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2015 Seniors Housing and Care Survey

In December of 2015, Lancaster Pollard sent an online survey to approximately 4,000 leaders at seniors housing and care facilities throughout the U.S. Over the course of two weeks, 295 respondents completed the online survey. The survey has a 95% confidence level and a confidence interval of 5.68, meaning that the differences in responses of 6 percentage points or more are statistically significant.

Out of the 295 respondents, 59% were for-profit providers and 70% identified themselves as either CEOs, CFOs or owners. The majority operated facilities with 250 beds/units or fewer and all aspects of the continuum of care were represented.

Overall, our survey findings depict an environment similar to 2014 as new construction and renovation projects are increasingly being pursued, particularly in regards to assisted living (AL) and Alzheimer’s/memory care (MC). Some of the more notable findings are discussed below.

Expectations for 2016

Which elements of the continuum of care do you think will experience the most growth in the next 12 months?

Sixty-one percent of respondents believe that the Alzheimer’s/MC market will experience the most growth in the coming year. Statistically, this is no different than the response in 2014. Respondents see Hospice, CCRCs and SNFs growing the least of all other types of care.

What types of debt financing are you considering for construction/acquisition projects in the next 12 months?

Our results are evenly spread amongst debt financings. Interestingly, 27% of respondents indicated that they are not considering debt financing, a 58% decrease compared to the survey conducted in 2014.

 

What sources of equity are you considering for construction/acquisition projects in the next 12 months?

Internal equity and private domestic sources were the sources of equity selected most by respondents for use with construction and/or acquisition projects. This remains consistent with our results from 2014. In addition, 33% of respondents communicated that they are not considering sources of equity in the next 12 months. For-profits were responsible for 56% of the response levels for private domestic investors and REITS, while nonprofits were responsible for 13% of the response levels for these two answers. In 2014, for-profit providers were also responsible for a majority of the response levels for private domestic investors and REITs.

For which elements of the continuum of care do you have construction projects planned in the next 12 months?

Respondents cited assisted living (AL) and Alzheimer’s/MC most often as the type of construction projects they have planned, which is consistent with the results from our 2014 survey.

 

What are the annual estimated capital expenditures per bed required to maintain your organization’s competitive market position?

Thirty-five percent of respondents estimate that it costs $551 and higher to maintain their organization’s competitive market position. In addition, 26% of respondents estimate it costs $351 - $450 to maintain their organizations competitive market position. We did not ask this question in our 2014 survey.

 

Is your organization participating in an ACO?

The majority (75%) of respondents’ organizations are not participating in an ACO. Twenty-five percent of respondents responded that they have participated in an ACO. For those organizations participating in an ACO for less than a year, there is a directionally higher percentage of nonprofits participating vs. for-profit providers. Statistically, this is no different than the response in 2014.

 

Respondent’s Likelihood for 2016 Projects

Likelihood you will pursue a construction project in the next 12 months.

There is a high probability that the majority of respondents will pursue a construction project in 2016, as 51% are extremely likely and 19% are somewhat likely, a total of 70%. When we asked this question in 2014, 80% of respondents stated they were likely to pursue a construction project in the coming year. Hence, this year’s results represent a 13% decrease from last year.

 

Likelihood you will pursue an acquisition project in the next 12 months.

A majority (53%) of respondents stated that it is extremely likely or somewhat likely that they will pursue an acquisiton project. Statistically, this is no different than the response in 2014.  

 

Likelihood you will attempt to sell a facility in the next 12 months.

A majority (65%) of respondents stated that it is extremely likely or somewhat likely that they will attempt to sell a facility in the next 12 months. A directionally higher percentage of for-profit respondents indicated that they were likely to sell a facility in 2016. We did not ask this question in our 2014 survey.

The full report can be downloaded here.

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