The Pandemic’s Effect on Senior Housing
The senior housing industry hopes to rebound in 2021, but it will first need to implement permanent changes to their facilities. The COVID-19 pandemic has exposed several existing challenges in the senior care sector. These issues must be improved for senior facilities to safely operate. Senior housing centers are currently looking to address several specific areas. These areas include infectious disease prevention, the addition of on-site lifestyle and social amenities, and the expansion of on-site clinical and telehealth services.
Changes to the Location and Physical Structure of Senior Housing Facilities
During the pandemic, 15.9 million people moved, many from large, densely populated areas to smaller, less populated areas. As a result, we should expect more development in those smaller markets, aligning with the aging population’s migration trends. And these new facilities may face different structural needs than we’ve seen in the traditional senior housing market.
The vulnerabilities of senior care facilities during the pandemic have changed the face of building requirements. These changes will certainly necessitate upgrades to ensure resident and staff safety. Some will simply need to adjust operational procedures, such as foot traffic patterns or entries and exits. But others will need to make larger changes, offering things like smaller dining areas to reduce the amount of people seated per room. One source also encourages senior facilities to provide semi-outdoor areas with large doors or windows that offer an open-air environment.
Senior Housing On-Site Amenities
In recent years, wealthy seniors have been the targeted focus of assisted and independent living centers. These facilities host hotel-like amenities including bars, bistros, and zero-entry pools. Investors such as Lloyd Jones are taking a unique approach to their senior housing investments. This company is continuing to focus its portfolio on “luxury healthcare” properties. In addition, they are also acquiring distressed properties, such as hotels with fitness centers and pools, converting them into independent-living facilities. These resort-style centers are designed to attract the middle market.
But now, as the dust from the pandemic settles, it is apparent that senior facilities must now focus on healthcare-specific offerings. We are already beginning to see a shift to implement expanded telehealth capabilities. In addition, some are providing in-house clinics, often staffed by third-party healthcare providers. And some centers are also adding concierge services that help residents coordinate their healthcare needs.
On top of the lack of on-site healthcare options, the senior housing industry previously lagged in technology as well. Now, due to the pandemic, the use of technology has accelerated across all facility types. Senior housing centers are offering new technologies such as telehealth, virtual tours, and other digital tools. And still, more technologies utilizing artificial intelligence (AI) are emerging, as well.
Planning for the Future
Some states are planning to create more senior facilities over the next few decades. Cities like Atlanta have been working toward more senior housing initiatives for years now. The Atlanta Regional Commission estimates that one in five citizens will be age 65 or older by the year 2050. There will be a need for housing communities that are affordable and offer conveniences like access to transportation or shopping centers. Georgia is among several states that are planning to make innovations.
The impact of the pandemic will have lasting effects on the healthcare sector of CRE, especially in the senior housing industry. With the continued aging of the baby boomer generation, changes in the senior living category will continue to develop. Our team of healthcare real estate advisors are continually watching the market and making note of these types of adjustments. Those who are interested in investing in senior housing can trust HBRE to review their needs and assist with any healthcare or senior housing transaction—[email protected].
If you are interested in learning more about investing in commercial real estate, or if you have questions about buying, selling, or leasing a commercial property, please contact an HBRE advisor. Our team of experienced CRE professionals have the skills and insight to assist with all property transactions. To reach out to us directly, email [email protected] or call 615-564-4133.
