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The Industry 3 rd Qtr 2011 Margaret Wylde ProMatura Group, LLC [email protected]

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The Industry 3rd Qtr 2011

Margaret Wylde

ProMatura Group, LLC

[email protected]

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2006 2007 2008 2009 2010 2011* Source: National Association of Realtors

Existing Homes Sold

Northeast

Midwest

South

West

Note: * indicates seasonally adjusted annual rate for August.

Housing Market

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

2006 2007 2008 2009 2010 2011*

Source: National Association of Realtors

Average Sale Price of Existing Homes Sold

Northeast

Midwest

South

West

Note: * indicates average sale price for August 2011.

Housing Market

22,655 23,685

13,660

9,642

14,942

0

5,000

10,000

15,000

20,000

25,000

2q06-1q07 2q07-1q08 2q08-1q09 2q09-1q10 2q10-1q11

Source: Senior Housing Construction Trends Report 2011

Senior Housing Units Started

Construction

28.20%

27.60%

13.80%

10.70%

10.30%

8.30%

6.00%

4.00%

3.20%

1.10%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Dallas, TX

Boston, MA

Philadelphia, PA

Washington, D.C.

Chicago, IL

New York, NY

St. Louis, MO

Detroit, MI

Los Angeles, CA

Miami, FL

Source: Seniors Housing Construction Trends Report 2011

Majority IL Inventory Growth (4/1/2006 through 3/31/2011)

43.10%

36.90%

18.80%

11.20%

9.40%

2.40%

1.40%

-1.20%

-2.80%

-3.10%

-10% 0% 10% 20% 30% 40% 50%

Chicago, IL

St. Louis, MO

Dallas, TX

Boston, MA

Washington, D.C.

Los Angeles, Ca

New York, NY

Philadelphia, PA

Miami, FL

Detroit, MI

Source: Seniors Housing Construction Trends Report 2011

Majority AL Inventory Growth (4/1/2006 through 3/31/2011)

12.10%

0.30%

-0.70%

-1.20%

-1.90%

-2.30%

-3.20%

-3.20%

-4.10%

-6%

-10% 0% 10% 20% 30% 40% 50%

Dallas, TX

St. Louis, MO

Miami, FL

Philadelphia, PA

New York, NY

Los Angeles, Ca

Boston, MA

Washington, D.C.

Chicago, IL

Detroit, MI

Source: Seniors Housing Construction Trends Report 2011

Majority NC Inventory Growth (4/1/2006 through 3/31/2011)

46

20

10

6

3

2

-4

-6

-9

-10

-20 -10 0 10 20 30 40 50

Dallas, TX

Chicago, IL

St. Louis, MO

Washington, D.C.

Boston, MA

Philadelphia, PA

Los Angeles, CA

Detroit, MI

Miami, FL

New York, NY

Source: Seniors Housing Construction Trends Report 2011

Change in Property Count (4/1/2006 through 3/31/2011)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2006* 2007* 2008 2009 2010 2011

