Senior Living 3.0: Demographic Destiny
Until now, virtually all Senior Living demand has been driven by the Silent Generation. Now the Baby Boomers (born 1946-1964), about 73 million of them, are entering their senior years, creating a substantial surge in the need for senior housing.
Currently more than 11,400 Americans celebrate their 80th birthday every day. ALL Boomers will be over 65 by 2030. The number of them over 80 is already increasing exponentially. Meanwhile, Covid and macro-economic factors have made developing new projects extremely difficult. This double-whammy left our industry in something of a Winter, waiting for the inevitable thaw. But Spring is upon us, with occupancy rates rapidly rebounding, and the macro-economics pointing to lower interest rates in the future.
The race to build for the Boomers has already started. Architects are a leading indicator of sentiment and our office has seen a marked uptick in new projects. One Senior Living client remarked to me that it's about to be the 'cocaine 80s' again. I have no direct knowledge of what that means but I think I get the drift. We're entering another boom like we experienced from 2010 to 2020. As powerful as that building boom was, the one brewing now will dwarf it. We need a significant expansion of senior housing options across all levels of care to accommodate the coming hordes of Boomers. Every level of care and every building type is under-built. This will be true for at least the next 15 years.
The sheer magnitude of the demographic wave ensures long-term and robust demand for senior living. I predict that shelter for Seniors will be one of the hottest sectors in Commercial Real-Estate. Developers and Operators who start now will be opening their doors in about 2 years which will be the perfect time.
As I put this chart together I expected to see the elder population fall off a cliff as Gen X entered the picture. However, something counter-intuitive happens... the numbers continue to grow! I have often wondered what will happen to these buildings 15 or 20 years from now. This research suggests they will still be full. If, of course, they are built for the future instead of the past.
That's why we are designing Senior Living 3.0. It is not just a new style or amenity package. It is a design philosophy about helping people flourish. It means creating communities that promote wellness and inspire vibrant lifestyles. Creating places that feel modern, connected, healthy, and alive. Boomers don't want replicas of their suburban McMansion. They are aspirational. They want an upgrade. And that's what we have on the boards right now. We're defining the next generation of Senior Living 3.0 by creating aspirational living where our elders will flourish.
