Ziegler: 7 trends for senior living in 2016
The Federal Reserve's recent and planned increases in interest rates make early 2016 a good time for senior living organizations to take advantage of low borrowing rates, according to Ziegler.
Key trends for not-for-profit providers in 2016, according to the specialty investment bank's “Z-News” senior living finance newsletter:
- Growth in strategic affiliations, driven by the complexity of healthcare reform, technology demands, increased competition and leadership turnover;
- More joint ventures and partnerships, as a quick means of achieving growth;
- Continued technology efforts related to operational efficiency and resident care, and the creation of more executive-level positions related to the advancement of technology;
- Joint ventures to meet the needs of older baby boomers seeking home- and community-based services;
- Expansion of existing communities, or the creation of satellite campuses, using “land-banked” property nearby;
- Enhanced corporate oversight related to staff recruitment, retention and succession planning; and
- Accessing capital with low borrowing costs, before gradual rate increases. “The tax-exempt fixed-rate bond market is very favorable for senior living organizations to borrow at record lows, whether for rated organizations or strong unrated credits,” Ziegler says.