News & Press Releases
Release: “Seniors Housing Construction Trends Report” Shows Significant Decline
Press Room – 2010 NIC Press Releases
‘Seniors Housing Construction Trends Report 2010’
Shows Significant Decline in Construction Activity
FOR IMMEDIATE RELEASE: September 28, 2010
Contact: Renee Tilton, (410) 626-0805 or email@example.com
|Annapolis, Md. – The “Seniors Housing Construction Trends Report 2010” is now available. Produced jointly by the National Investment Center for the Seniors Housing & Care Industry (NIC) and the American Seniors Housing Association (ASHA), this annual report confirms that construction activity has slowed significantly for seniors housing and care over the past year in the nation’s top 100 metro markets. The slowdown is even greater when compared to two years ago.
This highly anticipated publication shows a comprehensive overview of current construction activity for seniors housing properties as of March 31, 2010. “We like to say it provides a macro-perspective of the units and properties in our sector under construction or which started construction within the top 100 metropolitan markets,” said David Schless, president of ASHA. “These markets account for nearly two-thirds of the U.S. population, including seniors who are 75 years or older.”
An overview of construction activity is provided for properties classified as senior apartments, majority independent living, majority assisted living and majority nursing care. Memory care is found under majority assisted living and a separate section on continuing care retirement communities (CCRCs) is included. Only properties containing 25 or more units/beds are tracked for purposes of the report.
Data is based on counts from NIC MAP, the leading data provider of key operating statistics for the seniors housing industry, and verified with data gathered from multiple sources, including McGraw-Hill Construction. In addition, all counts were confirmed by phone calls to the respective developer or operator and through analysis of newspaper articles around the country.
“Our findings mirror the general lack of available construction financing still prevalent in the marketplace,” said Robert Kramer, president of NIC. “Many regional banks, traditionally the source of construction financing for our sector, simply aren’t lending to the level that they were prior to the recession/credit crisis. Starts were down 32% from the prior year for all combined seniors housing and care properties, including senior apartments, and down 57% from two years ago. We also saw a drop-off in entrance-fee CCRC construction, which accounted for 13% of all units under construction, compared to 22% in 2009.”
“To the extent that financiers are lending on construction or willing to entertain construction, underwriting guidelines remain tight,” added Charles Harry, NIC research director. “Today, you need a lot of experience, a great location, a strong sponsor and more equity in the project than was required 2-3 years ago. In fact, given the increased equity requirements combined with the tighter underwriting, some projects simply are not feasible.”
The report is full of useful information for anyone looking for details on construction activity in the seniors housing and care market:
“One of the most popular features of the report is a section on rankings of metropolitan markets by percent growth in inventory over the previous five-year period,” pointed out Kramer. “For example, Chicago has seen a rise in assisted living construction of 36.3% in the last five years. That’s an astonishing figure. Looking at independent living inventory, Houston has seen 29.6% growth. Investors and developers can use these insights on construction trends when planning their development strategies.”
The “Seniors Housing Construction Trends Report 2010” is available for $150. For more information, visit www.NIC.org or www.seniorshousing.org. Or, call NIC at (410) 267-0504 or ASHA at (202) 237-0900.
Founded in 1991, the National Investment Center for the Seniors Housing & Care Industry (NIC) is a nonprofit education and research organization providing information about business strategy and capital formation for the senior living industry. NIC is the leading provider of historical and trend data on the industry through its NIC Market Area Profiles (NIC MAP®) Data and Analysis Service that tracks quarterly more than 12,000 properties in the 100 largest metropolitan markets. Proceeds from its annual conference are used to fund research on issues of importance to the industry. For more information, visit www.NIC.org or call (410) 267-0504.