As soon as some stability can be achieved battling the coronavirus, the senior care and housing industry will still be a good bet for investors, said the top economist for the National Investment Center for Seniors Housing and Care on Monday.
“The long-term investment thesis for seniors housing has not changed,” said Beth Burnham Mace during a Monday press briefing. NIC’s online annual meeting kicks off Tuesday.
She noted that a significant demographic upsurge is nearly at hand and that a majority of facility buildings are more than 20 years old. Even factors such as higher divorce rates are working in the industry’s favor. Another major positive includes senior housing and care’s rising recognition as a “solution” for population health management.
But significant near-term challenges remain and, of course, coping with COVID-19 is the biggest.
“We don’t know when we’ll have a vaccine, and how long it will take to distribute it,” Mace said. “Until we know that, that’s a major risk and uncertainty for our industry. The bottom line is, it’s all about a vaccine and its viability, acceptance and distribution.”
Other challenges include the impact of negative mainstream media coverage on consumer sentiment, and one of the most recent strong influencers: COVID-fatigue on staff and residents, as Mace puts it. In addition, operators are under a lot of stress to squeeze margins and there are restricted move-ins in many places.
U.S. out of proportion
Mace noted that the Johns Hopkins Coronavirus Resource Center had recorded 7.4 million cases of COVID-19 since it was first discovered in the U.S. January. Worldwide, the number is 35 million, with about 1 million confirmed deaths — 209,000 of them in the U.S. alone.
“Unfortunately, the number of confirmed cases everyday … we had hit a low point. [But] we’ve started to accelerate again to 45,000 to 50,000 cases a day on a seven-day moving average,” she noted. “That obviously is not particularly good news and it could be the beginning of indications of a second wave, potentially.”
The U.S. represents about 4% of the world population but 21% of the COVID-19 “cases or deaths,” Mace said, noting the suppressing effects on the sector. Early on, it caused a frenetic “sprint” mindset as everyone tried to get a grip on the implications and capabilities of the virus.
“Now, seven months into the pandemic, we have shifted into what I would call a marathon,” Mace noted. “But it’s a marathon without any particular finish line, and the finish line will be determined by when we get some kind of a vaccine.”
Based on current observations, stakeholders can expect a weak, K-shaped economic recovery, she added.
Buzz saw gone but buzz remains
NIC CEO Brian Jurutka agreed that the opening blitz of total COVID-19 uncertainty has given way to a more drawn out war against attrition.
“What started as an adrenaline-filled, 24/7 pitched battle at an unsustainable pace has now turned into a long, drawn out war, requiring rest and recuperation for those on the front lines, resupply of organizations and evaluations of partnerships and alliances,” Jurutka said.
He noted that leaders must plot for “a new normal” amid a “dizzying array of challenges.” They include, but are not limited to, “a patchwork of regulatory requirements, sweeping changes in public policy, an intense media spotlight, evolving consumer attitudes, changes in healthcare delivery, the implementation of new technology, mental and physical health of staff and residents, and uncertainty in capital markets.”
Jurutka said that registration for the online meeting was almost 1,100. That’s about one-third of recent in-person meeting attendance figures. Meeting sessions run Tuesday through Thursday in what is being called the “Education Week.” The “Networking Week” takes place Tuesday through Thursday of next week (Oct. 13-15).