Competition on a local level among senior housing operators was extremely heated in 2018. That is according to the 2019 Seniors Housing and Care Survey by Lancaster Pollard.
The Columbus, Ohio-based health care financial services company sent an online survey to nearly 4,000 senior housing executives across the U.S. last December. Over the following month, 249 respondents completed the survey.
The majority of respondents — 97% — described their local markets as either competitive or extremely so. That’s up from 87% in the 2018 version of this survey.
Respondents remain concerned about rising costs. Thirty-eight percent indicated it costs $551 or more, per bed, to maintain their competitive market position. That’s a 5% increase from 2018.
Additionally, operators are struggling with mounting pressures due to lower occupancy rates, increased per-bed costs, rising interest rates, as well as a gradual decline in construction starts relative to prior years.
While there are plenty of reasons to be anxious in the current operating environment, one area stood out as cause for greatest concern: 88% of respondents were most concerned with a shortage of workers over the next 12 months, up from 82% last year. That was followed by occupancy levels at 51%.
M&A, development forecasts
A growing number of owners indicated they are more likely to be buyers in 2019. Fifty percent of respondents indicated they would be likely or extremely likely to pursue an acquisition project, up from 40% a year ago. Those potential buyers may find a shortage of opportunities. Seventy percent of respondents indicated they would be unlikely or extremely unlikely to sell a senior housing facility in the next 12 months.
Redevelopment also proved popular with respondents. Seventy-seven percent indicated they would be likely or extremely likely to pursue a renovation this year, compared to new construction.
Meanwhile, 59% of respondents indicated they would be likely or extremely likely to pursue a new construction project this year. Last year, 62% of respondents indicated they would pursue new construction, and 75% of respondents were more likely to explore new construction two years ago. A shortage of construction labor, and rising labor and materials costs, are contributing factors.
Most promising growth prospects
Respondents remained bullish on the growth potential for affordable senior housing and Alzheimer’s and memory care. Forty-eight percent of respondents indicated those two product types would see the most growth potential in 2019.
But 28% have Alzheimer’s and memory care projects in the works, and only 9% have affordable senior housing projects underway.
The post Senior Living Competition Has Gained Intensity, Staffing Reigns as Top Concern appeared first on Senior Housing News.
Source: Senior Housing News