Survey reveals top concerns and opportunities for senior living
More than three-quarters of this year’s survey respondents identified staffing as a major obstacle their organization faces over the next 12 months. Yet, despite labor shortages and rising costs, a positive outlook prevails.
The COVID-19 pandemic had a severe impact on seniors housing communities and care facilities in the U.S. Now, with the virus largely under control, the industry is grappling with a prolonged staffing crisis. Yet despite their concerns about labor shortages, inflation and other challenges, owners and operators of seniors housing facilities are optimistic about future growth, according to a KeyBank survey released in advance of the 2022 National Investment Center for Seniors Housing & Care (NIC) Fall Conference.
- Staffing presents an even greater challenge this year than in 2021
- Owners and operators are generally optimistic about the year ahead
- Most anticipate increases in deal volume over the next 12 months
Staffing, expenses and inflation are top concerns
More than three-quarters of this year’s survey respondents selected staffing as a major obstacle their organization faces over the next 12 months. In 2021, fewer than half the respondents cited labor shortages as a primary concern, suggesting that the problem is worsening even as the COVID-19 pandemic subsides. In a separate survey by the American Health Care Association, only 2% of respondents reported that their nursing homes are fully staffed, and almost all those surveyed (98%) are having trouble hiring staff.1
Aside from staffing shortages, owners and operators of seniors housing also expressed financial concerns. An equal number of respondents (41%) cited rising interest rates, controlling expenses and inflation as challenges. Just under one-third identified government policy changes or regulatory uncertainty as potential obstacles post-pandemic.
Despite these hurdles, half the survey respondents in KeyBank’s poll characterized their feelings about the industry over the next 12 months as somewhat optimistic. About 14% said they felt very optimistic—more than twice as many as in 2021.
More deals, new development on the horizon
When it comes to deal volume, most seniors housing owners and operators are anticipating growth. More than a third (36%) expect to see deal volume increase by 11-20% in the next 12 months, and just over a quarter (27%) expect an increase of 5-10%. However, while none of the respondents who took the survey in 2021 expected deal volume to decrease, this year about 14% said they are anticipating a 5-10% decrease in deal volume over the next 12 months.
Given that most owners and operators are planning to do more deals over the next year, it makes sense that 59% of those surveyed named property acquisition as their greatest opportunity for business growth, followed by new development (32%, up significantly from 19% in 2021) and expansion or renovation (23%). As demographic trends continue to drive demand for seniors housing and care facilities, opportunities to develop new facilities and enhance existing ones will continue to grow.
KeyBank experts can help your business navigate challenges and achieve your goals
Seniors housing and healthcare is a dynamic sector emerging from a period of sustained hardship from the pandemic. As industry leaders tackle the challenges of labor shortages and rising costs, most of those surveyed by KeyBank maintain a positive outlook in 2022 thanks to a promising pipeline of new deals and growth opportunities.
As one of the nation’s leading lenders in the seniors housing sector, KeyBank offers an integrated approach backed by a national platform, whether you’re seeking acquisitions or redeveloping your portfolio.
To learn more and to discuss these survey results, contact Kevin Murray and Matt Ruark, or reach out to your mortgage banker.
State of the Nursing Home Industry: Survey of 759 nursing home providers show industry still facing major staffing and economic crisis,” June 2022.
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