It has been an eventful year and, in many ways, difficult housing industry for the elderly, and not over yet. However, as the calendars shift to December, it’s time for an inventory. With that in mind, Senior Housing News has have compiled some of the liveliest and most powerful quotes. These quotes, each one of the last 11 months, give some of the biggest trends, the toughest challenges, and the most attractive opportunities that have defined 2019 for the lives of older people.
According to CEO of Eclipse Senior Living, Kai Hsaio, The trends from 2018 onwards will continue through 2019 and 2020: operating performance is hampered by pressure in the upper tier due to stagnant occupancy, caused by a new, albeit modest, supply and pressure in the bottom row of a competitive workgroup and static. Besides, the assets continue to be transferred due to various operators who have poor performance or capital structures that are broken due to the inability to reinvest in their operating platform.
The predictions that were made by Hsiao were on point. The operational challenges that have been done throughout the whole year and even though construction starts were down, this scenario allows the supply gut hangover is extended and much more painful that was originally expected. Ventas, which happens to be a part-owner of the senior living community, Eclipse, has recently revised the forecast it had for senior housing and it was shown to be worse than expected in the third quarter, as there were unseen market conditions that happened to lead to pressures in pricing for some of the REIT operators.
Sales competitor Welltower has recently improved its portfolio of retirement homes but has been more aggressive in restructuring its relationships with operators. In some cases, operators like Silverado resisted REIT’s decision to move their portfolios to a new administration. In other cases, the operators remained in the Welltower portfolio, but have switched the threefold network structures to RIDEA. For Hsiao’s position on broken capital structures, this is what Welltower CEO Tom DeRosa said about Brandywine’s move to RIDEA: Brandywine is just another example of repairing a broken capital structure that results. A period in which REITs assessed how strong their asset portfolio could grow.
According to the CEO and founder of Juniper Communities, Lynne Katzmann, she stated that her view on senior housing is just a part of the solution for health care reform and that senior housing deserves to have just as much attention as other parts of health care do. The only way to be able to make this happen is to do it as a collective option.
Eventually, it was announced that officially, the Perennial Consortium was now official. This is a group of three senior living providers, which as Ohio Living, Juniper Communities, and the Christian Living Communities, which teamed up to promote their Medicare advantage plan to the healthcare market.
Medicare Advantage has continued to be a large player for this particular storyline for this year. The insurers had first proposed the plans to the market to have newer benefits that have been aimed at certain daily living activities. Medicare Advantage groups like Sunrise Senior Living and Erickson Living, along with The Perennial Consortium, have finally opened up about any potential rewards and risks that come with being a provider as well as a payer. Up until most recently, there were only 10 senior living organizations within the Twin Cities, which had announced that they were going to be proposing special needs plans to the market for the 2020 year.
Another theme of 2019 that was captured was Katzmann’s reference, especially for those who are mid-sized or small providers, Medicare Advantage will always be a team sport. However, even outside of the Medicare Advantage, there will always be a growing sense that many providers will be able to benefit much more by working together a lot more. Co-opetition is recently a buzzword, which is a concept that has started to grow, with one of these is an example that comes from the market in Lancaster, Pennsylvania. Ken Jaeger, CEO of MorningStar, stated that people should be looking out for this topic when he interviews on an upcoming episode of his podcast called Transform.
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