Senior Housing Supply's Outpacing Demand
The senior housing building spree has quickly outstripped the demand from Baby Boomers, and this could lead to higher vacancy and lower rent in the years to come, especially as interest rates rise. Many companies that specialize in senior housing—including Health Care REIT, HCP and Brookdale Senior Living—are already feeling the pressure as they’ve seen huge falls in share price, yet construction still refuses to slow. While these companies provide high-quality food and staff and focus on markets with limited construction (such as Dallas, Atlanta, San Antonio, Phoenix and Chicago), analysts say Baby Boomers are hard to predict when it comes to housing, especially with their longer life spans and disdain for senior housing, the Wall Street Journal reports. Even if this behavior changes, it may be a while before Boomers consider moving into these communities, since most are only now turning 65. [WSJ]
