The Demographic Shift Driving Senior Housing Needs - An Ai Deep Dive - Senior Housing Investors

Episode Transcript
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John Hauber (00:00):
Welcome back to the Senior Housing Investors
Podcast.
I'm your host, John Hauber, andwe are ending in December of
2024 and thinking about testinga few new ideas, and one of
those is what we call a deepdive with some artificial
intelligence.
We upload some information toAI and it gives us some

(00:24):
commentary.
Hope you like this and enjoythis little snippet.

Artificial Intelligence Hos (00:29):
All right.
So you've got this stack ofinfo on senior housing
investment and you want the keytakeaways, right?

Artificial Intelligence S (00:34):
Right .

Artificial Intelligence H (00:35):
Let's dive in.

Artificial Intellige (00:36):
Absolutely .

I'm joined today by a senior
housing expert to help makesense of all this data.

Artificial Intelligence Se (00:42):
Yeah , happy to be here.

Artificial Intelligence Host (00:43):
So the senior housing market seems
to be at a turning point.

Yeah .

And all these sources suggest it's
ripe for investment.
But we're not just talking drynumbers here.
No, we're talking about ademographic shift.

Yeah .

Artificial Intelligence Ho (00:54):
With huge implications.

Yeah .

Like .
Imagine a wave of seniorslooking for specific types of
housing.

Yeah .

Are we ready for them?

Artificial Intelligence Sen (01:03):
Big question.

Yeah .
So one of the first things thatjumped out at me is this
prediction that the 80 pluspopulation, which is the prime
senior housing demographic, isprojected to surge over 20
percent in the next five years.

Artificial Intelligence (01:20):
That's a lot.

Yeah , but then they hit you with
this construction data.
It's like wait.
Are we even remotely ready forthis wave?

Yeah , it's a fascinating paradox.
We're on the verge of thismassive demand boom.
Right, yet new construction ispractically frozen in time.
Yeah, lowest point since 2009.
Really, in fact, only 900 newunits broke ground in Q2 2024.

Wow .

Artificial Intelligence Seni (01:45):
So that tells you something, right
there?

It definitely does.
So what's driving thispopulation surge?

Well , it's a bit of both.

Okay .

Artificial Intelligenc (01:52):
Advances in health care are certainly a
factor.
People are living longer,healthier lives.

Okay .

But there's also a demographic wave
we can't ignore, right, thebaby boomers are entering their
80s, okay, and this generationis larger than any before it.
They're also a generationthat's used to a certain level
of comfort and amenities.

Yeah.

Which translates to higher
expectations for senior living.

So how is the market responding to
this surge in demand?

Well for investors.
The current picture is prettycompelling.
The report mentions 12consecutive quarters of
occupancy growth.

Wow , that's impressive.
Occupancy rates are now hittinga record high, of 85.9%.
That's incredible, and it's notjust a blip no no.
This consistent upward trendsuggests a fundamental shift in
the market.
Absolutely, and let's notforget about rent.

Oh yeah.

The average asking rent just hit
$5,300.
Oh, the highest ever.

Yeah , that's got to make some
investors salivate.

For sure, for sure.
So this is where it getsinteresting for me.
Okay, senior housing isn't justone big category, right?
Yeah, you've got everythingfrom active adult communities
for the 55 plus crowd all theway to memory care facilities.
That's a whole spectrum ofoptions.

Yeah , and that's a crucial point for
investors to grasp.

Okay.

Artificial Intell (03:10):
Understanding the different types of senior
housing, their targetdemographics and their operating
models is critical.
Right, are you looking atindependent living for active
seniors who want a maintenancefree lifestyle?

Right.

Or are you considering assisted
living for those needing a bitmore support?

Okay .

Each model has its own risk profile
and return potential.

So they included this chart Senior
housing outperforming otherasset classes.
It basically shows seniorhousing crushing it.

Yeah .

Artificial Intelligenc (03:40):
Compared to other real estate sectors
over the past two decades.
Right, it's weatheredrecessions and market
fluctuations like a champ.

Yeah .
One key takeaway from that isthe resilience of this sector
During times of economicuncertainty.
People still need housing, yeah, and senior housing, especially
the needs-based segments likeassisted living and memory care
care, tends to hold up well.

Okay .
So now, before we get toocarried away with all the
sunshine and rainbows, there hasto be some downside Of course,
every investment has its risks.
So what are some of thepotential risks investors need
to be aware of?

Well , one potential challenge is
rising operating costs.
Labor shortages in thehealthcare sector are driving up
wages.

Yeah .

And the cost of providing quality
care is increasing.

Right .

Another factor is interest rate risk.
Ok, if interest rates rise, itcan impact the cost of financing
for new development andacquisitions, potentially
squeezing profit margins.

So it's not just about riding the
demographic wave.
Yeah, it's about understandingthe operational and financial
intricacies.

Artificial Intelligen (04:45):
Precisely , due diligence is critical in
this market, understanding localmarket dynamics.

Okay .

The competitive landscape, yeah,
and the quality of the operator.

Right .

Are all crucial factors to consider
.

You know one quote that really
stuck with me.

Okay .

Is from Eric Morton the.
Ceo of NICMAP, vision Right,who said, and I quote Okay.
The combination of suppressedsupply, growth, high absorption
rates and demographic tailwindsis creating unprecedented
opportunities.

Yeah , I think what Eric is
highlighting is the overallpositive outlook for the sector.
Ok, but Saudi investors knowthere's always another side to
the story.

Right .

It's not just about identifying
potential opportunity.
It's also about mitigatingpotential risks.
That's where thorough researchand a deep understanding of the
market become essential.
For example, one risk that'snot often discussed is the
potential for oversaturation incertain markets.
If everyone rushes in to buildsenior housing, it could lead to

(05:49):
an oversupply, driving downoccupancy and rents.

So the takeaway here is to do your
homework.

Absolutely .

This isn't just about jumping on the
bandwagon Right.
It's about strategic, informeddecision making.

Exactly , but I think it's also
important to remember that thisis more than just an investment
opportunity.
We're talking about providinghousing and care for a
generation that's contributed somuch to society.
There's a social impact elementhere that resonates deeply with
me.

That's a great point.
So what are your final thoughtsfor someone diving into this
world of senior housinginvestment?

Do your research, understand the
different types of seniorhousing, assess the market
carefully and remember the humanelement.
This is an opportunity topotentially generate strong
returns while also making apositive impact on the lives of
seniors.

This deep dive has been eye-opening.

Glad to hear it.

It's clear that the senior housing
market is complex.

It is.

Full of potential.

Yeah .

But not without its challenges.
For sure, it's not just aboutthe numbers, no, it's about
understanding a demographicshift and its implications for
society as a whole.

Absolutely .

So for all of you out there
thinking about where to put yourmoney in 2025 and beyond,
senior housing might just be theplace to be.

Could be.

But remember, do your homework.

Always .
Thanks for joining us on this deep
dive.

It was a pleasure.

And we'll see you next time.

See you later.

Where we'll be taking a deep dive
into another exciting investmentopportunity.

Sounds good.

Until then, happy investing.
Bye.

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The Demographic Shift Driving Senior Housing Needs - An Ai Deep Dive

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