Archive for November, 2011

90 is the new 80

Tuesday, November 29th, 2011

In case you haven’t been keeping up, 90 is the new 80 or more precisely, 90 is the new 85. A recent report from the US Census Bureau (I know what you are thinking—why doesn’t she ever reference Canadian data in her posts? Because there isn’t any is the short answer to that question.) points out that among the seniors population as a whole, the 90+ group has been growing the most rapidly. When all of the baby boomers reach the age of 85 (in 2050), 2% of the US population will be 90+ which is pretty amazing if you stop to think about it. That is a lot of 90 year olds.

What are today’s 90 year olds like?

• Women outnumber men 3 to 1

• 6% of the women are married; 43% of the men (which is one of the big reasons that the vast majority of the residents of seniors housing communities are women—not only do they live longer, they are much more likely to be alone.)

• The likelihood of living in a nursing home rises from 20% between 90 and 94 to 31% between 95 and 99 to 38% for those over 100. These ratios are probably lower than what many people would expect. I usually quote a ratio of 35% of the population over the age of 85 living in nursing homes in Canada but either my estimate is wrong or there is a much higher incidence of institutionalization in Canada. We will try and check this out.

• Not surprisingly, people living in nursing homes have more disabilities than people living in the community although overall, the differences aren’t huge—98% of nursing home residents have disabilities (I don’t know why it isn’t 100%) compared to 81% of people living in the community. But there are major differences in a couple of categories—trouble remembering (73% versus 30%) and needing help with activities of daily living such as bathing and dressing (85% versus 35%).

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US Market Improving (slowly)

Friday, November 18th, 2011

I know I do go on about the US market, but I find it endlessly fascinating. Of course that’s partly because there is so much data on the US market. We have so little data in Canada that it is usually quite difficult to figure out what’s going on.

The chart below, courtesy of NIC, shows a steady improvement in occupancy levels in independent living (IL) and assisted living (AL) communities in the US since the seniors markets bottomed out in the first quarter of 2010. It’s interesting though, or maybe depressing is the better word, to think about how long and how deep the slide has been, really since the latter part of 2006. Not only that, over the same period of time the 75+ population in the US increased by over 800,000 people. To put that number in perspective, in Canada there are a total of just over two million people over the age of 75.

US Occupancy Rates

So while things are getting better, they are still a long way from good, thanks largely to the still extremely sluggish US housing market.

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Transforming Institutional Long Term Care

Tuesday, November 8th, 2011

To most people in the field “institutional long term care” is a redundancy. If it’s long term care, it’s institutional.

But a movement in the US, called the Green House Project, is aiming to change all that. And it’s not green as in sustainability, it’s green as in grass, plants, gardens, the outdoors.

Here is a brief description from the web site:

‘The Green House residence is designed to be a home for six to ten elders. It blends architecturally with neighboring homes, includes vibrant outdoor space, and utilizes aesthetically appealing interior features. Each elder has a private room or unit with a private bathroom. Elders’ rooms receive high levels of sunlight and are situated around the hearth, an open kitchen and dining area. While adhering to all codes required by regulations, Green House homes look and feel like a home, and contain few medical signposts.’

To anyone familiar with modern care facilities in Canada and their associated regulatory frameworks, such a model seems impossible. But lots of research shows that not only is the Green House Project possible, it delivers better outcomes than traditional skilled nursing facilities and it doesn’t require any more staff resources. Many green home communities are now operating throughout the US although I have never heard of one in Canada, not surprisingly. It took us 10 years to catch up to the US in the assisted living sector.

We have lots of questions about this model as you probably do too. My first question is: how frail is too frail, physically and mentally, for a Green House client? We’ll find out and let you know in future posts.

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Construction activity down but prices at high end up

Friday, November 4th, 2011

The National Real Estate Investor just reported that 14,942 units of private pay service-enriched and skilled nursing facility beds are under construction in the US. That’s up modestly year-over-year although well below pre-recession levels. But it’s way below the peak of 1998, when an astonishing 57,800 similar units were under construction. Of course a lot of those projects eventually went broke thanks to over-supply in many markets. I wonder what the Canadian situation is? Sadly, no one has any idea.

But prices for high end US projects have been climbing steadily since the recession. Reports from NIC and Real Capital Analytics indicate that in the first quarter of 2008, the top 25 percent of project prices was about $169,000 per unit. That number fell to about $101,000 a unit by the fourth quarter of 2009. Prices for the properties in the top quartile have increased since then to $170,141 per unit. That’s a big jump.

One of the transactions highlighted in the report is in Raleigh North Carolina. Prudential Real Estate Investors sold the project in 2004 for $29 million and just bought it back for $53 million from the same company they sold it to. Some improvements were made in the meantime (eg 14 cottages added) but it sounds on the surface like a very good deal for the interim owner.

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