Introduction A growing number of senior housing operators and capital providers are expressing interest in the “Forgotten Middle,” a term coined by NIC in 2019 in its seminal research to describe the large middle-income seniors cohort by its demographic characteristics as well as its housing and healthcare needs. The middle market includes Americans who have too much wealth to qualify for government support programs such as Medicaid, but not enough financial resources to pay most private pay options for very long. Identifying the right balance of hospitality, services, and care delivery, while still maintaining a monthly rental price that can be paid for by this group, is the cornerstone to a successful middle-market strategy.
Weekly virus cases among residents and staff within skilled nursing facilities (SNFs) had been somewhat steady since the vaccine rollout in December 2020. However, the fast-spreading omicron variant has changed the narrative once again and prompted worries around worsening staffing shortages. SNFs are once again faced with rising COVID-19 cases among both residents and staff on top of a reportedly bad flu season compared with 2020.
One-half of respondents (52%) in Wave 36 anticipate their organization’s operating margins will improve in the next six months. One-third (32%) expect a 1% to 5% increase, and an increasing share (16%) anticipates growth between 6% and 10%. However, labor costs will continue to be a mitigating factor. Nearly all respondents since July have been paying staff overtime, and the use of expensive agency/temp staff is growing, with nine out of ten organizations (89%) now tapping agency/temp staff.
Senior Living investors and operators discuss innovative approaches. The pandemic has been a stress test like no other for owners, operators, and lenders alike. Lessons have been learned. But what’s the best way to align incentives among the stakeholders for success going forward?