There are a lot of other things we believe or at least speculate about but just don’t have the hard data to prove.
Back in March I saw a press release announcing that the National Investment Center For The Seniors Housing and Care Industry (NIC) had appointed Beth Mace as their first-ever economist and, perhaps more significantly, as the seniors housing industry’s first-ever and only chief economist. It seemed pretty cool to have a position that is a one and only. I called Beth to ask why NIC and the Seniors Housing Industry needed an economist. Here is what she had to say.
What We Know
NIC currently has the “go to” data for developers looking to build new senior living communities or operators and capital providers to reposition, acquire or expand existing communities. The NIC data includes many years’ worth of historical information on the senior living industry specifically and the economy in general. Just a sampling of what they can tell you:
- Occupancy rates and trends nationally and by major markets
- Data on new construction starts
- Data on fill-up rates
- Rent and service fee data
- Total market area potential based on census data
- Data on capital costs and availability
- Transaction volumes and investment sales pricing
The NIC data is hugely helpful to the point of being a “have to have” in order to make wise investment decisions and access capital markets. There are a lot of other things we believe or at least speculate about but just don’t have the hard data to prove. Some of the speculation may very well prove to be right but some may not. Some examples of what we don’t really know:
- What is the impact of a shift in single family home prices and sales on the senior living industry? We all generally believe that an increase is good and a decrease is bad, but if we are honest, we don’t have hard data to prove this is true or to assess the size of the impact.
- How much impact does the rate of unemployment have on occupancy rate and absorption?
- How does what happens with Medicare Reimbursement impact private pay senior living or does it at all?
- Which types of senior living are most impacted by economic factors?
Finding The Answers
As an economist, what Beth brings to the table is the expertise to examine all the statistical data that NIC, the Federal government and other data sources have compiled and apply complex models and statistical techniques that will examine these relationships. This will allow developers and industry leaders to better forecast future demand and make smarter decisions about where to develop, what to develop, and how to position various types of senior living communities. I asked Beth when we would begin to see the results of these explorations. She cautioned that it would also be a work in progress, but that it will take 12 months or so before she and NIC will be in a position to begin releasing some of their findings. In this two and a half minute video clip Beth talks about the current 2014 fundamentals of the seniors living market and some of the things she is working on.
What are some of the things you think NIC ought to be looking at? Steve Moran
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