Despite recent market data and analysis that indicates the independent living and assisted living sectors may be past their peaks, senior housing market participants may still keep a positive outlook for the coming year.
The seniors housing market is generally healthy, and while 2016 won’t be a banner year like 2015, it should still be a good year, says New York-based independent commercial real estate valuation and consulting firm Integra Realty Resources (IRR) in its in-depth seniors housing outlook 2016 report.
Since the publication of IRR’s Viewpoint 2016 report in January, which included an abbreviated seniors housing outlook for the year, there’s been a bit more clarity about the state of the investment market, Charles Bissell, IRR Seniors Housing & Health Care National Practice Leader and author of the report, told Senior Housing News.
“We know that transaction volume has slowed, that the Big 3 REITs are not nearly as aggressive as they were last year, and we also have some clarity related to the new construction concerns,” Bissell said. “We have seen a little bit of softening of occupancy, and there are growing concerns that there’s going to be saturation in certain markets.”
Worries still exist industrywide, despite seniors housing remaining a very attractive investment sector that will continue to attract new capital from a variety of sources, Bissell said.
More than 80% of active market participants believe that the independent and assisted living markets are at or past their peak, according to a survey conducted by Bissell in January prior to a roundtable at the American Seniors Housing Association (ASHA) annual conference. Respondents expressed more optimism about the skilled nursing market, with 39% indicating that the market has not yet peaked, and just 19% saying the skilled market is past its peak.
And when it comes to the Big 3 REITs, they may have peaked in terms of their aggressiveness, Bissell said.
“I think they were probably most aggressive last year, and I think that all the REITs now are being more selective and will continue to be selective in their acquisitions,” he said.