There is a lot of chatter about the potential for a recession hitting the U.S. economy soon. You’ve seen the metrics on slowing growth, both domestically and even more so globally, and the impact that tariffs have had on supply chains, manufacturing and investment. And the uncertainty of the 2020 election will not help growth in the next year, barring some major trade agreement with China. But if we do indeed plunge into recession, what will the impact be on assisted living?
The sector was famously “recession-resistant” in the last downturn, and since nobody is predicting a financial calamity like that in the next few years, that should bode well. Assisted living values have been rising consistently since the Great Recession, but will that growth continue unabated? The headwinds currently facing the industry, from labor and overdevelopment to aging properties and declining census, combined with a wider economic slowdown may tarnish that “recession-resistant” distinction.
With all of this, how should investors be approaching the assisted living M&A market? Are 5% cap rates, even 4% cap rates, sustainable, even for “A” quality trophy properties? Does that mean it’s time to sell? And for how much? That’s what we’ll be trying to answer at our next webinar, “Assisted Living: Acquiring and Selling in Today’s Turbulent Market,” on Thursday October 17th at 1PM.
Our panel of experts will include Jay Wagner of Cushman & Wakefield, Matthew Whitlock of Berkshire Residential Investments, Chris Hollister of Pegasus Senior Living, and moderators Steve Monroe and Ben Swett of The SeniorCare Investor. See you there.
