The Senior Housing Industry Today

Note from the Editors of Active Senior Online -  Although Wayne Kaplan wrote this article almost one year ago, much of what he predicted has come true.  We can most probably look forward to more of what Mr. Kaplan predicts.  Whether you are an investor, a consumer, or a potential consumer of Senior Housing, Mr. Kaplan’s words should be relevant.

The Industry Today

The U.S. is in fear of a deep recession, the stock market is tanking, home prices are plummeting, unemployment is rising, retail sales are tumbling, demand for commodities is sinking, bank earnings keep falling, and consumer confidence is shaky at best. The disconnect between the seniors housing buyer and seller in today’s market continues to be fairly wide and there is apprehension on both sides of the table that didn’t exist a year or two ago. Is all lost in the seniors housing industry?

NO.  The demographics are still strong and are getting stronger. Also, there will be fewer new entrants to the industry, new construction will be scaled back and therefore there will be less competition in the coming years. As a result, good operators will go forth and prosper. The industry will periodically experience significant challenges just as it always has, including financial bubbles much like the one whose collapse is plaguing us now. In this slow acquisitions market, the few transactions that are getting done are either small, at a low price, or both.  However, the increasing size of the senior population will intensify demand for senior housing opportunities in the future, making current senior living communities even more valuable.

Read more