Senior housing development shortfall looms large
Opportunity knocks for investors in senior living construction
Senior housing in the United States is rapidly approaching a critical shortage, industry insiders warn, and that’s good news for investors. While the demand may be of concern for those considering moving into a senior living development in the coming years, for those interested in expanding their portfolio in the senior housing sector, the opportunity is golden now.
Study shows critical demand in coming years, short supply
According to a recent report that projects demand and supply for the senior housing industry, immediate action is needed to address a senior housing shortage amid accelerating demand. The NIC MAP Vision report, Senior Housing Outlook, projects a shortfall in senior housing units of 550,000 by 2030. According to their calculations, that means investments in the sector are projected to fall short by $275 billion. Investors who jump on the opportunity will build out their portfolio with a sector that forecasters say stands to offer solid returns over the long term.
The senior housing industry has faced several challenges over the past several years, not unlike most industries: the global pandemic, workforce shortages, and increased interest rates with suppressed capital markets. But industry insiders have their eyes on the long-term potential for senior housing development, and they see resilience (as do our senior living development design-build specialists), according to the study. Demand is expected to far outpace supply within the next five years, and savvy investors are beginning to take notice.
Study indicates the senior housing recovery is here: It’s time to build
When it comes to the senior housing industry, all eyes are on the baby boomer generation, what they want for their next chapter, and how we can build the future of senior housing to suit this sizeable generation. They aren’t the only ones checking out senior living options; if you missed it, be sure to check out our recent article about how Gen X is on deck. But as the NIC MAP Vision report illustrates, the first baby boomers turn 80 next year, and the current absorption rates in the senior housing industry have already surpassed the levels we saw before the pandemic, increasing by 40% versus 2023, which was already at a historic level. At this pace, the industry will fall 50% short of the inventory needed by next year. While many see this as alarming, it’s exciting for those ready to expand their senior housing portfolio. The anticipated demand for senior living options due to this anticipated shortfall could quickly yield results for the investors who are ready to build or acquire/remodel for this discerning generation entering the senior housing sector.
The design and build construction model can make the most of this moment
No investment can be taken lightly; partnering with the right team of commercial construction general contractors is key. The design and build model of construction offers numerous benefits and efficiencies over old-school approaches to commercial builds, with a streamlined process, a single team working toward a shared goal of your vision, and change orders virtually eliminated. If you’re considering developing the future of senior housing in La Crosse, WI, or Rochester, MN, and the rest of our region, our design and build professionals can help you make the most of this opportunity. Contact us today for more information and to get started using our robust predevelopment services, which can ensure you are positioned well to meet the rising demand for senior housing development in our market.