Integrated memory care and assisted living communities, with dedicated memory care wings, are a “major trend” among developers and investors because they provide a “pipeline” of residents to memory care and because they are more competitive in monthly rent than freestanding memory care communities that were built at a higher price point.

That’s one of the many messages from the Marcus & Millichap Second Half 2019 Seniors Housing National Report.

“Due to the elevated risk profile of a standalone property, investors will continue to seek out integrated campuses this year to provide a buffer against potential challenges in the industry,” the report predicted. 

Adding memory care wings also is a way that buyers are increasing profits at older communities to make them more competitive with newer properties, according to the report.

“Families’ need to care for their loved ones with memory issues will maintain demand for memory care units, keeping many investors active this year,” Marcus & Millichap said. “More buyers will hedge their investments with a focus on assets that include another seniors housing component.”

Overall, Marcus & Millichap said, investors — including ones new to the sector — are “excited” and “brimming with optimism” about senior housing, with a yield profile deemed to be favorable, demand thought to be consistent and a perception that the sector is resilient to recession compared with other asset classes.