Retirement Communities Expected to Grow Sales, Mergers Ahead

Sales for retirement communities are expected to average a 3.2% growth rate to total $53.9 billion this year, predicts a report from IBISWorld. 

Higher levels of acuity will drive industry growth, the report states, with memory care being one pillar for companies seeing revenues increase.

“An aging population and growing need for dementia care (care provided to those with memory impairment) are stimulating much of the industry’s growth,” said Anna Son, IBISWorld industry analyst. 

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While the housing market’s contraction has hindered revenue growth due to an inability of homeowners to sell their homes and move into retirement communities, most companies have been able to maintain profitability through raising rents and entrance fees, the report finds. 

“In addition, industry profit margins have benefited from the cutback in the supply of facilities due to restrained construction, which increased occupancy levels in existing facilities,” Son says. 

Factors including an improving economic climate, an aging population, health care reform and new services will also lead to industry growth, the report states, with revenue growth expected from today through 2018. However, supply is likely to lag demand, with mergers and acquisitions anticipated in the coming five-year period, IBISWorld writes. 

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Written by Elizabeth Ecker

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