The demand for senior housing is growing rapidly, increasing by approximately 3% annually. This increase is due to increased demand for older people in society and in the healthcare system.
In addition to increased demand, aging population has created a demand for affordable and high quality senior housing. Currently, there are two main sources for development of affordable senior housing: private property and public funding.
Private property owners can turn to the IRS-approved profit-sharing plan or non-profit corporation for funding. The former requires that the property be sold and that the funds be used as intended, whereas the latter does not.
This article will talk about some potential opportunities for commercial real estate developers and investors. However, before we go any further, let’s look at some of the challenges that may face off an individual trying to decide if this is the right fit for them.
Seniors are seeking out “age-friendly” environments
A growing number of senior housing developments are designed for people who live with or are familiar with someone else in a neighborhood or community. This is known as “age-friendly” housing.
These neighborhoods often have other people your age who have same concerns as you about health and safety, and they would like to rent or sell their home together.
These kinds of communities are becoming more popular due to the benefits on health and fitness that come from living in close proximity to others your age with similar interests.
These kinds of environments can be fun and inspiring, so why not consider forming a collective? You could create a comfortable haven where you can focus on your projects without having to worry about change or distraction.arantine_text_endoftext=””>
Though these kind of communities can be appealing, they also require large amounts of space, which is not always available.
Opportunities include purchasing and developing senior housing
Recent developments include the opening of The Residence in Kirkland, a luxury senior housing community designed for single adults with financial needs.
Kirkland is an attractive, walkable neighborhood with ample parking. It also has small businesses and shopping nearby. These attributes make Kirkland an attractive location for seniors looking for independence.
At The Residence, residents have access to a full-time staff member who coordinates activities and serves as a connection to the community. They also have access to a fitness center and nearby restaurants and shops.
Many older people don’t go out enough, but they should be comfortable walking or taking public transportation to events because of their conditioning and ability to do so. Senior housing should be safe and convenient, both at the property and in the community as a whole.
Challenges include potential resident conflicts
When a facility is designated as senior housing, it can face challenges when it comes to constructing new units and preparing them for occupancy. These include determining if each unit needs updating or replacement, preparing the spaces for resident changes, and creating systems to support successful transitions.
Some of these challenges include determining whether a building can be modified to become conversion into a unit of sale or use, or whether it is the best use for housing.
In addition to these considerations, knowing what upgrades are necessary when remodeling a space can be stressful. Modifications cost money and may require re-evaluating who should live in the space and what services they need to maintain functionability.
Resident conflicts are another challenge that occurs when building senior housing units. When there is not enough space or quality of life (FOL) appropriate units are required, residents from different communities must be paired up, causing tensions between them.
Senior housing presents both opportunities and challenges for commercial real estate investors.
The demand for senior housing continues to grow as the population grows. People in their 40s and 50s are moving into the older population distribution system.
This growth in supply has led to increased prices and opportunities for investors. Properties that are close to a grocery store or library can be valuable.
Some of the benefits include: good visibility, potential bonus income streams, and an opportunity to create a business component onsite. A business can help bridge the gap between money needs and living conditions.
Property owners can also charge extra for essential services such as food services or transportation. This can create some very high bills that individuals with limited funds can’t afford.