In recent years, the construction industry has experienced a decrease in new construction starts, leading to a temporary boost in short-term occupancy rates. However, this trend could pose challenges in the long run.
As we look ahead to 2024, the senior living sector is facing the dilemma of aging communities in need of upgrades or removal from the market. Coupled with the increasing demand from the aging baby boomer generation, the current rate of new construction may not be sufficient to meet future demands.
According to Omar Zahraoui, a principal at the National Investment Center for Seniors Housing and Care (NIC), the industry is projected to experience a period of low supply and high demand for at least the next few years. With only a 4.1% increase in senior housing inventory by 2027, falling short of the anticipated demand growth, the industry is facing a potential imbalance.
Zahraoui also pointed out that while senior housing units are being filled at a rapid pace, new construction is not keeping up. Demand for senior living services has been on the rise, with a significant increase in occupancy rates for assisted living and independent living properties.
Looking forward, there is a pressing need for adaptable buildings with a focus on technological infrastructure. Joe Daniels of Direct Supply Aptura emphasized the importance of future-proofing senior living communities to remain relevant in an evolving market.
