At RE Journals’ Senior Housing Conference expert developers, architects and investors discussed how to anticipate the “silver tsunami,” how to accommodate more active seniors and how they’re positioning for the coming years.
The first panel on Tuesday at the University Club of Chicago focused on the state of the market, and was moderated by James Keledjian, principal at Pathway to Living. Across the board, panelists agreed that workforce would be one of the major issues—not only on the construction side but also on the operating side.
“Manpower is a huge concern nationally. Where are people going to find staff to care for loved ones? There is a very large shortage of healthcare workers and many are questioning where that staff is going to come from,” said panelist Rick Banas, vice president of development and positioning at Gardant Management Solutions.
Other leaders on the panel included Chris Palkowitsch, architect and associate partner at BKV Group; Mat Dougherty, executive vice president and regional manager at McShane Construction Company; and Matt Krummick, director of real estate development at Pathway to Living. The group discussed what senior housing could look like in the future touching on the baby boomer generation.
The evolution of senior housing will involve a lot more amenities. Seniors today are a lot more active at 80 years old than 10 years ago and the developments should reflect that change, said Krummick.
The panel also agreed that some of the biggest obstacles for growth were issues with reimbursement rates from the state, land prices and high operating costs. Working with the state to match changes in the market and the implementation of technology to streamline productivity in operations could alleviate these issues, but it will take time to shift.
The second panel examined investment strategies and how they see the future of the sector shaping up. Suzanne Koenig, president of SAK Management Services, led the discussion and she started the panel by asking if any of them would lend into Illinois. Most answers were cautiously optimistic, acknowledging that lending is a tough business and the state’s budget and financial issues weren’t making it easier.
A huge challenge with senior housing is the heaviness of operations, said David Watkins, a partner at SHA Capital Partners.
“Senior housing tends to be a business that is very attractive from the outside, but when someone gets in there, they often get way ahead of themselves. They think they can do it and then they get a call in the middle of the night about a care giver that didn’t show up, then what happens?” he said.
Jeff Gardner, US director of commercial banking at BMO Harris Bank, cautioned the audience to only work with those who knows what they’re doing.
“If you’re going to invest in senior housing, make sure you do it with someone who has a clear strategy and clear advantage they can bring to the table. It’s important to see the value your creating and what advantage your creating,” he said.
Although there is a lot of excitement around wave of baby boomers, he added, that doesn’t mean investors should go full speed ahead.
“Be honest and do what the data shows you. Don’t be afraid to walk away from an investment if that’s what the numbers tell you,” Gardner said.
Other expert panelists included Paul Froning, principal of Focus Healthcare Partners; Gary Rose, partner-in-charge, tax services at Marcum LLP; and Carlissa Dunteman, vice president of Somercor 504.
