The past several years have been historic for the senior housing industry. We have seen and continue to see very high construction volume. Today a record number of people are seeking opportunities in senior housing investments. With the senior housing industry growing rapidly some potential issues are beginning to show themselves.
Operators often worry about how these new facilities will fare against the competition and what it would mean for market valuations. How long will they take to fill? Will they ever fill and stabilize?
Before those answers reveal themselves, the first question is, who will staff these facilities?
Read: Management Contracts In Senior Housing
The Labor Pool for the Senior Housing Industry is Running Dry
Memory care facilities and assisted living facilities are appearing at every corner. While new buildings add value to the senior housing industry, operators and investors have repeatedly expressed concern over how to staff these new buildings and fill them with residents.
The riskiest stage for any new senior housing investment is when the doors to the facility first open. The empty beds must be filled. As a typical goal, about 25 to 30 percent of the beds are pre-sold before opening. From there the fill up phase of the facility begins. Quality staff members such as caregivers, nurses and administrators are crucial, particularly during the fill-up phase of a new facility. Once those doors open, it is the staff that attracts and retains residents.
It takes high quality labor for a facility to be successful. That being said, good, quality labor is becoming hard to find in the senior housing industry. It is difficult to fully staff a 100+ unit facility right the first time. However, to see a return on senior housing investments, it is wise to recruit talented staff members from the start.
Read: 2017 Senior Housing Forecast
Protect Your Housing Investment and Attract Talent
The senior housing industry as a whole is short on quality labor. While some operators tote one star player, that will not be enough. A healthy senior living facility requires a team. To remedy this shortage, growth of the labor pool will have to happen organically.
Hiring out of staffing agencies has worked in the past, but there simply are not enough high quality caregivers. Operators will need a new method or provide a strong incentive to recruit new talent. This may mean that the senior housing industry will take new recruits and train them in house.
Despite the setback of acquiring good labor, the senior housing industry still has many opportunities. Operators who prepare and plan properly, will have healthy growth in their housing investments.
Choose the JCH Group for Your Housing Investments
The investments specialists at the JCH Group have overcome every obstacle that the market has presented. With extensive experience in building strong deals and portfolios, our team of experts can help you navigate your way through the potential labor shortage.
Protect and grow your senior housing investments with the JCH Group. We are available for consultations and free business valuations. Trust in our team to secure your spot in the senior housing industry.