The senior living industry is poised for growth due to favorable demographics and increasing demand. However, a low rate of new supply and aging properties may limit the industry’s ability to meet the growing needs of seniors. The incoming baby boomer generation is expected to drive demand for senior living services, but the current lack of new supply poses a risk of undershooting resident demand. With only a modest increase in projected inventory growth compared to demand, the industry must address the challenge of rapidly aging properties. Despite these challenges, opportunities exist for operators to capture occupancy and drive growth in the coming years.
Construction, supply lag behind demographics, demand
Construction of new senior living communities has not kept pace with the expected number of older adults seeking senior housing in the future. The industry faces a shortage of new supply, compounded by the aging nature of existing properties. As properties age, some may be repurposed, presenting a challenge for the sector. Demographic shifts are expected to drive significant demand for senior housing, but the industry must overcome the obstacles of low supply and aging properties to meet the needs of the growing senior population.
New NIC metric shows opportunities for operators to capture occupancy
NIC’s new metric, absorption-to-inventory-velocity (AIV), provides insight into market health and occupancy trends. Despite challenges in new supply, markets have shown the ability to absorb new units at a rate higher than development. The industry’s occupancy recovery has been promising, with the potential for record-setting occupancy levels in the near future. Operators must be mindful of regional differences to tailor their strategies for success in the evolving senior housing landscape.
