Experience and strong staff keys to capitalizing on sector demand
LOS ANGELES: “Seasoned operators with a strong team of existing staff will be best positioned to capitalize on the exceptional growth” facing senior living providers, Marcus & Millichap Chief Intelligence and Analytics Officer John Chang said Monday.
He made the remarks in a video recorded in conjunction with a recent research brief by the real estate investment services firm, which included the company’s data as well as data from NIC MAP and the federal government.
Independent living, assisted living, memory care and continuing care retirement communities are poised to see a boost in demand driven by the aging baby boomer generation, turning 61 to 79 this year, Chang pointed out. He noted that there are about 67 million baby boomers and that the majority of senior living residents are aged 75 or more years.
“The population 80+ is expected to grow by 4.6% by 2026, by 6% in 2027 and then by about 4.4% in each of the three years after that,” he said. “That population growth will drive a dramatic surge in the demand for seniors housing facilities.”
The demand will require that an estimated 600,000 additional senior housing units be constructed over the next five years, according to Marcus & Millichap.
“Considering that in 2019, the peak of the last seniors housing construction cycle, only about 60,000 units were built, the magnitude of the seniors housing shortage becomes clear,” Chang said.
Current occupancy among senior living properties is in the high 80% range, he noted, adding that the level aligns with pre-pandemic levels. The sector also is experiencing a labor shortage, he added.