NIC Dallas Recap
The National Investment Center held its regional conference this year in Dallas, Texas from March 7 to 9, 2018. As usual, there was an excellent turnout. All segments of the senior housing industry were well represented including vendors, operators, brokers, managers, lenders, attorneys and others.
With so many like-minded investment specialists and players in attendance, it was easy to recognize the general consensus and outlook for the future of the senior housing industry.
Newcomers Enter the Senior Housing Industry
It became evident at the NIC conference that the senior housing industry remains attractive to new players, particularly investors and operators of other product types. While general attendance was robust, there was an unusually high number of new players or those with very little experience in the senior housing industry.
Investments in the senior housing industry are exceptionally attractive to investors simply because they yield returns that cannot typically be matched by other real estate asset classes. Because the backbone of the senior housing industry is healthcare, and therefore need-driven, the demand for these products will only increase.
The JCH team met several equity-lending partners prepared to enter the senior housing industry, and because of anticipated investment returns this is unlikely to change.
Expect New Product in the Senior Housing Industry
With the influx of inexperienced equity entering the senior housing industry, we can safely expect there to be a considerable number of new facilities opening in the coming years. However, because of these inexperienced operators and developers spearheading some of these projects, product design and efficiency may well be subpar.
These novice operators may experience several setbacks that cause them to miss pro-forma budgets. Causes may include poor design and location choices, insufficient funding, inappropriate partners or any variation thereof. As a result, while new senior housing investments open, many may well have to endure some turbulence, sometimes severe in nature.
However, overall, the senior housing industry remains bullish in demeanor. All sectors of the senior housing industry are busy with work. The components necessary for healthy senior housing investments—debt, equity and deal flow—are all in place.
The Senior Housing Industry Lacks Skilled Manpower
As with any business, operators still share the same worries. Within the senior housing industry, operators anticipate changes in interest rates and inflation. Most importantly, they worry about the lack of manpower or a skilled labor force in the senior housing industry.
With the number of new senior housing investments opening or set to open in the future, there simply is not enough talent to cover anticipated labor demand. It is already increasingly difficult for operators to find and recruit skilled people to work in the facilities. Unfortunately, talent and training are both limited.
This is a problem that many expect to grow worse before a solution emerges.
Make Your Senior Housing Investments with the JCH Specialists
The JCH Group is the preferred brokerage in the senior housing industry. Our investments specialists have unmatched experience leading, designing and closing senior housing investments in the senior housing industry.
No matter your experience level or standing, we have the tools and approach to make your next senior housing investment both intelligent and profitable. The JCH Group is your best resource in the senior housing industry.