By Dees Stribling for Bisnow
The outlook for senior housing is strong in greater Phoenix, according to the speakers at Bisnow’s State of Phoenix Healthcare & Senior Living Development event recently. But developing the kinds of space residents (and their adult children) want, in the places they want to be, is going to be challenging.
The future of healthcare, considering the political and economic uncertainty surrounding the industry, is going to be even more challenging. A transformation is happening: Healthcare in the future will be less about shiny new facilities and more about the community.
In the senior living sector, demographic trends are spurring growth in Phoenix. Brydant Inc. President and CEO Scott Backes said the market is No. 3 nationwide for units under construction: about 2,600.
Phoenix is No. 6 for senior housing stabilized occupancy, and No. 2 for senior population growth.
“Senior housing is an asset class that’s becoming more lucrative, and investors see Phoenix as a top growth market,” Backes said. “Continuing care retirement communities here are especially popular.”
“Residents want multipurpose rooms, lifelong learning opportunities, leisure bars and more,” Beatitudes Campus President and CEO Michelle Just said. “You’d be surprised how popular leisure bars are.”
Snell & Wilmer Partner Nick Wood said there is good news and bad news when it comes to senior housing in Phoenix. Demand will increase — that is the good news, he said.
“The bad news is where do you build the projects? People want to stay in their communities, but projects in established neighborhoods pose all sorts of challenges: density, building heights, noisy delivery trucks.”
The Future of Healthcare?
The future of healthcare is a little less clear than senior housing, the healthcare panelists said. The demand is going to be there, but the industry is undergoing a radical transformation to meet that demand in a cost-effective way.
The movement of healthcare into the community is a major trend underway in Phoenix, but it has only just begun, Healthcare Trust of America Executive Vice President-Asset Management Amanda Houghton said.
“Cap rate spread is narrowing between on-campus and community assets. Community assets now form a viable asset class, and will be an important part of our healthcare delivery strategy going (forward),” Houghton said.
Banner Health Vice President, Development and Construction Kip Edwards said the healthcare system has to be transformed from a “sick-care” system to a true healthcare system.
“We need to be incented to keep people healthy,” he said. “That’s the path that healthcare has to take.”
Read more at Bisnow.