Washington, D.C.-based American Seniors Housing Association (ASHA) has published the Seniors Housing Statistical Digest, 1999-2000 and the Seniors Housing Construction Report 1999. The digest focuses on demographics and statistics that will affect seniors housing, while the report covers seniors construction by type and location, and reviews construction activity by state.
The Seniors Housing Statistical Digest uses tables and graphs to show detailed demographics of the general population and seniors housing resident population. For example, ASHA found that the population of Americans aged 85 and older will soar from about four million in 2000 to about eight million by 2030. The digest breaks down the growth of the population of Americans 65 and older and 85 and older by region, state and calendar year. The digest also ventures into development cost data, administrative data and construction data.
To compile the Seniors Housing Construction Report, ASHA sent 115 surveys to nationally recognized seniors housing developers. ASHA also conducted its own research and obtained construction data from SEC filings. Some notable findings: There are approximately 19,500 professionally owned and managed seniors-housing residences with a total capacity of 2.2 million in the United States; free-standing assisted-living properties represent 44% of new seniors construction; and California has surpassed Texas as the state with the most seniors-housing construction activity.
Both publications can be ordered by calling ASHA at (202) 775-0112.
The truth is out there I receive countless faxes and e-mail from faceless consultants, PR firms I've never heard of and insiders who all have different stories to tell. Many try to predict industry trends, and back up their position by quoting "experts." While sorting through the pile of faxes, I've noticed several say the same thing: The seniors housing market is a hot real estate sector, but lenders remain leery about investing. With so many faxes and reports saying the same thing, it must be the truth, right? Maybe not. (Please see "Seniors housing investing wide open," on page 8.)
The general consensus among my growing pile of faxes is that lenders are hesitant to invest in something they are not convinced seniors really want. Most have taken the classic wait-and-see approach to investing in this sector. Some phone calls to sources in the business proved those releases and faxes may not paint the complete picture.
"I think the opposite probably is being talked about right now," says David Schless, executive director of the Washington, D.C.-based American Seniors Housing Association (ASHA). "Perhaps there's been too much capital over the past few years and that has saturated the market with new assisted-living product. Now, I don't agree with that perspective, but you are hearing more and more that there's been too much [capital]."
Chicago-based Cambridge Realty Capital chairman Jeffrey Davis says a lot depends on perspective. "Both views are true to some extent," he says. "The commercial real estate operators are slow to embrace things they don't know like seniors housing, as opposed to office and industrial development, shopping centers or apartments. I'd say the market is slow to embrace seniors housing due to a lack of understanding about the business.
"Someone from the healthcare discipline could easily say there is too much capital and over-building in assisted living," he continues. "That might be true on a micro-community-to-community basis, but not on a macro basis."
Schless says he expects next year's annual ASHA construction survey to shed light on the topic. "The ability to access capital is much different today than it was several months ago," he says. "I would envision much slower senior housing [construction] - particularly assisted-living construction - by the time we do our next survey next spring."
So, who's right and who's wrong? That depends on who you ask. But I do believe the best way to find the truth in this matter is to rely on good, old-fashioned reporting. Faxes and the Internet cannot replace putting one's ear to the ground or talking to the people who are in the thick of the industry. Expect to hear more from me in the future, as NATIONAL REAL ESTATE INVESTOR continues its "beat" style of reporting. Please feel free to call or send an e-mail if I got it wrong, and, especially, when I get it right! I want to hear your ideas and your expert opinion. I want something more than just the fax; I want the truth.