Pandemic Changed the Relationship”, GWI, July 6, 2021.

 ⁴ “How a Robotic Baby Seal Is Revolutionizing Memory Care”, The Front Porch Center for Innovation and Wellbeing, October 20, 2016.

Sharing a commitment to advancing diversity, equity, inclusion, and belonging (DEIB) in the senior living industry, Argentum, the American Seniors Housing Association (ASHA), and NIC earlier this year formed the Senior Living DEIB Coalition to empower businesses operating in and around senior living.  

The DEIB Coalition believes that not only are DEIB efforts the right thing to do, but data from several studies show that organizations that engage in DEIB initiatives perform better, are more innovative, and manage risk more effectively. That in turn helps to provide the best outcomes for the residents and staff of senior living communities, as well as staff in our respective corporate offices. 

*(WEF) World Economic Forum

Senior Living DEIB Survey 

One of the first efforts the DEIB Coalition undertook was to identify the current state of DEIB efforts in the industry. The resulting survey, conducted by Ferguson Partners, collected information to understand both the degree to which DEIB programs are deployed and the diversity of the participating companies’ respective staffs. The survey marks the first industry-wide effort to collect data on diversity, equity, inclusion, and belonging in the senior living industry. 

Results of the survey can be found in the 2022 Senior Living DEIB Survey Executive Summary. 

Senior Living DEIB Toolkit 

Survey results indicate opportunities for senior living companies to give more focus to DEIB efforts. To aid industry operators and other organizations in advancing their respective DEIB practices, the DEIB Coalition commissioned development of a toolkit to help interested companies customize programs that work for their organizations. 

Developed by The Axela Group, the Senior Living DEIB Action Toolkit for Operators offers resources to assist in your DEIB efforts. 

The DEIB Coalition’s goal is to co-create a plan of action and strategy around DEIB, including the development of resources to inform, equip, and catalyze positive impact and thinking around DEIB. The 2022 Senior Living DEIB Survey and Action Toolkit for Operators are the first of many deliverables. Refer to NIC’s Senior Living DEIB Coalition page to learn more.  

“Organizations reporting an increase in the pace of move-ins has held steady now for several consecutive waves. When the BA.4 and BA.5 variant surge occurred in summer of 2022, the rate dropped from more than 50% of operators reporting an increase in the pace of move-ins to the current ~40%. Operators may now be combatting what is being referred to as the ‘tripledemic’ – a collision of RSV, influenza, and COVID-19 that is sickening millions – which may be tempering move-ins.

Lead volumes being reported are higher now than in most previous waves, but as noted above with the pace of move-ins holding steady, the reported increase in lead volumes is not yet materializing with move-ins.”

–Ryan Brooks, Senior Principal, NIC

This Wave 48 survey includes responses from November 14 to December 11, 2022, from owners and executives of 40 small, medium, and large senior housing and skilled nursing operators across the nation, representing hundreds of buildings and thousands of units across respondents’ portfolios of properties. More detailed reports for each “wave” of the survey and a PDF of the report charts can be found on the NIC COVID-19 Resource Center webpage under Executive Survey Insights. 

New questions in the Wave 48 survey asked about the impact of the current operational environment (occupancy rates, operating expenses, inflation, etc.) on the ability to service debt as well as the impact of increased interest rates on the ability to service debt. 

With regard to the impact of the current operational environment on the ability to service debt, almost half (44%) of nursing care operators reported there was no impact, followed by one-third of assisted living, independent living, and memory care operators. Comparatively, one quarter of assisted living and nursing care operators reported the current environment had a significant impact on their ability to service debt, while one-fifth of independent living and memory care operators reported a significant impact.

When specifically asked what impact the increase in interest rates has had on their ability to service debt, nine in ten (89%) nursing care operators report no impact on their ability to service their debt as a result of increased interest rates. This is followed by two-thirds of assisted living (64%) and memory care (63%) operators, and finally independent living, of which 58% reported no impact to their ability to service debt. As for operators reporting a significant impact on their ability to service their debt, 15% of assisted living and memory care operators report significant impact, as did 13% of independent living operators. No nursing care operators reported the increase in interest rates has had a significant impact on their ability to service their debt.

Organizations reporting an increase in the pace of move-ins has held steady now for several consecutive waves. When the BA.4 and BA.5 variant surge occurred in summer of 2022, the rate dropped from more than 50% of operators reporting an increase in the pace of move-ins to the current ~40%. Operators may now be combatting what is being referred to as the ‘tripledemic’ – a collision of RSV, influenza, and COVID-19 that is sickening millions – which may be tempering move-ins.

Lead volumes being reported are higher now than in most previous waves, but as noted above with the pace of move-ins holding steady, the reported increase in lead volumes is not yet materializing with move-ins. 

Regarding the current share of all full-time open positions across respondent organizations, in the Wave 48 survey, approximately two out of five respondents have between 10% and 20% of full-time positions unfilled, whereas roughly one in five respondents have 20% or more positions currently unfilled. This is an improvement from the Wave 42 findings from June 2022, where one-half of respondents had between 10% and 20% of full-time positions unfilled and another one in five had 20% or more full-time positions unfilled.

When asked about backfilling staff shortages, nearly all respondents (93%) reported paying overtime in Wave 48, and two out of three respondents are currently tapping agency or temp staff (68%). Other identified strategies for finding needed staff include the creation of a dedicated corporate recruiter, shift incentives, and partnering with organizations outside of the senior housing and care industry. Of those organizations currently utilizing agency or temp staff, one-half expect their reliance on agency staff to decrease in the next six months. Slightly under one-half (44%) expect their utilization to stay the same, and only 5% expect their agency utilization to increase. 

