Robb Chapin
ORLANDO, FL—Even with a healthy dose of optimism within seniorshousing, post-acute, and skilled nursing sectors, 2018 was filledwith some challenges as new supply growth in seniors housing sloweddown occupancies and the skilled nursing sector changed itsreimbursement system. The year, however, ended with promising newsas the industry continued to face levels of supply growth whichexceeded absorption (occupied unit growth).
SILVER TSUNAMI
In 2019, seniors housing is now one of the most attractivesegments in the U.S. commercial real estate market for severalreasons starting with the unprecedented demographic “imperativeaffectionately described as the “Silver Tsunami” which are the 73million plus baby boomers coursing through America,” says RobbChapin, Chief Executive Officer-Seniors Housing and MedicalProperties, Bridge Investment Group.
With the “silver tsunami,” large number of seniors are livinglonger and thus, driving the need for high quality living and carecreating a long-term demand cycle. Because demand is “needs anddemographic driven,” seniors housing incorporates very durablefundamentals providing more stable occupancy and rent growth thatare not as correlated to the broader economic markets. Occupancyvariance is comparable to multifamily, which is traditionallyviewed as a “defensive” real estate class, Chapin tellsGlobeSt.com.
SUPPLY AND DEMAND
Overall, there is a stable balance of supply and demand with theexception of some oversupply in certain markets which ultimatelywill be absorbed even though it may take longer and createchallenges for some owners.
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