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Tomorrow's Senior Facilities Will Look Vastly Different

Though they're facing challenges today, seniors housing developers and operators will have to make some major changes to maintain their future success.

By Sule Aygoren Carranza | Updated on September 29, 2009

NEW YORK CITY-Traditionally considered a recession-proof sector, the seniors housing market is starting to become a bit strained under the weight of the downturn. On the performance side, vacancy rates are going up, while the tough conditions have forced developers to sideline or stall projects.

As with most other commercial real estate sectors, the lack of liquidity is the number-one challenge for those in the seniors housing niche, according to Jones Lange LaSalle’s 2010 outlook for the segment. The weak housing market, which makes some older homeowners hold off on selling their properties in favor of senior living, is also playing a major role.

Indeed, in the 12-month period leading up to March 31, 2009, the total number of senior housing units starting construction was down 37% from the prior year, and 45% compared to two years ago, report the National Investment Center for the Seniors Housing & Care Industry and the American Seniors Housing Assoc. Their recently released joint study, “2009 NIC/ASHA Seniors Housing Construction Trends Report,” examines senior apartments, independent living, assisted living and nursing care facilities and continuing care retirement communities under construction as of March 2009 in the nation’s top 100 metropolitan markets.

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