Investors taking a long-term view of the senior housing sector should see their investments pay off in the years ahead, despite indications that the industry will be among those hardest hit by the ongoing coronavirus pandemic. The outlook, shared by Green Street Advisors Senior Analyst Lucas Hartwich Wednesday, came after he discussed just how much skilled nursing and senior living have been disproportionately affected by COVID-19.
“Retail and healthcare in all its forms have suffered the most,” Hartwich said. “We expect seniors housing to be the eye of the storm.”
Senior living occupancy has been under pressure on both the move-out and move-in numbers, given various shelter-in-place restrictions. The sector also is dealing with high labor costs due to extra hours and overtime for caregivers, as well as operating expense increases for personal protective equipment.
But compared with other hard-hit sectors such as retail, the sector shows major promise for a strong rebound as the population continues to age and more care services are needed, Hartwich noted.
“Looking out to 2023 and beyond, that’s really when the demographic tailwinds will kick into gear and you’ll start to see the first wave of baby boomers hit that mid-80s age cohort,” he said.
