The senior housing industry is undergoing a transformative period. An aging population with increasingly complex healthcare needs is reshaping the landscape, demanding innovative solutions and strategic investments. As the baby boomer generation continues to retire, three key trends are emerging that will redefine the sector: the expansion of specialized care options, a growing emphasis on luxury amenities, and the relentless force of market consolidation. Here are three predictions for the senior housing industry and their implications for investors seeking to capitalize on the opportunities within this dynamic market.
About 70% of the 65+ population will require long-term care in their lifetime.
The senior housing industry will continue experiencing increased demand for specialized care options like assisted living, skilled nursing, and memory care. This shift is driven by the growing complexity of resident needs, particularly among those with chronic illnesses, cognitive impairments, and disabilities.
Investors should view this trend as a key growth opportunity. Nationwide, assisted living facilities saw a 34.4% increase in revenue from 2013 to 2020, and the memory care industry is expected to grow at a compound annual growth rate (CAGR) of 5.1% from 2023 to 2030.
Specialized care options are experiencing especially high growth in regions with large baby boomer populations, such as the Sunbelt states. For example in Florida, assisted living recorded the largest occupancy gains in 2022.
To capitalize on this opportunity, investors should leverage data analytics to identify markets with the highest demand for specialized care and to assess the competitive landscape. Carefully track the care mix supply in each MSA and consider the demographic data that supports predictions for demand estimations.
Growth in the high income segment of seniors is expected to continue, especially in the 74-84 age range.
Luxury options are the primary competition to aging in place for those who are well-to-do, and the demand for luxury is spreading beyond just the major markets.
Investors should dig into demographic data to thoroughly understand the market’s needs when considering opportunities. Expand the investment thesis to uncover opportunities in underserved MSAs and find potential outlier luxury hotspots like Charlotte or Houston.
Continue to keep a close eye on markets with an imbalance of luxury supply and demand to predict where the highest occupancy and rate growths will occur.
Regional market consolidation remains a dominant force in the senior housing industry. Larger operators are acquiring smaller companies to achieve economies of scale, expand their geographic footprint, and minimize costs. This trend is expected to accelerate in the coming years, especially as regions with fragmented markets like the Mountain West offer attractive opportunities for consolidation.
The pressure is on for investors to make more informed decisions faster and cheaper. Teams can no longer afford to spend 10 days and thousands of dollars on a consultant or pulling data manually in-house to validate opportunities.
Instead, investors should be able to instantly assess the competitive landscape and identify opportunities with strong growth potential. Think about identifying markets that have underserved demand outweighing the supply and be aware that supply and demand could change as the market consolidates. This is only possible if you have access to a comprehensive data set.
The senior housing industry is poised for significant growth and evolution in the coming years. By focusing on specialized care options, luxury amenities, and preparing for strategic market consolidation, investors can position themselves for success. By understanding these key predictions and their implications, and by adopting a data-driven and long-term perspective, investors can make informed decisions and capitalize on the opportunities within the dynamic senior housing market.
Leverage cutting-edge insights and timely data to drive your success in the senior housing market.
Disclaimer: These images and information attempt to accurately represent floor plans, buildings and amenities. However, the developer, agent, owner and manager reserve the right to make changes to final plans and are not responsible for typographical errors or any differences between photos and actual property. Residents, purchasers and sellers are encouraged to tour the actual property of interest to prevent any miscommunication. Please also note that regional differences will be made to accommodate indigenous plantings, the climate, and the architectural influences of the region.
Senior House is a division of College House LLC.
College House Partners LLC maintains SOC 2 Compliance.
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