You’ve probably noticed senior housing and care has become a popular asset class among both institutional and individual investors in recent years. It has already outperformed other noted real estate sectors and we believe it will continue to be a favorable opportunity due to impressive demographic fundamentals.
The term ‘senior housing’ is a broad classification for housing communities that cater to long-term residents over the age 65. As with most property type classifications, senior housing encompasses many different types of specialized facilities. Today we’ll take a closer look at independent living, assisted living, and memory care facilities. We will also explain skilled nursing facilities, which although occasionally will get grouped with senior housing, they are actually defined as senior care. Before you invest in one of these types of facilities, you should understand their specialties and how they differ from one another.
Independent living communities are designed with multiple units meant to provide residence and amenities for senior adults. The units are often one to two-bedroom apartments, complete with kitchens and laundry facilities. Residents have the ability to come and go as they please, cook their own meals, and care for themselves while receiving the social benefits of living in community with other senior adults. Supportive services are typically available to residents upon request. These services can include: meals, housekeeping, laundry, fitness classes, social activities, and transportation. These services are usually offered to the residents for an additional cost to their monthly housing fee. Some independent living facilities are strictly residential units where senior adults live without the options of additional supportive services. These types of facilities are more often referred to as senior apartments.
Assisted living facilities are designed with multiple private units meant to house residents who are disabled or unable to live independently. In addition to coordinating services of outside healthcare providers, assisted living programs provide supportive services to residents. These services can include: meals, laundry, housekeeping, medication reminders, and assistance with activities of daily living such as bathing, grooming, eating, dressing, toileting, shopping, and managing money. Because assisted living facilities are regulated on a state level rather than a federal level, differences exist between the services and level of care offered from one assisted living facility to the next.
Memory care facilities are licensed healthcare facilities that specialize in caring for senior adults living with Alzheimer’s Disease, Dementia, and other cognitive impairments. These facilities exist to provide an assisted living environment for their residents to continue to live engaged, social, and active lifestyles while their physical and emotional needs are met by an onsite nursing staff. Residents typically receive services that include: activity planning to stimulate cognitive abilities, meals, assistance with personal care and medications, housekeeping, laundry, exercise programs, and transportation. Additionally, these facilities are highly secured to protect residents prone to wander. While many memory care units operate independently, others are a special care unit within a general assisted living facility.
Skilled nursing facilities have a licensed nursing staff 24 hours a day for patients requiring care and supervision. Often times these facilities offer rehabilitation and other specialized services to those recovering from an accident, surgery, or other health issues. These services could include physical therapy, speech therapy, occupational therapy, social services, medications, and other services necessary to the health and wellness of the patient. These facilities are more appropriately defined as senior care rather than senior housing. The patients stay is usually shorter-term and they are able to receive a higher level of treatment than the other previously mentioned facility types.
As you can see, these facilities can differ greatly in the acuity or level of care they offer. This completely changes how the property is valued. Next week we will show you what you should look for when investing in these asset types and how they differ from the more traditional real estate investments out there.