Q: Senior housing has experienced a number of cycles and headwinds, but will it successfully survive the current COVID-19 pandemic?
A: Yes, but things will be different, and the overall timing is still unknown.
Residential senior housing has been unfairly tarnished in the lay press, as it has been combined with skilled nursing facilities, which have experienced most of the deaths due to COVID-19. A stigma has developed regarding communal living in general — much of the public does not understand the difference. There will need to be more effective, objective communication of the different senior housing and care arrangements, and the good stories need to be told.
The industry response to COVID-19 will have an effect on all aspects of senior housing —residents, families, staff, operations, marketing and overall financial stability. Occupancies are dropping due to moratoriums on new resident move-ins. Operating with social distancing requirements and stricter safety protocols is increasing the cost of operations. One piece of good news is, unlike many other real estate sectors, senior housing operators are collecting rents.
The bottom line is, it appears to be the consensus of operators, investors, lenders and other professionals that the industry will be going through a challenging period that could last up to two years — and maybe longer. The near-term outlook may be troubling but, properly designed, positioned and communicated, senior housing ultimately will emerge as a safe and secure living arrangement — especially during a pandemic like COVID-19.