With stock prices plunging, the impact on the senior care market will be mixed.
Well, it’s been a rather interesting past week or so, with more volatility likely in the days ahead. But what does it all really mean, at least for the senior care market? Other than share prices tanking for the few remaining publicly traded providers, as well as the REITs which, at least until recently, were supposed to trade more like bonds, the one takeaway can be summed up in a word: caution. But we had sort of sensed this about two months ago, given the nature of the transactions in the market. But will a sense of caution curtail the vast development pipelines that we hear about? Too early to tell, and short-term gyrations usually do not impact long-term plans. Now, if the stock market drops another 5% to 10% in the coming weeks, we could have another ball game. The bigger issue is the economy and interest rates. If rates remain low, that is bad for seniors on fixed income, but also bad for providers and their ability to raise monthly rental rates. For developers and buyers, however, that goose will continue to lay low cost eggs. Still, I believe that the seven-year cycle itch needs to be scratched, and that may mean some dead skin will be falling off. The question is, whose?
