Despite the fact that the birth rate in the United States has fallen to its lowest level in more than a century, there are still many seniors in need of high-quality housing that meets their unique requirements. Just behind the millennial generation in terms of size, the baby boomer generation is the second-largest. Our civilization is aging as a whole, necessitating more senior housing in the years to come. Over the decade beginning in 2020, the number of persons who will be 75 years old will increase astonishingly by 48.1%, more than double the growth rate from the previous ten years (Source: U.S. Census Bureau projections). The best moment to invest in the asset class of senior housing may be right now.
Every single day, around 10,000 baby boomers reach the traditional retirement age of 65 (Source: Sen. Rob Portman (R-Ohio), in The Wall Street Journal, July 22, 2014). The next golden years are short-lived. Senior living is a given for many as they approach or attain octogenarian status, despite the fact that some baby boomers are choosing to stay in the comfort of their homes due to the rising cost of home care.
The unpleasant loss of autonomy that comes with aging is also a possible investment opportunity for astute investors. But no two senior housing complexes are alike in terms of their size, style, or value proposition. This unique company's degree of attention and concern is what makes it special. Operators who have the right policies, procedures, and systems in place draw customers as well as devoted personnel. The finest senior living facilities have strong personnel retention rates, which draw more residents and boost revenue.
The average number of units in senior home complexes exceeded 100 as of the beginning of 2021. (106 to be exact). A $34,725,000 average development cost translates to a $269,400 average cost per unit. (Source: CBRE's December 2018 U.S. Seniors Housing Development Costs Report) If you do the math, you'll find that the average cost per square foot in this industry is an amazing $317. As more baby boomers move into senior homes, this number will probably rise much further.
Although it makes sense that the typical investor would be focused on finding the next hot growth stock, senior housing actually has the potential to outperform other asset classes in both the short and long term. According to the research, senior housing has done pretty well as an asset class even throughout economic downturns. As they get older, people frequently look for a social setting with readily available care.
Since more people are living longer than ever, they will stay in senior home for longer than in the past, driving up costs for every level of care. The several degrees of senior living are as follows:
Age 55+
Senior living
dementia care
competent nursing
The words "Senior living" or "senior housing" frequently conjure images of expert nursing in the minds of many people. However, it's critical to thoroughly comprehend the differences because each level of care demands unique operational capabilities and shouldn't be grouped together when determining the return on an investment in senior housing.
In terms of care quality and investment appeal, senior home facilities within a single market may range greatly from one another. In other words, each form of senior living facility has unique characteristics and subtleties that should be thoroughly considered and grasped.
Although occupancy rates for senior living vary across the sector, rents are comparatively stable and could rise as the housing crisis plays out in the coming years. In contrast to other types of real estate, senior housing assets have historically offered consistent rates of return.
There will likely be more than a 22% increase in the number of Americans over 75 between now and 2025, according to projections. By 2025, more than a million people will have reached that age. As the decade ahead takes shape, it is evident that senior housing will not only be in demand but also perhaps be quite challenging to find (Source: U.S. Census Bureau projections).
The time is now to think about making an investment in this expanding asset class. Get in touch with Perch Wealth right away and invest under the direction of a senior housing industry expert who has in-depth knowledge of this sector, including the advantages and disadvantages of particular operators, to acquire a complete grasp of the potential risks and benefits. Seize the chance to diversify your investment portfolio and benefit from the growing senior housing market.
Dale Watchowski, Is Now a Good Time to Invest in Senior Living? (February 9, 2021),
Ecofin, Senior Living - Investing in a growing population (April 9, 2021),
Not an offer to buy, nor a solicitation to sell securities. Information herein is provided for information purposes only and should not be relied upon to make an investment decision. All investing involves risk of loss of some, or all principal invested. Past performance is not indicative of future results. Speak to your finance and/or tax professional prior to investing.
Securities offered through Emerson Equity LLC Member: FINRA/SIPC. Only available in states where Emerson Equity LLC is registered. Emerson Equity LLC is not affiliated with any other entities identified in this communication.
Perch Financial LLC and Emerson Equity LLC do not provide legal or tax advice. Securities offered through Emerson Equity LLC Member FINRA/SIPC and MSRB registered. Emerson Equity LLC is unaffiliated with any entity herein. 1031 Risk Disclosure:
No offer to buy or sell securities is being made. Such offers may only be made to qualified accredited investors via private placement memorandum. Risks detailed in a private placement memorandum should be carefully reviewed, understood, and considered before making such an investment. Prospective strategies and products used in any tax advantaged investment planning should be reviewed independently with your tax and legal advisors. Changes to the tax code and other regulatory revisions could have a negative impact upon strategies developed and recommendations made. Past performance and/or forward-looking statements are never an assurance of future results.
Many of the investments offered will be only available to those investors meeting the definition of an Accredited Investor under SEC Rule 501(A) and offered as Regulation D private placement securities via a Private Placement Memorandum (“PPM”). Prospective investors must receive, read, and understand all the risks associated with buying private placement securities. Investments are not guaranteed or FDIC insured and risks may include but are not limited to illiquidity, no guarantee of income or guarantee that all tax advantages or objectives will be met and complete loss of principal investment could occur.
Risk Disclosure: Alternative investment products, including real estate investments, notes & debentures, hedge funds and private equity, involve a high degree of risk, often engage in leveraging and other speculative investment practices that may increase the risk of investment loss, can be highly illiquid, are not required to provide periodic pricing or valuation information to investors, may involve complex tax structures and delays in distributing important tax information, are not subject to the same regulatory requirements as mutual funds, often charge high fees which may offset any trading profits, and in many cases the underlying investments are not transparent and are known only to the investment manager. Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop. There may be restrictions on transferring interests in any alternative investment. Alternative investment products often execute a substantial portion of their trades on non-U.S. exchanges. Investing in foreign markets may entail risks that differ from those associated with investments in U.S. markets. Additionally, alternative investments often entail commodity trading, which involves substantial risk of loss.
NO OFFER OR SOLICITATION: The contents of this website: (i) do not constitute an offer of securities or a solicitation of an offer to buy of securities, and (ii) may not be relied upon in making an investment decision related to any investment offering by Perch Financial LLC, Emerson Equity LLC, or any affiliate, or partner thereof. Perch Financial LLC does not warrant the accuracy or completeness of the information contained herein.
