The shift from building communities with only one level of care to building with an entire continuum of care seems like it could be here to stay in senior living.
Dynamic pricing, which some providers have touted as a more effective and technologically sophisticated way of setting rents, is most likely on its way out.
That’s according to the Winter 2018 Seniors Housing Investor Survey and Trends Report from professional services firm JLL (NYSE: JLL).
The survey included more than 250 potential respondents within the senior housing and care space. Approximately 28% of respondents identified as senior housing operators, 23% identified as senior housing developers and 19% identified as senior housing lenders.
Approximately 70% of respondents believe that the shift from single-level-of-care communities to continuum-of-care communities is “definitely here to stay,” the survey results show. Similarly, the trend of focusing on urban infill sites for new development is also thought to be long-lasting, with 53% of respondents indicating that it is definitely here to stay, and only 6% claiming that it is a “flash in the pan.”
Despite the fact that the process of developing or re-developing in urban areas is “often long and arduous,” according to McCaffery Interests President Dan McCaffery, many senior housing companies in recent years have taken to building communities in urban, infill locations. Houston-based Belmont Village Senior Living, for example, is currently building a 160-bed community in Chicago’s Lincoln Park neighborhood, and health care real estate investment trust (REIT) Welltower Inc. (NYSE: WELL), is developing a 15-story community in Manhattan, New York.
The futures of other, once-emerging senior housing trends are unclear, the findings showed.
For instance, approximately 53% of respondents said that the trends of “optional a la carte pricing of services in independent living” and the “emergence of private-pay ‘seniors only’ apartments as a major subsector” could have legs. Another 47% thought the same thing about the trend of operating companies shrinking and becoming more regionally focused, rather than growing and and becoming national in scale.
Some trends, meanwhile, are thought to be on their way out. Take dynamic pricing, or the practice of adjusting rents weekly, or daily, based on competition and demand—50% of survey respondents indicated that they believe this trend is just a flash in the pan, compared to 12.5% of respondents who said they felt it is here to stay.
A couple of big-name senior housing providers have touted dynamic pricing as forward-thinking over the past few years. Massachusetts-based Five Star Senior Living (NYSE: FVE), for example, rolled out a dynamic pricing program in 2016, following in the footsteps of independent living giant Holiday Retirement. At the time, the pricing model was thought to be the key to speeding up move-ins and standing out from the competition.
Written by Mary Kate Nelson