Where independent living inventory growth is strongest
Investor interest in independent living is increasing due to healthcare reform and changes to Medicare and Medicaid as well as baby boomer expectations. (Photo: John Merkle)
Seven metropolitan areas account for approximately one-third of the inventory growth in independent living over the past year, according to National Investment Center for Seniors Housing & Care Senior Principal Lana Peck.
More than 11,000 independent living units were added to inventory in primary and secondary markets during that time, Peck wrote Wednesday in a blog post. Dallas; Philadelphia; Columbus, OH; Fort Myers, FL; Houston; Detroit; and Austin, TX, were the cities where the aforementioned growth occurred.
“While Minneapolis and Miami also saw strong independent living inventory growth over the past year, Baton Rouge, Charleston and Syracuse were geographies that experienced the greatest percentage gains in inventory,” Peck wrote.
Construction starts peaked in secondary markets in mid-2016 and in primary markets in mid-2015, she said, adding, however, that the rate of starts in primary markets now appears to be flat or increasing.
“Interestingly, while the data shows a potential increase in independent living starts in the 99 primary and secondary metropolitan areas tracked by NIC MAP, it also shows a slowdown in starts for assisted living, which may signal increasing interest in independent living from investors and developers,” Peck wrote.
Indeed, as McKnight's Senior Living previously reported, recent data from specialty investment bank Ziegler, professional services firm JLL and commercial real estate services and investment firm CBRE indicate increasing investor interest in independent living due to healthcare reform and changes to Medicare and Medicaid as well as expectations about the future needs and wants of baby boomers.
Independent living occupancy in the first quarter was 90.3% across the 31 primary markets that NIC MAP tracks, Peck said. The rate has been higher than 90% since early 2014, she added.
Read her entire blog post here.