“It’s a very exciting time in the senior housing industry, as the sector continues to mature and product offerings become increasingly differentiated,” said Beth Mace, chief economist and director of outreach at NIC, kicking off the third Leadership Huddle of 2022. Mace was joined by Melissa Andrews, president & CEO of LeadingAge Virginia; Tom Gaston, EVP of acquisitions and development at Maplewood Senior Living; and Ashley Fitzgerald, principal of Carlyle, to explore the state and future of segmentation in the senior housing industry – and what it means for aging adults.
“For us, this is something that’s personal. We all have family members who fall into the category,” Andrews said of the emerging middle market segment. As the largest cohort of the aging Baby Boomer generation, middle income seniors – those who do not qualify for federal subsidies but do not have the savings to afford private pay options – need affordable housing options. “Your data shows there’s a huge opportunity nationally,” Andrews said, citing NIC’s 2019 The Forgotten Middle study.
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Tailored to seniors willing to pay for high-end services, Gaston predicted the Ultra-Luxury segment has ample opportunity to prosper in the wealthier United States cities due to low competition. “Barriers to entry, including the cost, the development cycle, the size of the project, and what you’re trying to offer I think will keep a lot of groups out of it,” Gaston said. “It’s just not hospitality, it’s just not real estate, it’s just not operations. It’s really an amalgamation of all three.”
Fitzgerald explained that Carlyle’s Active Adult communities are well-positioned to meet the needs of the aging Baby Boomer generation. “These communities are here to target residents in their late 60s to mid 70s, which is on the front edge of demand from the Baby Boomer generation,” Fitzgerald said. “This provides steady demand for at least the next decade.” Speaking about risk and opportunity in the segment, Fitzgerald explained lease-up cycles can be longer in Active Adult communities, but average length-of-stays of six years make these communities nearly “recession proof.”
NIC Leadership Huddles reconvene July 13 to discuss leadership strategies and changes in senior living. Hear from Chris Taylor, Cindy Baier, and Kimberly Lody as they explore lessons learned and how they can be applied to the new challenges facing the sector. Register today and watch all past leadership huddles in the NIC Leadership Huddle Archives.