At the end of 2016 we discussed some of the trends in senior housing we expect 2017 to bring, and today we are going to expand on those thoughts a little bit. It is no secret that the long-term care and senior housing industry is currently in a transition period, especially because of changing resident needs and desires. As we went over last week, senior housing developers and owners alike are realizing that renovations are the key to success. In order to compete with new facilities, older senior housing communities must act now and understand that renovations are a long-term investment and should integrate features and amenities that speak to the future.
Renovations – And So Much More
With this in mind, today we are going to look at what 2017 is the year for skilled nursing facilities (SNFs) to differentiate themselves from the rest. As you can see, last week’s blog about renovations and this week’s topic go hand-in-hand. In order for senior living providers to keep up with the increased competitiveness of the industry, they must do what they can to differentiate themselves. Most people make the decision to move into an assisted living community because they are in need of assistance of activities of daily living, which includes bathing, toileting, and eating. Providers should keep this mind moving forward and truly work towards creating an environment that will provide these duties, while also focusing on aesthetics and extra amenities. Technology is obviously a major factor that needs to be addressed as communities renovate and rebuild, as is the changing interests of residents.
The Competitive Advantage
The fact of the matter is that all senior housing providers want to build a facility that can stand on its own two feet and compete with the best of the best. Most residents choose one community to spend the rest of their time in, which means this is not a decision that is made lightly. In order to truly compete with brand new facilities and showcase yourself as a community that has it all, providers need to conduct market research, look at their competitors, and go into the market with a stronger message. We do not expect the competitive nature of the industry to slow in anyway throughout the next year, which is a big reminder for SNFs to step up their game.
With this, we also expect to see more mergers and acquisitions (M&A) in the senior housing industry in 2017. While transaction volume slowed in 2016, there is a lot of talk that deal-making and senior housing investments will make a comeback this year. Because interest rates are expected to rise, some believe this will encourage more M&A. Check back next week for a more in-depth look at M&A in senior housing and what this could mean for the coming year. As always, if you have any questions about today’s blog or would like to discuss investment opportunities in senior housing, please contact Shep Roylance of The JCH Senior Housing Group.