Will Labor Effect Seniors Housing? My guess is the answer is yes. Labor shortages is a real challenge for Seniors Housing operators. I’m hearing more and more that agency and temp workers, which is costly, is becoming standard in most buildings.  I can’t get through a discussion about buying or selling without labor being brought up.  Job gain has been strong across the country.  Unemployment is hovering around 4.9%.  It is getting increasingly difficult for Seniors Housing Owners to find and attract quality employees.  It isn’t just the care givers.  It is difficult to find and retain quality executive directors and department heads.  While the front line workers are the key to success, it starts with quality leadership.

Ways operators are overcoming the labor challenges

Owners are targeting more experienced workers.  Many of them could retire, being vested or having retirement savings secure.  However, they love what they do and have more experience than anyone.  Owners are finding ways to bring those individuals in a leadership or ownership sharing capacity.

Many are offering retention bonuses for front line, entry level positions.  The longer employees stay with less turnover, the more owners are saving money.

Bottom line not hurting yet

Thankfully, wages have not increased with reduced unemployment. This is more true for front line, entry level positions.  This is primarily due to older. more experienced workers retiring and being replaced by younger, cheaper labor.

What does this mean for you?

There is no doubt that labor is going to be a challenge for many years to come.  If you have thought about selling nursing home or selling assisted living now is the time.  Take advantage of the great market with low interest rates and capital available.  Everyone is waiting for the shoe to drop on the market.  Act now before that shoe drops.

Contact Ryan M. Saul, Managing Director at Senior Living Investment Brokerage, Inc. for a confidential proposal or to discuss the market in general.

 

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REIT buyers are quiet.

With the low cost of capital and Wall Street behind REIT growth in Seniors Housing, REITs have been buying nursing home and assisted living portfolios at a rapid pace for the last three years. However, all is currently quiet on the REIT front.

Why has there been a slow down with REITs buying?

A few reasons.  1) There is a lack of quality Seniors Housing portfolios on the market.  Those companies with high quality portfolios that thought about selling have already done so over the last few years. 2) The REITs are in the process of digesting all of the properties that they have purchased.  Like any good investor, they want to be sure their operator has success with what they currently operate.  This preserves value and makes sure their assets are headed in the right direction. 3) REITs are trying to figure out what they are going to do with some of their older, aging real estate.  They are focusing on selling older, smaller, non-core assets.

Please contact Ryan Saul if you have thought about selling.  Now is a great time to sell while interest rates are still at historic lows.  Also contact me if you are in the market to buy nursing home or buy assisted living.  Our inventory is constantly changing.

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