Healthcare N Illinois

Marcus & Millichap's Jandris: The changing world of long-term care and seniors housing

Joshua Jandris, senior associate in the Chicago office of Marcus & Millichap Real Estate Services, specializes in seniors housing and long-term healthcare real estate. He’s seen big changes hit the industry as seniors seek more specialized care as they age.

[caption id="attachment_20973" align="alignleft" width="150" caption="Joshua Jandris"] Joshua Jandris, senior associate in the Chicago office of Marcus & Millichap Real Estate Services, specializes in seniors housing and long-term healthcare real estate. He’s seen big changes hit the industry as seniors seek more specialized care as they age.

Midwest Real Estate News: We’ve seen in traditional healthcare that the ways in which patients are seeking care have inspired hospitals and other medical providers to invest more in free-standing clinics and ambulatory care centers. Have you seen anything similar when it comes to seniors housing? Joshua Jandris: I was just in a meeting last week with someone who is new to this industry. He was surprised by all the fragmentation in this industry, all the diversification of services. It used to be that we only had nursing homes. That was the only option. But that changed when seniors wanted different types of care. Assisted-living options then became more prevalent. Then there came a need for dementia and Alzheimer’s care. So you then saw free-standing memory care facilities begin to show up.

MWREN: Different levels of care have necessitated different types of seniors housing facilities? Jandris: Yes. You have people who don’t need 24-hours around-the-clock care. You have the Baby Boomers who are having hip replacements or knee replacements. Or maybe they’ve had a heart attack. They need therapy and treatment. Because of this, there are providers building post-acute rehab facilities. We are seeing in the long-term care side of the healthcare field more of these ambulatory-care facilities.

MWREN: This seems to be a pretty strong trend right now. Jandris: This might not be the best analogy, but look at cars. When they first came out, they were simplistic. They were designed to get you from Point A to Point B. Then needs changed and cars did, too. They added new features as the demands of the consumers changed. It’s similar with healthcare delivery and long-term care delivery. It is all market-driven. This is 100 percent a long-term trend. There is such a need for beds in this segment of the healthcare industry it is incredible.

MWREN: How long have you seen this trend? Jandris: It’s been a relatively measured transition. Unlike in other asset classes, seniors housing has never experienced huge gluts of surplus units or properties.

MWREN: How has the economic downturn impacted seniors housing? Jandris: Independent living, which is more of a lifestyle choice, has been impacted the most. Most seniors have to sell their homes before they move into an independent-living facility. During the economic downturn, they couldn’t sell their homes. That’s one of the reasons why independent living was one of the hardest-hit segments of seniors housing.

MWREN: How about some of the other segments? Jandris: Assisted-living, memory care, skilled-nursing, those are all needs-driven. You move into these facilities because you need to. Looked at skilled-nursing facilities. You go into such a facility when you need 24-hour around-the-clock care. Home healthcare is not a substitute for that. Because the need for such facilities is so strong, these other segments weren’t hurt as much by the economic downturn. However, there was less velocity in the transaction market for all types of seniors housing. The availability of financing wasn’t there. That is starting to change, but the economy did impact seniors housing and long-term care.