Investor preference for acquisition and development in senior housing has “fallen off a bit” for the coming year, Byron Carlock, leader of PwC’s U.S. real estate practice, told McKnight’s Senior Living.
PwC and the Urban Land Institute released “Emerging Trends in Real Estate 2020 report” today, reflecting the results of a survey and interviews with dozens of investors and developers.
“It looks as though the supply is continuing, which I worry could affect the profitability of the sector,” Carlock said of senior housing. “There is still a vibrant seniors housing, assisted living and age-restricted development community. The boomer population growth and aging would certainly point to the need for more. But I think, peeling back the onion, behavior and continued delay of entry into those products may be moving us toward an uncomfortable oversupply in certain markets.”
Despite potential oversupply and other issues, senior housing still was ranked second-highest in the report among residential property types for investment and development prospects for 2020, after only single family–moderate/workforce.
For commercial / multifamily subsectors for 2020, senior housing ranked fourth of 24 property types for investment prospects (after fulfillment, warehouse, and moderate-income/ workforce apartments) and third for development prospects (after fulfillment and warehouse). Nonetheless, the report deemed prospects as “fair.”
Carlock’s advice for investors and developers? “Don’t discount the impact that’s growing for home technology, the internet of things, improved telecommunication and the shared economy,” he said.
The big senior-housing message from the report, Carlock said, “is the convergence among the product types and the different ways that seniors are choosing to age.”
“Advancements in technology this year really stood out,” he said. “Boomers continue to delay their moves into active adult and assisted living, some because they’re working longer. But we’re also seeing some interesting moves in technology that are changing the age of entry, and it’s also affecting occupancy.”
Interviewees also talked a lot about mixed-use communities and intergenerational housing, Carlock said.
“We’ve also noticed that ride-sharing is expanding the amount of time a senior can stay in their home after losing the ability to drive,” he said. “And then, growth in the home healthcare sector that makes more services available on-demand — that is seeming to almost encourage more aging-in-place longer.”