60 Seconds with Steve Monroe: Investors Need Some Straight Talk
I know we live in a litigious country, and public companies have their teams of lawyers and PR consultants to protect them, telling them to disclose a minimum amount of information. But don’t you think it is time for some straight talk? I do. We are coming out of the pandemic distress, slowly for some and not as slow for others. Butwith census growth not what it was in the second and third quarters of 2021, let’s admit that this will be a long slog. We need both large census increases combined with margin increases. We will not get both as long as labor costs keep rising and inflation levels remain at 40-year records. And it is doubtful we will get back to the census levels of 2014-2015... Read More »
The Rise of Active Adult
We’ve talked about the new active adult sector a lot lately because a lot of people are talking about it. First, several years ago, our inboxes began filling with announcements of groundbreakings for this new product type, and as those accelerated in the last couple of years, we started to see more acquisitions of the communities, which had in many cases reached 100% occupancy in a matter of months. More seniors housing and multifamily investors took notice, and as construction slowed throughout the pandemic and as operators dealt first with COVID then with lower occupancy and labor costs, the sector was seen as a supremely safe investment. And we had to agree. But as the sector begins to... Read More »
60 Seconds with Swett: Welltower Grows Its Stake in Active Adult
Active adult’s meteoric rise has been a sight to see, and Welltower seems to have its eyes trained on the sector too. In a business update, the REIT revealed a major acquisition of 25 active adult communities, including 18 open and stabilized communities, two in lease up and five under construction, for a total of $502 million, or $172,000 per unit. The communities cater to the middle market, with rents averaging $1,300 a month, and the properties are in secondary and tertiary markets. Given what Welltower paid for the communities, and what the portfolio could be earning based on full occupancy, it seems they got a good deal, but we wonder exactly how much of a rent increase their current... Read More »
60 Seconds with Steve Monroe: Do We Really Have To Worry About A Recession?
We just can’t seem to get a break. Just as we are coming out of the pandemic morass with some decent census increases since March of 2021, now we have to worry about a looming recession and stagflation. Many people in the sector have only seen a growing economy in the past decade and inflation rates hovering between zero and 2%. Stagnation? Never heard of it, well, not for a few decades at least. As a result, we thought we would take a look at what happened to the senior care sector in the last major recession in 2008-2009, as well as the mini-recession in 2020, and see what exactly happened in our sector and what might happen this time around. What we concluded is that... Read More »
60 Seconds with Swett: Occupancy Optimism in the Seniors Housing Market
When we did our analysis of NIC MAP census data in late 2020, we discovered that from 2009 to 2020, there was only one year when the assisted living sector did not report a Q1 decline in average occupancy. That was in 2012, when census stayed flat. Not only that, every year after 2012 reported a Q2 decline as well. All this showed us that the road to recovery for the seniors housing market would be long following the pandemic, and much longer than most optimistic predictions at the time. Last year’s first quarter continued the trend, as the industry bottomed out and most public providers hit their lows too. Although, vaccines had only just started being distributed to seniors, and there... Read More »Schedule a demo
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