Despite significant rises in costs and low occupancy rates caused by the COVID-19 pandemic, the seniors housing industry is in line for a healthy recovery, a real estate expert said Wednesday.
“Obviously, the whole pandemic period has been a tough operating environment for people to move in with all the operational complexities of operating during a pandemic,” Mike Acton, managing director at AEW Capital Management, said Wednesday. His comments came during an online leadership “huddle” hosted by the National Investment Center for Seniors Housing & Care.
The NIC session centered around real estate, the types of properties that will fare best in the future and how seniors housing compares to commercial properties.
“I think the property sector is poised for a good recovery. It’s already happening on the occupancy side,” said Mary Ludgin, senior managing director and head of global investment research at Heitman. “It’s going to take a little bit longer to happen on the preparing margin.”
NIC data released earlier this month showed skilled nursing occupancy recently reached its highest mark since April 2020. Occupancy increased 94 basis points (0.94%) from January to February, ending the month at 76.7%.
Acton said that because seniors housing properties have higher operating and labor costs, “it’s going to take awhile to prepare the margins but I think we’re on the way.”
“Knock on wood, we don’t have another big setback in terms of public health or something else but it should be a pretty good near-term recovery story,” Acton said.
NIC defines seniors housing as independent living and assisted living.
