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  • Krone Weidler

Embracing Change: Senior Living Industry Outlook for 2024



As we step into 2024, the senior living industry is poised at the cusp of significant change, characterized by both challenges and opportunities. The past year has been a testament to the industry's resilience, marked by struggles and triumphs alike. As we look ahead, the industry is gearing up to embrace a new era, one that promises growth and innovation.


A Year of Contrasts: Challenges and Momentum

2023 was a tumultuous year for the senior living sector, with stories of operational distress contrasting sharply with more hopeful developments. Despite these challenges, the industry is entering 2024 with renewed vigor, buoyed by increasing occupancy rates and the potential to reach pre-pandemic census levels by year's end. The low rate of new construction starts, coupled with the impending demand from the baby boomer generation, sets the stage for continued occupancy gains into 2025 and beyond.


Persistent Pain Points: Staffing and Expenses

The coming year will likely see continued challenges in staffing and expenses, areas that have been pain points for the industry in recent years. Additionally, increased media scrutiny and public attention, owing to the industry's growing prominence in the U.S. real estate market, are anticipated to bring additional challenges.


Innovating for the Future

2024 is expected to be a year of evolution and innovation for senior living operators. The integration of new technologies, including artificial intelligence, promises to gradually transform the industry. This evolution will require operators to stay abreast of the latest trends and adapt to the changing landscape.


The 'Great Rebalancing': IL and AL

The industry is witnessing a 'great rebalancing,' with assisted living poised to overtake independent living as the more prevalent offering. This shift is driven by an influx of needs-based demand in the post-pandemic era. Assisted living, in particular, has seen a faster rate of census addition compared to independent living, indicating a trend towards higher-acuity resident needs.


The End of the Pandemic Recovery

As per NIC MAP Vision data, senior living operators in primary markets could return to pre-pandemic occupancy levels by late 2024. This milestone will mark the end of the pandemic recovery period, shifting the focus from regaining lost ground to exploring new growth opportunities. The immediate demand outlook for senior living has never looked more promising, especially with the baby boomers turning 80 in 2025.


Catering to the Boomers

The challenge for operators now lies in delivering a product that resonates with the baby boomer generation. This will require a shift from traditional paradigms to more dynamic and flexible offerings that cater to the diverse needs and preferences of this demographic.


The Concession Wars and Luxury Senior Living

Concessions and discounts are likely to play a crucial role in achieving occupancy targets in 2024. Meanwhile, the luxury senior living trend is expected to gain further sophistication, catering to a more affluent resident base with a focus on lifestyle and quality of service.


New Horizons: Retail and Healthcare Convergence

The line between retail, housing, and healthcare is predicted to blur further in 2024, with innovative concepts like Costco Senior Living emerging. These new models aim to integrate senior living with accessible and affordable retail and healthcare services.


The Race for Regional Density

Regional density is becoming a key focus for REITs and ownership groups, with operators striving to build stronger regional networks. This trend is likely to lead to more operator shifts and consolidation, reshaping the industry landscape.


Heightened Scrutiny and the AI Revolution

As the industry gains more public visibility, it will face increased scrutiny from the media, lawmakers, and the public. At the same time, the gradual unfolding of the AI revolution in senior living will continue, with operators exploring how AI can enhance care and operations.


Conclusion

The year 2024 represents a pivotal moment for the senior living industry. With the end of pandemic recovery in sight, the focus shifts to embracing the opportunities that lie ahead. The industry must navigate the challenges of increased scrutiny, operational metrics, and evolving consumer demands while capitalizing on technological advancements and demographic shifts. As we move forward, the industry's ability to adapt and innovate will be crucial in shaping its future trajectory.


Krone Weidler, Founder & Principal

Cadre Healthcare Realty Advisors

1095 SE 177th Place, Suite 404-M14

Summerfield, FL 34491

C: (813) 842-2365

O: (866) 355-3594

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