What happens when healthier Boomers and ambitious builders mix? A supply glut.

Occupancy rates for senior housing has sat around 88% over the last two quarters

TRD NATIONAL /
Oct.October 31, 2018 08:30 AM

Seniors aren’t moving into specialty housing as quickly as predicted. (Credit: iStock)

Aging baby boomers aren’t flocking to senior living facilities in the way builders expected. And it’s creating oversupply issues.

Occupancy rates for senior housing were at 87.9 percent in the second and third quarters, the lowest since 2011 when it dropped to 87.5 percent, according to the Wall Street Journal.

Builders may have been overzealous in recent years. They picked up the pace since 2012, building 84,727 units since then, nearly 25,000 more than were built in the six years prior.

Boomers likely won’t move into this housing until they reach around 80 years old, which isn’t until 2026, according to recent data. They are healthier than previous generations and have chosen to stay closer to their families rather than move to all-senior facilities. Developers may have also overestimated how many can afford to live in such facilities, which can cost between $3,000 to $8,000 per month.

“What’s happened to the industry is that everyone sees the demand, and they can’t quite figure out exactly when to time it,” said Lucinda Baier, chief executive officer at Brookdale Senior Living, according to the Journal.

Still, there’s plenty who are bullish on the market. Related Companies announced this month it is partnering with manager Atria Senior Living to build $3 billion worth of high-end urban rentals aimed at seniors over the next five years. [Wall Street Journal]Dennis Lynch


Related Articles

arrow_forward_ios
South Carolina town puts moratorium on development (Credit: iStock)

The high cost of low taxes: South Carolina town bans all development for 16 months

U.S. Rep. Alexandria Ocasio-Cortez and Sunnyside Yards (inset) (Credit: Getty Images and Wikipedia)

AOC resigns from Queens megadevelopment steering committee

Donald Trump with Rep. Emanuel Cleaver II, Rep. Ron Kind and Sen. Cory Booker (Credit: Getty Images, iStock)

Trump’s Opportunity Zone program is under investigation

The agreement was signed today at UBC’s New York Council offices in Manhattan by Nathan Blecharczyk, Airbnb co-founder, Chief Strategy Officer, and Frank Spencer, General Vice President of UBC.

Airbnb hammers out partnership with carpenters’ union

Fotis Dulos (AP Images/ Erik Trautmann)

Connecticut developer Fotis Dulos charged with murder

Pier 40 and Gov. Andrew Cuomo (Credit: Wikipedia and Getty Images)

Cuomo kills Pier 40 redevelopment plan

CW Realty’s Cheskie Weisz  and a rendering of 251 Front Street (Credit: CW Realty and Think Architecture and Design via New York YIMBY)

CW Realty plans luxury rental at controversial Vinegar Hill site

A rendering of Broadway Triangle and an aerial of Broadway Triangle (Credit: Magnusson Architecture via Department of City Planning and Google Maps)

Rabsky, Spencer land $70M refi for Broadway Triangle site

arrow_forward_ios
Loading...