Brookdale Not Concerned About New Construction, But Ready

Despite hot spots for new construction in certain areas nationwide, Brookdale Senior Living is prepared to handle new senior living projects getting developed close to one of its existing communities, but overall isn’t too concerned about the new development scene. 

“We’re relatively sanguine on construction,” said Andy Smith, CEO, during a presentation at the 2014 Bank of America Merrill Lynch Health Care Conference, held last week in Las Vegas. “There are a lot of people who are quite concerned about the level of new construction growth. We’re not.”

The latest data from the National Investment Center (NIC) for the Seniors Housing and Care Industry for the first quarter of 2014 actually showed new construction starts as a share of existing inventory trending down slightly. 


“When you take the level of new construction starts and compare that to the size of the existing inventory today, it’s really not vert big,” said Smith. 

Taking into account that the demographic of seniors aged 80 and older who can afford senior living services is about to grow “pretty dramatically” in the new few years, the picture doesn’t look too bad.

“In an overarching sense, we’re just not that terribly concerned,” he said.


The 0.1 percentage point quarterly decline in starts as a share of existing inventory in the first quarter of 2014 signals a moderating pace of senior housing construction, according to NIC, primarily as assisted living construction starts moderate. 

Still, Brentwood, Tenn.-headquartered Brookdale is realistic, and so it’s prepared for when new construction happens in areas where it has a presence. 

“You have to look at if [developers] are truly competing with you, and if it’s the same product type of your existing community,” Smith said. “We see some but it’s fairly isolated numbers of truly new construction competing with our communities. We have something called “new construction readiness action plans” designed to deal with the fact that you’ll have new competition.” 

And in most cases, communities have time to prepare for new competition. 

“You have plenty of warning—it takes several years to build these things,” Smith said. “That’s how we view it: mindful of [new construction] but not overly concerned.” 

Access Brookdale’s 2014 Health Care Conference presentation.  

 Written by Alyssa Gerace

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