JLL Survey: Investors Covet Independent Living, Assisted Living, Avoid Skilled Nursing

Click to view larger. Source: JLL Click to view larger. Source: JLL

CHICAGO — Investors in the seniors housing space have a strong preference for independent living and assisted living facilities, according to the Year-End 2017 Seniors Housing Investor Survey conducted by JLL.

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. The survey included more than 250 respondents including investors, operators, developers and lenders in the seniors housing and healthcare space.

Approximately 79 percent of respondents declared independent living to be either “somewhat desirable,” “very desirable” or “extremely desirable.” Approximately 81 percent of respondents felt the same for assisted living.

Communities with a combination of offerings, particularly on the private-pay side, fared even better. A full 97 percent of respondents rated communities that offered both independent living and assisted living as “somewhat desirable” or higher, while none rated such a community as “not at all desirable.”

By contrast, 70 percent of respondents found skilled nursing to be either “not at all desirable” or “not so desirable.” Entrance-fee continuing care retirement communities (CCRC) also got negative rankings from respondents, with 69 percent rating the sector “not at all desirable” or “not so desirable.”

Looking forward, investors expect to see the recent shift from single-level-of-care facilities to continuum-of-care facilities to continue. Nearly 70 percent of respondents to the survey said this trend is “definitely here to stay.” But the presence of the skilled nursing in CCRCs led respondents to rate them much lower than all-private-pay facilities.

“Increasingly, smart capital is moving toward facilities offering a continuum of care, and many are seeking urban infill locations where there is some protection from competition,” said Charles Bissell, managing director at JLL Valuation & Advisory Services. “Continuum of care facilities allow residents to age in place more seamlessly and this is a benefit to both the consumer and the operator.”

Though the outlook for seniors housing overall is bright, there are a few risks investors are taking into consideration. According to the survey, risks on investors’ radar are overbuilding, rising labor costs, and attracting and retaining qualified talent for their facilities.

To read the full report, click here

More News