We gathered a few facts around our office that we found to be the most interesting to share with you.
We are an asset management company dedicated to the senior living markets. Our core values are on a foundation of continuous learning and implementing new facts into our strategy for continuous growth month-over-month. If you have an asset that you dread to discuss, let’s talk about a solution. We can implement a solution without any changes to the operating company. We’re more than a consultant who gives you recommendations, we’re the asset manager to drive results.
If you find this posting too surprising, we encourage you to reach out to us at talk@etros.com to share source materials and thoughts.
Now, what you’ve been waiting for…
8 Surprising Things About Senior Living
1. There is less than 14 years of industry-tracked performance data on occupancy, rent growth, supply, and construction.
The National Investment Center (NIC) is the generally accepted authority of senior housing supply and trends.
2. Not all occupancy should be treated equally.
Occupancy can be a loose term for success when derived from discounts and incentives. Take an example of Community A with AL Rates in the Lower Quantile of $3,650/month at 80% occupancy vs. Community B with AL Rates at the Median Quantile of $4,503/month at 70% occupancy. Community B has 10% less occupancy with 8% more revenue and less associated resident expense.
3. There are approximately 8,500 Assisted Living and Memory Care properties in the United States.
As of year-end 2017, the 10 Largest Senior Living Operators accounted for 25% of the operations, management decisions, and results. Chains with more than 25 properties account for 42% of senior living operating companies.
4. Independent Living (IL) and Assisted Living (AL) report the same average length of stay at 22 months.
New IL residents tend to be older than the analyst’s original projection and needing the assistance of at least one or more ADLs. Although assisted living may be more appropriate for a portion of these older adults, many look to independent living as a first step.
5. Assisted Living (AL) has the highest national senior living penetration rate at 3.6% and the lowest penetration rate sits with stand-alone Memory Care at 0.4%
This is the most surprising fact of all. The majority of all senior housing move-ins are due to an event or a change in need, where staying at home with services should not be a realistic option.
6. Senior Living Operators act as both operator and manager in many communities.
It is not favorable to operate or manage senior living as traditional Multi-Family Housing (MFHs). Differences include penetration rates, price points, labor, and regulation, to name a few.
7. More than one-half of all memory care units currently in existence within primary or secondary markets were developed in 2003.
Since most capital is deployed for renovations and upkeep on a 16 – to 20-year cycle, pay attention to an increase in capital spend at competing communities or reevaluating your own.
8. In 2026, the oldest baby boomers will reach 76 years old. As such, they will not reach the average move-in age of 83 until 2033.
This means if you’re hanging on until the Longevity Economy (aka “Silver Tsunami”) reaches its peak you have a fourteen year wait.
