Seniors Housing Starts Plunge: NIC
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Annapolis, Md.--For the year-long period ending March 31, 2010, seniors housing starts, including senior apartments, were down 32 percent nationwide from the same period a year earlier.
Dees Stribling, Contributing Editor
Annapolis, Md.–For the year-long period ending March 31, 2010, seniors housing starts, including senior apartments, were down 32 percent nationwide from the same period a year earlier, and 57 percent compared with two years earlier, according to the “Seniors Housing Construction Trends Report 2010” released this week. The report, a publication of the National Investment Center for the Seniors Housing & Care Industry (NIC) and the American Seniors Housing Association, also noted a drop-off in entrance-fee continuing care retirement communities (CCRC) construction, which accounted for 13 percent of all units under construction, compared to 22 percent in the period ending March 31, 2009.
The report tracks construction in within the top 100 metropolitan U.S. markets. According to NIC, those markets account for nearly two-thirds of the national population, including seniors who are 75 years or older.
In the report, 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 classified under assisted living and a separate section on CCRCs is included. Only properties containing 25 or more units or beds are tracked for purposes of the report.
Data is based on counts from NIC MAP, the a data provider of 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, in a statement. “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 and credit crisis.”
Charles Harry, NIC research director, adds: “To the extent that financiers are lending on construction or willing to entertain construction, underwriting guidelines remain tight. Today, you need a lot of experience, a great location, a strong sponsor and more equity in the project than was required two or three years ago.”
The report also tracks seniors housing growth over a longer period than a year, and in individual markets, with some surprising results. For example, metro Chicago has seen a rise in assisted living construction of 36.3 percent in the last five years, while greater Houston has seen 29.6 percent growth in independent living inventory over that period.