2008-08-11, 14:19

Senior Housing

By: Multifamily Real Estate Industry Team
As baby boomers start to reach retirement age, it is becoming increasingly important to establish the proper housing to support this enormous generation. Indeed, the senior population is on track to double between 2010 and 2030, and by this latter date, about one in five Americans will be at least 65 years old. These demographic trends are anticipated to vastly affect the supply and the type of senior housing to be built in the next decades as older people choose to downsize by moving out of their houses and into more manageable living situations. Baby boomers will likely seek out rental based multifamily properties, whether they are geared toward independent living, assisted living, or common-age retirement communities. While they are choosing to leave home ownership, the baby boomers do not seem to be looking for institutional-style housing. The preferred multiunit homes will tend to have a residential feel and a homey touch. It is worth noting, also, that although these seniors are expected to move into rental spaces, they will not comply with the typical, often short-term, rental cycles of traditional multifamily units.

Baby boomers may be the most important source of demand for apartment developers and, more importantly, apartment owners in the coming decades. Thus, multifamily housing must be specialized for this group. The new generation of seniors seems to prefer high-end units with access to quality care and amenities. There is a market, also, for seniors who want to rent with the advantages and services that are associated with high-end condos. Moreover, longer life expectancies will create a demand for excellence in assisted living and elderly housing. These increasing needs make room for growth in this sector, and, combined with the lack of opportunity in other areas of real estate, give investors reason to start focusing on the baby boomer generation.

(This entry posted by Jessica Hamilton.)

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