Minimal SNF construction forecasted through 2016, report says
Fewer new skilled nursing developments will crop up over the coming year, and those that do will focus on short-stay, post-acute rehabilitation services, according to a new report from real estate consulting firm Integra Realty Resources.
Skilled nursing supply as a whole is decreasing, and will likely continue to drop as older facilities close their doors, IRR's seniors housing report predicts. There were 7,051 skilled nursing beds under construction across the country as of the third quarter of 2015, the report found, compared to around 3,600 in the same quarter of 2014.
While development in 2016 is expected to be “minimal,” new facilities that are constructed will likely focus on short-term, Medicare-funded rehabilitation care, IRR said. New facilities will also stand apart from their predecessors by emphasizing luxury amenities like private rooms, state-of-the-art therapy areas, bistros and swimming pools.
Upcoming challenges include revenue declines caused by Medicare Advantage's increasing popularity, as well as ever-shortening lengths of stay, the report found.
The IRR report also notes the increase in price-per-bed for the skilled nursing industry, currently at an average of $72,000 per bed, compared to $53,745 in 2010. Some facilities may even sell for between $100,000 and $200,000 per bed, prices the report says would have been “unrealistic even a few years ago.”
A survey of seniors' housing market participants conducted by IRR earlier this year found that respondents were most optimistic about the nursing home market, rather than independent or assisted living, with 39% of those believing the nursing home market has yet to peak.
Read coverage of the assisted living and memory care portions of the IRR report here, at McKnight's Senior Living.