May 17, 2018
A shrinking supply of units, combined with increasing rent rates and a booming demographic, are leading to a large problem when it comes to seniors housing supply. According to a recent analysis from global credit rating agency DBRS, the growth of the U.S. senior population is far outpacing what is being delivered to market. The end result is “longer wait lists for applicants, unaffordable monthly rental rates and a lack of options for one of the nation’s most vulnerable communities,” the report said.
Nor is the issue going away. The report quoted information from CBRE’s “Senior Housing & Care Market Insight,” which indicated that the population of people 65 years and above was 40.3 million in 2010; in the same year, the population was 5.5 million. By 2060, it’s anticipated that the 65+ and 85+ population will stand at 98.2 million and 19.7 million, respectively. The U.S. Census Bureau forecasts that, by 2060, the overall U.S. population is projected to be 416.8 million, with people age 65 and above representing 23.6% of the population.
Is anything being done? The DBRS analysts pointed out that, while there is interest from investors in developing and owning such properties, it’s not an easy market to break into. “Senior properties often require staff training, specified unit renovations, as well as considerations into the complexities” involved with management, the DBRS analysts commented.
Still, interest in the sector could mean more units and facilities under development in the United States. This, “in turn, could help alleviate some of the demand pressure nationwide,” the report concluded.
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