Why should you invest in senior living ?
Key facts on the Silver Tsunami :
By Vinney ( Smile ) Chopra and Jon Roosen
● This year , approximately 23 million Americans are over 75 years old , while 8.9 million are over 83 . As a general rule , most Americans transition to senior housing by the time they reach 83 years old .
● The OLDEST baby boomers will not turn 83 until the year 2029 , thus allowing the
Image by tookapic from Pixabay floodgates to open for the silver tsunami . The senior housing industry is only beginning and is expected to skyrocket over the coming years .
● Predictions suggest that 2 million Americans will reside in senior housing by the year 2030 , which is two times the number of Americans in senior housing in the year 2016 .
● Today , 15.6 % of the American population is 65 years or older . By 2050 , estimates predict over one fifth of the population will be 65 years or older .
Senior living investors should understand that the senior industries profit from a huge demographic groundswell . The Baby Boomer generation will hit the 75 + age mark by the year 2021 , as they begin their retirement years . As this happens , Baby Boomers will seek housing in an industry that is undersupplied and heavily outofstep with shifting market demands and caregiving structures . For example , according to CBRE , 40,325 units must be constructed each year in order to satisfy peak demand in the years 2020 2025 . When compared to the actual pace of construction in 2014 of 16,440 units per year , construction rates fall short by far . A clear trend has formed showing that despite the overwhelming growth in senior population , growth in senior housing has remained far below the threshold to keep pace .
As such , we conclude that one of the most riskadjusted prospects in both commercial real estate and general domestic investment is the acquisition , renovation , and growth of senior living facilities . When comparing senior housing to more traditional types of real estate such as multifamily , senior housing is much more operationally complex and demanding from a regulatory perspective . Because of this , efficient execution of a senior housing deal requires an experienced and committed investment team .
Over the past 55 years , global life
" With the increased demand for housing created by aging demographics , the U . S . senior housing industry is prepped for a future of unprecedented growth ."
expectancies have risen from 49 to 72 years of age . The world population of those age 65 and older will double todays numbers and reach 1.3 billion by 2040 .
Aging demographics have created five unique investment opportunities for Americans , one of which is senior housing . With the increased demand for housing created by aging demographics , the U . S . senior housing industry is prepped for a future of unprecedented growth .
According to Senior Housing Analytics figures cited by PGIM , the demand for new senior housing in the United States is expected to rise by around 850,000 units between 2010 and 2030 . PGIM ’ s study “ A Silver Lining : The Investment Implications of an Aging World ” notes that lucrative investment prospects exist for independent living , Residential Care Facilities for the Elderly ( RCFE ), assisted living , and memory care classes .
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