NIC INSIGHTer: Aging Inventory Impacts in Senior Housing
“Nearly 44% of senior housing inventory is now more than 25 years old. What impact do you see this having on the sector as a whole?”
“This has the potential to simultaneously address two challenges as the Baby Boomers arrive: Accelerate the development of new properties to meet growing demand while repositioning the older inventory to meet the needs of the middle market cohort.”
Aaron Becker, Senior Managing Director, Lument
“This can be seen as a challenge or opportunity. I see it as an opportunity to use these communities to create a new market subsegment for the forgotten middle or middle market. Short term, with absorption high and little new development in the face of increased demand, these communities are likely to manage, but long term, there is a pressing need to use this real estate and forge a new operating model that will serve this large and deserving group of Americans.”
Lynne Katzmann, President & CEO, Juniper Communities
“Aging inventory in the face of growing demand is both an opportunity and a challenge as it highlights the nuances of investing in our sector – once again frustrating those who want to think about the industry “as a whole.” In the past four development cycles (late 1980s, mid-1990s, early 2000s, and 2016-2022), we have failed to soberly match supply growth with demand. With increased transparency, I am hopeful we will avoid the inefficient boom/bust cycles of the past.”
The NIC Analytics team presented findings during a webinar with NIC MAP Vision clients on April 11 to review key senior housing data trends during the first quarter of 2024.
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“This has the potential to simultaneously address two challenges as the Baby Boomers arrive: Accelerate the development of new properties to meet growing demand while repositioning the older inventory to meet the needs of the middle market cohort.”
“This can be seen as a challenge or opportunity. I see it as an opportunity to use these communities to create a new market subsegment for the forgotten middle or middle market. Short term, with absorption high and little new development in the face of increased demand, these communities are likely to manage, but long term, there is a pressing need to use this real estate and forge a new operating model that will serve this large and deserving group of Americans.”
“Aging inventory in the face of growing demand is both an opportunity and a challenge as it highlights the nuances of investing in our sector – once again frustrating those who want to think about the industry “as a whole.” In the past four development cycles (late 1980s, mid-1990s, early 2000s, and 2016-2022), we have failed to soberly match supply growth with demand. With increased transparency, I am hopeful we will avoid the inefficient boom/bust cycles of the past.”
