There are three areas of possible low-hanging fruit to solve the middle income senior living challenge. Do you know what they are?

By Steve Moran

In Part 1 of my interview with Bob Kramer about the middle income senior living challenge, we talked about the scope of the problem and why it is so important for the industry to address. In this segment, Bob talks about some possible solutions.

In order to address the challenge of serving the middle income market, solutions need to be looked at in two areas:

  1. Real Estate

  1. Operations

Real Estate

There are three areas of possible low-hanging fruit to solve the middle income senior living challenge:

  1. Older Skilled Nursing Facilities — Most of the skilled nursing inventory is old. In addition, we are seeing a decline in skilled nursing occupancy. This means it is likely we will see a number of these properties close. They will have very little residual value but could with a relatively modest investment be repurposed as middle income assisted living.

  1. Older Assisted Living Communities — There was a huge assisted living growth spurt during the late 90s and early 2000s. They are trying to compete with much newer and often more attractive communities. Some portion of these communities won’t make it at the upper end of the market but could serve as middle income assisted living.

  1. Assisted Living Done Wrong — We are seeing some communities built by inexperienced operators and developers who just don’t understand the operational and design features necessary to serve the high end of the market. Some of these communities will fail and be “repossessed” by the lenders. They could be rebirthed as new, moderate income communities.


While the real estate problem is not trivial, figuring out how to control operating costs is an even bigger challenge. The cost of care is similar for middle income and high income senior living residents. The problem appears to be getting worse with higher acuities, labor shortages and higher wages.   

Technology offers a real potential to make operations more efficient. The big idea is that technology will allow caregivers more time providing care and less time doing non-care tasks.   

You can watch Part 2 of the interview here:

If you are looking for capital for your next senior living community or are wanting to hear what industry leaders are thinking and saying about the industry, the 2017 NIC Spring Investment Forum is the perfect place for you to be. I will be there and would love to grab a cup of coffee and the first cup is on me.