The senior housing industry has been beset by oversupply challenges in 2017, with new competition taking a bite out of occupancy.
However, supply and demand dynamics differ significantly from market to market. The following 11 metropolitan areas are hotspots to keep an eye on. Relative to their existing inventory, they’ve seen their senior housing stock grow more than 10% over the course of 2017, according to data shared Wednesday in a blog post from the National Investment Centers for Seniors Housing & Care (NIC):
– Albuquerque, New Mexico
– Austin, Texas
– Baton Rouge, Louisiana
– Charleston, South Carolina
– El Paso, Texas
– Greenville, South Carolina
– Jacksonville, Florida
– New Orleans, Louisiana
– Ogden, Utah
– Salt Lake City, Utah
– San Antonio, Texas
In the third quarter of 2017, annual assisted living inventory growth reached 6.5% nationwide. This was the highest level since NIC began reporting data in 2006. While assisted living occupancy has been struggling and stood at 86.6% as of the third quarter, the good news is that demand is strong.
Annual absorption for assisted living, a measure of demand, accelerated to 5.1% in the third quarter—this is the highest rate in the history of NIC data reporting.
Still, for senior housing generally, annual inventory growth is outpacing annual absorption.
Despite this, the fact that so much of the construction is occurring in select metro areas means that there’s still plenty of opportunity for new investment in the space, as long as market selection is done carefully.
“Activity has been concentrated in relatively few markets … that’s helping to keep fears of widespread overbuilding in check,” said NIC’s Lana Peck, senior principal, research and analytics, at the group’s annual Fall Conference last month in Chicago.
Written by Tim Mullaney