by Dan Rafter
Thomas O’Brien, vice president of Hickory Hills, Ill.-based Henry Bros. Co., is familiar with the changing demands consumers have for seniors housing. His company has built, or is building, seniors housing facilities across Illinois. He knows that as the Baby Boomers age they’re looking for more amenities and flexibility in their seniors housing options. O’Brien recently spoke with Illinois Real Estate Journal about the changing world of seniors housing.
Illinois Real Estate Journal: Are you seeing more demand for seniors housing.
Thomas O’Brien: Yes, we are. The Baby Boomers are getting older. That’s a big deal. It’s changing the types of facilities that we are being asked to build.
IREJ: What are some of the reasons for the rising demand in seniors housing?
O’Brien: Many of the facilities are getting older. They no longer meet the needs of seniors. Then there are the demographics, which is the most important thing. When you take a step back and look at the seniors housing market from 30,000 feet, you see that the demographics are dramatically changing this side of the business.
IREJ: Does much of this have to do with the Baby Boomers getting older?
O’Brien: The Baby Boomers, those born from 1946 through 1963 or 1964, constitute about 79 million people or about 26 percent of the population. That cohort is, as the Boomers age, looking at alternative housing options. They are looking at a wide range of housing types. You have the go-gos, the seniors who will be looking for independent-living options. You have the slow-gos, who will be looking at the assisted-living centers. Then you have the no-gos, those seniors who will be looking for skilled-nursing facilities. We are going to have to provide more of all of these types of facilities to meet the needs of the aging Baby Boomers.
IREJ: The number of Boomers suggests that demand for seniors housing will really be on the upswing in the next decades.
O’Brien: Between 2010 and 2020, somewhere between 10.6 million and 11.3 million seniors will be selling their homes and moving into a different type of housing facilities. Between 2020 and 2030, there will be between 14.4 million and 15 million selling their homes. This means that between 2010 and 2030, there will be 25 to 26 million homes occupied by seniors that will be sold. There is a big bubble coming there. What type of seniors housing will these Boomers want? What will the relationship be between what people expect and what they can afford? These are big questions that we can’t resolve now. There is a major wave that is coming. How is this demand going to be met by the product that is offered out there? Will the seniors who need this housing be able to afford it?
IREJ: What will the Baby Boomers want when it comes to seniors housing?
O’Brien: The biggest thing about Boomers, and this is a broad-brush statement, is that they expect more than their parents did in terms of options and flexibility. The facilities that worked 15 to 20 years ago won’t in all likelihood meet the demands and tastes of the Baby Boomers. We are helping a lot of long-term care providers now who know that they need to upgrade their skilled-nursing facilities to meet the demand and remain viable and competitive.
IREJ: Can you provide an example of the flexibility that people will be looking for?
O’Brien: Facilities might have to adopt more of a concierge or hospitality approach. Seniors might not necessarily want to eat breakfast between 7 and 9. In a lot of places, breakfast is structured and scheduled in certain time slots. Facilities might have to offer more of a café style. If you want to show up and eat between 7 and 9, you can do that. But if you want breakfast at a different time, you can eat later in the day, too.
IREJ: This seems to be an exciting time to be in the seniors housing industry.
O’Brien: It is going to be a challenge meeting the need and demand for affordable seniors housing. That is the challenge for the industry and for society in general. How do we not disappoint the Baby Boomers? How do we meet their needs in a more affordable way? Not everyone can afford to spend $7,000 a month for assisted-living care or skilled-nursing.