There is evidence provided in the Executive Survey Wave 48 that there may be a sign of relief coming with regards to the industry’s staffing challenges. One-third of respondents (31%) anticipate staffing challenges will improve in the first six months of 2023 while another one-third (36%) anticipate improvements in the second half of 2023. About one in six respondents (17%) anticipate it will take until 2024 before staffing challenges improve and finally, one in six (17%) predict the staffing challenges will remain until at least 2025.  

While there may be indications of improvement on the staffing front, staffing and labor challenges certainly persist. When asked whether they were currently experiencing a staffing shortage, 90% of respondents indicated that they were. Of these organizations reporting a staffing shortage, one-third are experiencing the shortage in the entirety of their property portfolio, while another one-third are experiencing the shortage at more than 50% of their properties. 

When asked about providing rent concessions, approximately one-third of respondents indicate they are offering rent concessions to attract new residents. Over the last four waves in which this question was asked, there has been a consistent decline in the rate of organizations offering rent concessions. At the beginning of 2022, Wave 37 findings show almost half (47%) of respondents were offering rent concessions. In November and December of 2022, Wave 48 findings show just over one-third (38%) of respondents are offering rent concessions. 

In the Wave 48 survey, there were no organizations offering rent concessions in all their properties, down from 7% in Wave 46 and 20% in Wave 41. Conversely, almost one-half (45%) of organizations are currently offering rent concessions in just 0-25% of their properties, while one-third (36%) are currently offering rent concessions in 26-50% of their properties. Of organizations who are currently offering rent concessions, the most common forms being offered are rent discounts (39%), followed by free rent for a specific period of time (26%), upgrades to units (13%), and rent freezes (13%).

Wave 48 Survey Demographics

• Responses were collected between November 14 and December 11, 2022, from owners and executives of 40 senior housing and skilled nursing operators across the nation.
• Owners/operators with 1 to 10 properties comprise roughly two-thirds (63%) of the sample. Operators with 11 to 25 properties account for 25%, and operators with 26 properties or more make up the rest of the sample with 13%.
• Half of respondents are exclusively not-for-profit providers (50%), just under one-half operate for-profit seniors housing and care properties (48%), and 3% operate both.
• Many respondents in the sample report operating combinations of property types. Across their entire portfolios of properties, 63% of the organizations operate seniors housing properties (IL, AL, MC), two-thirds (38%) operate CCRCs – also known as life plan communities, and 13% operate nursing care properties,

This is your survey! Owners and C-suite executives of seniors housing and care properties, please help us tell an accurate story about our industry’s performance. While some standard questions will remain for tracking purposes, in each new survey wave, new questions can be added based on respondents’ suggestions. Please let us know what you think.

Wave 49 of the ESI is now live. The current survey is available and takes ten minutes to complete. If you are an owner or C-suite executive of seniors housing and care and have not received an email invitation to take the survey, please contact Ryan Brooks at rbrooks@nic.org to be added to the list of recipients.

NIC wishes to thank survey respondents for their valuable input and continuing support for this effort to provide the broader market with a sense of the evolving landscape as we recover from the pandemic.

The total investment return for the senior housing sector was a positive 0.59% in the third quarter of 2022. This marked the ninth consecutive quarterly gain after one quarter of pandemic-related negative returns in the second quarter of 2020 (negative 1.00%). Short-term total returns for senior housing are on par with the broader NPI, which posted a total return of 0.57% in the third quarter. Positive income returns for both the NPI and senior housing were partially offset by negative appreciation, reducing the overall investment return.  

The senior housing income return in the first quarter was 0.83%, stronger than industrial (0.76%), but below the overall NPI (0.93%). The appreciation (capital/valuation) return was -0.24% and followed four consecutive quarterly gains. Current economic and capital market returns have hurt appreciation returns, especially for retail (-0.80%) and office (-1.70%). Further, many investors have reduced their appreciation expectations for senior housing as the impact of the coronavirus has weighed heavily on their view of the sector. The appreciation return is the change in value net of any capital expenditures incurred during the quarter.  

On a longer-term basis, the ten-year return for senior housing was the strongest of the main property types, except for industrial. For this time frame, total returns equaled 10.14%. This compares to 9.48% for the NPI. Income returns for senior housing (5.30%) surpassed the NPI (4.73%), as did the appreciation return (4.67%).  

Note that the performance measurements cited above for senior housing reflect the returns of 189 senior housing properties valued at $10.62 billion in the third quarter. This was the highest property count and market value in the NCREIF time series for senior housing. It’s also notable that the number of properties tracked by this index has grown significantly since the beginning of the pandemic, having been 134 properties in the first quarter of 2020, valued at $6.3 billion. The additional properties may be influencing the overall performance returns of the index.  

Third quarter 2022 market fundamentals data for senior housing showed improved demand patterns and moderate growth in inventory in the 31 Primary Markets, according to NIC MAP^® data powered by NIC MAP Vision. The occupancy rate for senior housing stood at 82.2% in the third quarter, up one full percentage point from the second quarter and 4.3 percentage points from its low point, but still 5.0 percentage points below its pre-pandemic level of 87.2% in the first quarter of 2020. The average masks the wide range of occupancy rates by property, however, with 35% of properties having occupancy levels at or above 90%. While these statistics are promising, future occupancy improvement will be shaped by local patterns of inventory growth and demand, and will be influenced by the broad economy, consumer confidence, inflation pressures, rising interest rates, the ease of development, COVID- 19 variants, and vaccination rates.

Source: Third Quarter 2022 NCREIF Performance Report, NIC Analytics