2016 Senior Housing
2015 was a tremendous year for the senior housing industry. Investors and people outside the industry attended conferences in astounding numbers. New players are ready for their senior housing investments. Seasoned experts and operators have reaped the benefits of a long-term presence and newfound energy has given secondhand assets another chance while plenty of construction takes place all over the country.
In the past year alone, the senior housing space provided a record number of assisted living facilities and other senior living property investments. Valuations have skyrocketed and more and more people are interested to buy healthcare properties.
With 2015 ending on a high note, people are split over what the next year holds. Fortunately, the general prediction indicates consistency and overall growth.
Keep an Eye On These Key Metrics
Numbers and metrics in the senior housing industry were favorable for players all around. No one expects these valuations to dramatically change. Senior Housing valuations are predicted to hold steady, even with abundant construction in skilled nursing and assisted living facilities.
The only variable to watch for is the potential for interest rates to rise. On December 16, 2015, there was a raise in the federal funds rate, which may reflect an increase in the cost of capital for buyers. This is already evident with REITS.
For conventional borrowers, this is a slight increase with little consequence. However, if the costs of labor and other expenses continue to rise, and or pick up pace, it is likely to contribute to a persistent and escalated increase in inflationary pressure. This forces federal funds rates to rise at a faster pace, affecting all parties of transaction on a grander scale.
Rental rates for assisted living facilities should register the same amount of growth equivalent to rising labor costs. However, because the industry itself is need-driven, transactions to buy healthcare properties or list assisted living facilities for sale should remain high.
No announcements have been made for cuts in Medicaid or Medicare for skilled nursing facilities specifically, which should help stabilize projections for skilled nursing in 2016.
Apart from possible rise in interest rates, all other metrics point in favor for investors, buyers and sellers in the senior housing industry. With a high level of construction taking place nationwide, assisted living facilities and skilled nursing facilities should experience little turbulence with the coming year, however, it may be a different story when the new facilities begin to open for business.
Senior Housing Brokerage for 2016
The JCH Consulting Group leads in senior housing sales. Our team of investment specialists is your best resource for a successful transaction in the senior housing industry. No matter the state of your portfolio or your goals for the next year, we make your choice to buy assisted living or nursing homes intelligent and rewarding.
As your skilled nursing and assisted living brokerage, we provide free business valuations, industry insight and other investment services. We excel in skilled nursing sales, assisted living sales, independent living sales and all senior housing investments.
To meet your JCH Group investments specialist, contact one of our team members at your convenience.