What will the Senior Housing Space look like after COVID 19
There has been much speculation about how the Shelter in Place orders will affect census at Assisted Living, Memory Care and Skilled Nursing facilities throughout the country. Most operators that we at JCH are talking to have, at a minimum, put in place very stringent protocols for accepting move-ins with most tapping the brakes. Is this a wise choice? In my opinion, yes. However, now is not the time to stop reaching out to the community prospecting for future residents. We must all keep in mind that moving into an Assisted Living, Memory Care and most certainly Skilled Nursing is in most cases not an option, it is need driven. Utilizing safe and effective marketing tools such as virtual tours, are helping facilities continue to reach those who need them and still protect potential residents, current residents, and staff.
What will happen to the facility values?
This is a bit difficult to answer, it will depend on several factors, the most important one being what the net operating income (NOI) looks like. If your NOI drops significantly, then so will the value of your facility; If census drops significantly, the value will also likely be affected.
Over 60% of residents in Skilled Nursing, Assisted Living and Memory Care facilities are on either Medicaid or Medicare, and the government certainly isn’t going to stop paying. Most “private pay” residents’ assets are either in cash or bonds, so the volatility in the stock market isn’t much of a factor in their ability to pay monthly rent and care fees moving forward. Therefore, an ability to pay is likely not an issue.
What does this all mean? We simply continue to provide outstanding care and compassion for the residents we are responsible for.
How long will the sale of Assisted Living, Memory Care and Skilled Nursing facilities take?
The consensus in the industry is that everyone needs to count on much longer due diligence and funding times. Again, until the restrictions surrounding the sector ease, due diligence cannot be completed because access to onsite visits by appraisers, inspectors etc. cannot be performed.
Are there buyers out there?
The answer is a definite yes, but the importance of vetting potential buyers is more important than ever. The more experience the buyer group has within the industry, the more likely it is they will be able to obtain a loan. Lenders that we have spoken to are still considering deals, but they are being very cautious about moving forward with inexperienced borrowers.
Work with The JCH Group for Your Senior Housing Investments
The JCH Consulting Group works with hundreds of operators, investors and specialists to successfully navigate the senior housing industry. With well-researched and informed decisions, our team routinely builds strong and solid portfolios.
No matter the size or type of real estate asset, we are your top resource in making the most of your senior housing investments in the senior housing industry. By sticking to longstanding industry principles, our guidance in the sector has always weathered storms in the senior housing industry.
For expert guidance, work with the investment specialists at the JCH Group. Learn more about the senior housing industry and receive a free business valuation at your convenience.