Market & Industry

There is an incredible market all over the nation for quality assisted living communities that specialize in the senior care and senior services fields. Through professional, consistent, and accountable service delivery, Avendelle creates an image and market reputation just with the way we do business. In addition, through a service platform that is completely different from anything on the market, the customer is able to experience the time of their life while receiving great customer service, which always translates to repeat business and a solid reputation for your customer base.

Due to the varying combinations of real estate and senior service programming, the senior housing market typically will provide extremely high cash on cash returns, depending on the occupancy rates of location and the appreciation of the real estate the facility is placed in.

The significant growth in the senior population has begun as the aging baby boomers are entering their retirement years. The demographic growth of seniors is forecasted to affect over 25% of the population in the United States during the next decade, evidencing strong support for the demand for senior housing.

The demand for senior housing is not only driven by demographics, but it is also (with the exception of active adult communities) need-influenced or need-driven, meaning not discretionary and required by the chronic care issues of aging. It is hard to make the same objective case for growing demand for office, retail, and industrial properties.

Demand for senior housing is also much less impacted by “technology risk.” This very real risk will impact retail, commercial, and industrial property types to a much greater extent over the foreseeable future, and cause the investment analysis to be much less certain with regard to understanding and measuring demand.

Like all property types, senior housing has its own business cycle. Demand for senior housing is much less affected by the rise and fall in employment and the expansion and contraction of GNP. Today’s seniors are better equipped financially to live out their senior years with the support of retirement plans, stock portfolios, insurance benefits, and 401K programs. Seniors that move to these properties are not employed.

While demand is moderately impacted by severe inflation and an inability to sell residential real estate, social security payments received by seniors and the need-driven element of the product are two substantial cushions to the traditional economic dislocations that affect yearly demand for other property types.

Even in markets that have reached temporary saturation for assisted living, many of the national operators have maintained 88% occupancy rates or better.