2017 LARGEST PROVIDERS Another newly tracked data point in the 2017 list is providers’
participation in Medicaid waiver programs, which can provide much-needed financial assistance for low-income seniors seeking assisted living or memory care. About 40 percent of the largest 115 providers currently participate in state Medicaid waiver pro- grams, with several states represented. Eligibility and coverage varies by state.
Solid Investment Returns Senior living isn’t just a health care and hospitality business; it’s also an attractive investment. Senior living real estate in- vestment trusts (REITs) report a combined investment value of $52 billion in more than 2,400 properties. While some pro- viders continue to both own and operate their properties, an increasing number have sold the real estate to investment trusts. Consider that Ventas reported $8.6 billion in senior housing investment value in 2015 compared with $16 billion today, and Senior Housing Properties Trust reported $3.3 billion in 2015 versus $4.5 billion today. Private equity firms have also plowed funds into properties with
the anticipation of solid returns. For example, Capitol Seniors Housing has $1 billion in equity in 24 senior living properties. Others, including Carlyle Group (HCR Manorcare), Blackstone (Senior Lifestyles), and TPG (Enlivant), for example, have equity in any number of properties in the largest providers list. It seems clear, as private equity funds and REIT investments con-
tinue to pour into the business, senior living properties will continue to change hands, fueling both acquisitions and new developments.
Shifting Needs Despite optimism about senior living overall, providers acknowl- edge that coming years will bring their own set of challenges. The percentage of the population that is aged 65 and over is expected to grow from 15 percent to 24 percent by 2060, according to the
of the Largest Providers participate in state Medicaid waiver programs
U.S. Census Bureau. Not only will this demographic shift impact the number of seniors needing care, but it points to a shrinking market for employees. Finding qualified staff will continue to be an issue as senior living providers represent a significant employer base, with some providers reporting nearly a one-to-one employee to resident ratio. “I am concerned; however, I’m confident we will stay ahead
of the recruiting and retention curve by empowering our team members and giving them the tools they need to be successful,” says Senior Lifestyle chief executive officer Jon DeLuca. “We, at Senior Lifestyle and as a broader industry, are building relation- ships across the country at schools and institutions to effectively educate students on the seniors housing industry and the exciting opportunities within the industry. We should always be recruiting, as we never know where we will meet great talent.” Changing resident needs will keep providers nimble as well. In
Hawaii, for example, resident preferences are quite specific. “Team members are encouraged to recognize these special customs and to offer special foods, cultural activities, and celebrate traditions that are all important in Hawaii,” notes Tricia Medeiros, chief operating officer for Sound Health Hawaii. “Activity programming includes events such as hosting a Bon dance, playing Hanafuda, and mah-
TOP 8 LARGEST REAL ESTATE INVESTMENT TRUSTS (BY SENIOR LIVING INVESTMENT VALUE) Rank Company 1
2 3 4 5 6 7 8
Welltower Ventas
HCP Inc.
Senior Housing Properties Trust New Senior Investment Group National Health Investors Sabra Health Care REIT LTC Properties Inc.
Trading Symbol
HCN VTR HCP SNH SNR NHI
SBRA LTC
Senior Living Investment Value
$16.7 billion $16.0 billion $7.4 billion $4.5 billion $3.1 billion $2.0 billion $1.2 billion $720 million
Total US Units
63,773 30,117
46,043 30,895 17,813 10,691 7,130
5,289
Total US Properties
643 687 362 265 148 133 76
Chief Executive Name/Title
Thomas J. DeRosa, CEO/Director Debra A. Cafaro, Chairman/CEO Tom Herzog, President/CEO David J. Hegarty, President/COO Susan Givens, CEO
Eric Mendelsohn, President/CEO Richard K. Matros, Chairman/CEO
105 Wendy Simpson, Chairman/CEO/President
12 SENIOR LIVING EXECUTIVE / ISSUE 5 2017
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