After years spent viewing seniors housing as a potential cash cow given the graying of the baby boomer generation, the coronavirus pandemic is forcing investors in the sector to recognize that they are “more than mere landlords,” according to a Financial Times article Monday. Instead, many have become critical service providers who are facing rising expenses to clear and disinfect properties, provide protective equipment and reinforce staff.

“The cost structures of all these communities are going to go up,” David Schwartz, the chief executive of Waterton, a Chicago-based developer that owns Pathway to Living, told the newspaper. “You’ll see certain investors who don’t want to be in it any more because the margins are compressed.”

The article also pointed to other pitfalls of the sector amidst the pandemic, including falling share prices of large seniors housing operators such as Brookdale Senior Living and real estate investment trusts such as Ventas, as well as reputational damage and greater regulatory scrutiny.

Billy Meyer, who oversees lending to senior homes for Columbia Pacific, a Seattle-based real estate group, also told the Financial Times that he often sees developers rush into seniors housing, only to discover that they cannot seem to push occupancy levels above 80%.

“It’s a pretty risky business to get into if you don’t know what you’re doing,” said Meyer, who describes seniors housing as a hybrid of traditional real estate and a full-service hotel — with the added complexity of healthcare. “People underestimate the healthcare aspect of the business. It isn’t traditional real estate. It is truly healthcare housed in real estate,” Schwartz added.