NIC Notes

Insights in Seniors Housing & Care

By: NIC  |  May 20, 2015

NIC’s Participation at ALFA Conference Focused on Delivering on Mission

Economic Trends  |  Ideas and Discussion

2015-ALFA-Conference-Logo

ALFA 2015: The Senior Living Executive Conference, is a professional development and business networking event. The four day event included advanced executive-level educational sessions, a solutions oriented exposition, high-profile awards ceremonies and a plethora of professional networking opportunities.

On Tuesday, Robert Kramer, CEO of NIC, presented on a panel discussing where assisted living fits into the future of healthcare by reviewing its roots, current state and how the industry could shape itself for the future. The focus of the discussion was around these six key trends facing the sector:

  • BobSession_croppedA new and demanding customer 
  • Reality of healthcare reform
  • Opportunity of technology
  • Challenge of affordability
  • Demand for transparency
  • Increasing role of palliative care

As Baby Boomers shift from being the caregivers to being the receivers of care, the view among seniors of retirement and aging is changing to more of a “what will I do next?” type of mentality vs. “I’m finished, done!” Embracing new technologies presents the opportunity to enhance the experience, improve efficiency, and advance quality when it comes to operational effectiveness, health and wellness, maintaining independence and social behavior that the new customer demands.

Robert Kramer stated that, “within two years, hospitals will have a do-not-refer list of assisted living and memory care places.” This impactful quote makes it apparent that it is more important than ever before to deliver, document and demonstrate positive outcomes, with a focus on quality care that engages, connects and enriches the life of the resident. Demand for more transparency, with data being the new differentiator, will come from care partners, payers, regulators, investors, and the consumer.

Beth Burnham Mace, Chief Economist and Director of Capital Markets Outreach at NIC, rounded out the day with “Why Invest in Seniors Housing?” The session addressed capital flow, who is investing, and what they are considering, as well as current supply/demand conditions in the seniors housing market.  Key takeaways Seniors ho from an investor’s point of view included:

  • BethSession_300x224Seniors housing is an emerging commercial real estate asset type and will eventually be considered a “core real estate property type;”
  • The sector has become more understandable 
    and transparent to the investment community;
  • Both debt and equity providers are providing capital to the sector;
  • Investor interest in seniors housing is growing and the market is more liquid;
  • There continues to be a sizeable risk premium offered to investors for seniors housing;
  • The seniors housing and care’s market value is $300 billion and growing;
  • Seniors housing investment returns outperformed other commercial real estate property types during the past 10 years;
  • Three of the 15 largest REITs are now health care REITs; and  
  • Seniors housing was a resilient real estate sector during the economic recession

In conclusion, the seniors housing and care sector has improving market fundamentals, solid and relatively stable investment returns, increasing presence of institutional investors, and a range of investment strategies that potentially also diversify a multi-asset portfolio.

NICMAP_Cropped

NIC MAP® Data Service participated in the exposition that Tuesday and Wednesday and provided the first 100 attendees with the opportunity to receive a free Property Advisor Report, customized to the attendee’s target location. This provided attendees with aggregated three-year historical time series performance data on occupancy and average asking rents, segment and unit level performance, and sales transactions reporting; buyer/seller, close date & price, and price per unit within the market area they targeted. The NIC MAP® team was able to give attendees an “inside look” into the tool through on-site demonstrations of its unbiased and actionable market-level data.  The NIC MAP team presented the value of transparency to owner/operators, developers and capital providers in the sector.

NIC MAP data was also featured during “Market Fundamentals & Trends in Seniors Housing” session on Wednesday, May 6th presented by Charles W. Harry Jr., NIC’s Managing Director and Director of Research & Analytics, and Beth Burnham Mace, Chief Economist and Director of Capital Markets Outreach at NIC.  The pair discussed current and forecasted market conditions and took an in depth look at which markets are seeing the strongest demand, new development, and highest rates of construction. Attendees also received information on where the seniors housing property sector is in its market cycle, macroeconomic demographic and capital market trends affecting the outlook for seniors housing, investor interest, and whether occupancy rates as well as rent growth are poised for future gains.

NIC’s participation in events such as the ALFA Conference expand the platform on which NIC delivers on its mission to advance the quality and availability of seniors housing and care to America’s elders through research, education and increased transparency that facilitates informed investment decisions, quality outcomes and leadership development. As the sector approaches the greatest growth period in its history, NIC’s mission is not only relevant but is also increasingly important.

About NIC

For nearly 25 years, the National Investment Center for Seniors Housing & Care (NIC) has been committed to advancing the quality and availability of seniors housing and care options for America's elders — the demographic cohort of age 75-plus totaling 19.2 million and a sector with a market value of approximately $330 billion — through research, education and increased transparency that facilitate informed investment decisions, quality outcomes and leadership development in seniors housing and care.

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