What are Investment Experts Saying About Your Rates, Workforce, and Revenue Streams?
Assisted living pricing, workforce shortages, and revenue streams were among the hot topics at the fall conference of the National Investment Center for Seniors Housing & Care (NIC). NIC provides data and analytics for investors and providers in the senior housing and care sector. Its fall conference brings together seniors housing operators, owners, and capital providers to discuss industry trends and opportunities. Discount Pricing Abounds in Assisted Living During the second quarter of 2016, the average assisted living property gave hefty discounts to new residents, according to the Seniors Housing Actual Rates Report from the NIC MAP Data Service, the market research arm of NIC. Chuck Harry, NIC’s chief of research and analytics, described the report during a press briefing held at NIC’s fall conference. Report findings published by Senior Housing News show that assisted living and independent living properties don’t always get their asking rate from either new or established residents. Specifically: Average initial rates and average in-place rates were below the average asking rates for both assisted living and independent living between April 2015 and June 2016. The monthly difference between asking and actual rates was greater for assisted living properties. For example, the average assisted living initial rate – $4,797 as of June 2016 – was 7.8% below the average asking rate of $5,204. Resident turnover is significantly higher for assisted living properties than for independent living properties, which had a steadier-than-average occupancy rate. Creative Approaches to Solving Workforce Shortages A national unemployment rate of 4.9% has created a tight labor market that will make it harder for senior housing providers to fill their staff positions, according to Beth Mace, NIC’s chief economist and director of capital markets research. Labor shortages will be felt at the executive director level, among frontline workers, and among construction workers, reported Senior Housing News on Sept. 25. Shortages among construction workers are already preventing some projects from meeting their construction deadlines, said Mace. Mace’s session at the NIC conference highlighted some practical steps that providers are taking to meet workforce challenges, according to a Sept. 18 Senior Housing News article. Those steps include: Hiring full-time, in-house recruiters who use digital tools to maintain a labor pipeline for both executives and frontline workers. Developing partnerships with local vocational agencies or educational institutions to identify and train prospective nursing assistants and guide them through the certification process. Creating a culture that nurtures and supports an organization’s workers. Participating in jobs fairs to raise the visibility of careers in the senior living sector. Producing and screening high-quality videos to market communities to prospective employees, particularly high school and university students. Catering as a Pathway to Revenue and Referrals Food was the topic of discussion during one NIC conference session led by Daniel S. Ogus, executive vice president and chief operating officer of Cornerstone Affiliates, a family of companies that includes LeadingAge Members be.group and ABHOW. The main takeaway: Providers looking for more revenue and resident referrals should consider opening a catering business. According to McKnight's Senior Living, Ogus urged senior living providers to consider using their well-equipped kitchens to serve the public by supplying monthly luncheons for a local Kiwanis Club, providing meals to a local Meals on Wheels program, or catering wedding receptions and retirement parties. A catering business can be a good source of revenue for an organization, said Ogus. In addition, satisfied catering customers might be more likely to consider using an organization’s services when they or an older family member need them. There’s one important caveat, however. Don’t take on catering unless you’re sure you can do it well, warned Ogus. “Catering is a double-edged sword,” he said. “If you do it well, you have a great reputation. If you don't do it well, it can really sink your reputation.”
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