Excerpt from the book
Investing in Senior Housing chapter 1, part two.
• In a 2017 study, Commonwealth Fund’s 20th International Health Policy survey10 compared the health experiences of aging adults, including those with high medical needs, in 11 countries (including Canada, Germany, Sweden, and the United Kingdom). The United States ranked either at or near the bottom in multiple categories, including affordability, access, care coordination, and timeliness of care.
• In the same report, researchers showed that overall, 1 in 8 respondents had three or more chronic conditions. In the U.S., that number was 1 in 3.11
• On average, Americans spend $8,233 per year12 on healthcare—some two-and-a-half times more than most other developed nations.
• That’s a lot of “not so happy” news for today’s aging Americans—but we’re believers
that with every challenge . . . there is also an opportunity. In fact, many sharp investors
are beginning to recognize the tremendous opportunity that is the “business of aging.”
The Business of Aging
Capitalism is one of the hallmarks of American culture. And that’s a good thing, especially when we realize the Business of Aging may be what shifts our
country’s focus back where it needs to be—on our aging community. When it comes to the Business of Aging, there are, in our view, two main shifts to consider. The
first? It’s simply about recognizing the sheer financial power of this growing segment of the population. A growing number of Boomers means retailers will need to focus on different styles of clothes . . . different types of packaging . . . different types of distribution . . . and different types of store layouts directed at Boomer
buyers. Indeed, we as a society may not be used to
• U.S. consumers 55+ spend twice as much13 as Millennials do
• Half of the U.S. population is over age 50—and they account for about half of all consumer14 spending
• Baby Boomers like to buy—they spend the most15 in all product segments
• Baby Boomers want a variety of options to choose from
• Baby Boomers control some 70 percent of disposable income16 in America
• Boomers also account for 80 percent17 of all cash currently in savings and loan
By the end of this decade, the spending power of consumers aged 60 and older will hit $15 trillion globally18, up from $8 trillion in 2010. Long story short, seniors
have money, and smart investors will need to cater to what seniors want in terms of lifestyle and comfort if they want to cash in. That means developing things
like aging-focused apps, mobile healthcare, connected devices developed for the Internet of Things (IoT)—and quality senior housing options—that promise to make
the lives of seniors easier, safer, and healthier all around. catering to “older Americans,” but research shows:
The second shift, quite honestly, is more of a movement. Known by many as Aging 2.0, it’s about recognizing the way that we as a society have traditionally perceived the “senior market” (separate, institutional, fragile) and moving toward a more inclusive
idea of aging that focuses on senior wellness, lifestyle, technology, community, and partnership. For instance, in healthcare, we don’t just need more caregivers
to support our aging. We need more passionate geriatric and end-of-life care specialists (in a time when the number of geriatric caregivers is actually declining).
In government, we need greater representation from aging Americans who can use their voices in support of healthcare, affordable housing, and inclusion. In the workforce, we need more companies willing to step up to support aging workers, and to take a stand against age discrimination.
And why does Aging 2.0 matter when it comes to senior housing specifically? Senior housing is a unique segment of commercial and residential real estate that doesn’t just provide a service—it changes lives. And for our investments in aging to be successful,
it’s imperative that they change those lives for the better. That means investing in senior housing projects that support diversity, affordability, comfort, mental health care, and overall social well-being. And as we’ll see later in this book, those types of communities, in today’s marketplace, are hard to come by. The good news is . . . there are solutions on the horizon ready to be developed and brought to market by visionary entrepreneurs and investors.