Insights in Seniors Housing & Care
NIC Leadership Huddles returned on May 11 with a timely focus on the state of senior housing and skilled nursing and the path to recovery. Beth Mace, chief economist and director of outreach at NIC, Brian Beckwith, chief executive officer of Arcus Healthcare Partners, and Craig D. Hanson, chief executive officer of Omega Senior Living, shared insights on potential regulatory changes, market activity, and ongoing workforce and occupancy challenges that continue to impact owners, operators, and investors.
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Industry recovery has been uneven across segments. When asked about what factors are influencing skilled nursing’s recovery, Hanson said, “The skilled nursing world has seen a number of pressures from different angles,” citing the rise of home-care services and short-stay rehabilitation facilities claiming more market share. As skilled nursing continues to work toward a full recovery, Hanson said adapting is key. “We’re having to pivot, find niches to fill, and be innovative.”
For assisted living specifically, Beckwith noted that though construction loan volume fell significantly during the early days of the COVID-19 pandemic, having fewer units to fill is a good sign for recovery. “Supply trends on the assisted living side will help us, occupancy being the most important piece of the puzzle,” said Beckwith. “The assisted living world will have a better story on the supply side because development has slowed.”
Despite turbulent market fundamentals during the pandemic, valuations largely held steady, with skilled nursing valuations holding at $91,000 per bed throughout the past year. Beckwith sees a robust financing market and bullish investors as the drivers of strong valuation. “I think people are still attracted to skilled nursing real estate because that financing solution is out there,” he said.
Hanson believes addressing workforce challenges is vital to recovery. “The companies that have good cultures and have the right programming to take care of the associates who then provide the care, those are the companies that are going to be successful long-term,” he said.
The next Leadership Huddle webinar will be on May 25. Beth Mace will be joined by Mike Acton, managing director of AEW Management, and Mary Ludgin, head of global investment research at Heitman, to examine the real estate market and economic outlook. Watch all past leadership huddles in the NIC Leadership Huddle Archives.
The National Investment Center for Seniors Housing & Care (NIC) is a nonprofit 501(c)(3) organization whose mission is to support access and choice for America’s seniors by providing data, analytics, and connections that bring together investors and providers.
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