Note: * indicates Top 75 Metropolitan Areas

Senior Housing Units Under Construction for Top 100 Metro Areas

Senior Apartments

Independent Living

Assisted Living

Nursing Care

Memory Care

Source: Seniors Housing Construction Trend Report- 2006-2011

49%

16%

15%

20%

Distribution of Units Under Construction 2011

Senior Apartments 49%

Majority AL 16%

Majority NC 15%

Majority IL 20%

Source: Seniors Housing Construction Trends Report 2011

56%

8%

36%

Distribution of Senior Apartments Under Construction 2011

Affordable* 56%

Market Rate 8%

HUD 202 36%

Note: * indicates some form of tax credit or other affordable program

Source: Seniors Housing Construction Trends Report 2011

Sales Counselors Impact Success

14

Attributes with Strongest Correlations with the Performance Values

Performance Value = Rate x Occupancy

Variable Pearson Significance

Level1

Sales Counselor Focused on Solving Issues 0.626 0.0042

Median home value 0.533 0.0001

Increase in median income of 65+ households 0.479 0.0004

Increase in median income of 45-64 households 0.451 0.0010

Gestalt Score of community 0.449 0.0012

Increase in median income of 75+ households 0.436 0.0015

Architectural Style of Building 0.426 0.0020

Notes: Demographic/Economic data within in 5-mile Radius

87

.8%

92

.9%

96

.5%

89

.4%

94

.4%

97

.5%

86

.9%

92

.6%

96

.4%

86

.7%

91

.9%

95

.8%

83

.9%

89

.7%

94

.4%

82

.9%

90

.2%

94

.9%

75%

80%

85%

90%

95%

100%

Lower Quartile Median Upper Quartile

Source: The State of Senior Housing

All Communities Occupancy

2006

2007

2008

2009

2010

2011

Occupancy

88

.8%

93

.8%

97

.0%

90

.2%

95

.0%

98

.7%

86

.9%

93

.1%

96

.9%

86

.2%

91

.5%

95

.5%

81

.9%

87

.9%

93

.0%

77

.1%

84

.6%

91

.6%

75%

80%

85%

90%

95%

100%

Lower Quartile Median Upper Quartile

Source: The State of Senior Housing

Independent Living Occupancy

2006

2007

2008

2009

2010

2011

85

.7%

90

.7%

96

.1%

88

.1%

93

.3%

96

.5%

85

.1%

90

.6%

94

.7%

90

.1%

94

.1%

97

.5%

86

.0%

90

.6%

96

.2%

84

.9%

91

.9%

96

.2%

75%

80%

85%

90%

95%

100%

Lower Quartile Median Upper Quartile

Source: The State of Senior Housing

Assisted Living Occupancy

2006

2007

2008

2009

2010

2011

88

.1%

94

.4%

97

.5%

86

.8%

92

.0%

96

.1%

86

.8%

91

.3%

96

.0%

84

.2%

90

.8%

95

.0%

83

.5%

91

.6%

96

.4%

75%

80%

85%

90%

95%

100%

Lower Quartile Median Upper Quartile

Source: The State of Senior Housing

Memory Care Occupancy

2006*

2007

2008

2009

2010

2011

Note: No Memory Care data for 2006

90

.4%

94

.0%

95

.8%

89

.5%

90

.7%

94

.3%

90

.20

%

93

.60

% 96

.10

%

87

.80

%

91

.50

% 94

.20

%

85

.60

%

89

.90

%

94

.10

%

83

%

88

%

92

.40

%

75%

80%

85%

90%

95%

100%

Lower Quartile Median Upper Quartile

Source: The State of Senior Housing

CCRC Occupancy

2006

2007

2008

2009

2010

2011

Source: NIC MAP 3Q2011

Source: NIC MAP 3Q2011

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2008 2009 2010 2011

Seniors Housing Year-over-year Rent Growth Distribution; MAP31

Negative Unchanged (0%) Stable (1 - 3%) Rising (> 3%)

Properties Beginning to Rise Rents Again

22

Source: NIC MAP® Data & Analysis Service

© National Investment Center for the Seniors Housing & Care Industry | www.NICMAP.org

-1

0

1

2

3

2007 2008 2009 2010 2011 2012

Seniors Housing Annual Supply-Demand(%); MAP31

Forecast

Demand Likely to Continue Outpacing Supply

23 © National Investment Center for the Seniors Housing & Care Industry | www.NICMAP.org

Source: NIC MAP® Data & Analysis Service

Annual Inventory Growth

Annual Absorption

85

86

87

88

89

90

91

92

2008 2009 2010 2011

Seniors Housing Occupancy (%)

MAP32-100 Continues to Lead Recovery

24 © National Investment Center for the Seniors Housing & Care Industry | www.NICMAP.org

Source: NIC MAP® Data & Analysis Service

MAP31

MAP32-100

0

1

2

3

4

2009 2010 2011

Seniors Housing Year-over-year Rent Growth (%)

MAP32-100 Maintaining Higher Rent Growth

25 © National Investment Center for the Seniors Housing & Care Industry | www.NICMAP.org

Source: NIC MAP® Data & Analysis Service

MAP31

MAP32-100

85

86

87

88

89

90

91

92

93

-2,000

-1,000

0

1,000

2,000

3,000

4,000

5,000

2006 2007 2008 2009 2010 2011 2012

Seniors Housing Supply-Demand Forecast*; MAP31

Occupancy (R)

Acceleration in the Recovery in Sight?

© National Investment Center for the Seniors Housing & Care Industry | www.NICMAP.org 26

Source: NIC MAP® Data & Analysis Service

Inventory Growth (L)

Absorption (L)

Forecast

*Source: NIC Research Internal Forecast Model

Sales Counselors Impact Success

29

Attributes with Strongest Correlations with the Performance Values

Performance Value = Rate x Occupancy

Variable Pearson Significance

Level1

Sales Counselor Focused on Solving Issues 0.626 0.0042

Median home value 0.533 0.0001

Increase in median income of 65+ households 0.479 0.0004

Increase in median income of 45-64 households 0.451 0.0010

Gestalt Score of community 0.449 0.0012

Increase in median income of 75+ households 0.436 0.0015

Architectural Style of Building 0.426 0.0020

Notes: Demographic/Economic data within in 5-mile Radius