2019 Q1 Senior Housing Portfolio Rankings

February 06, 2019

Net-worth-qualified senior households by metropolitan area in 2019

Map of households age 80+ years with household net worth of at least $250,000 in 2019 by metropolitan area in continental US.
Source: StratoDem Analytics

Introduction

  • Senior living owners in large markets have nearly four times as many senior households within five miles as those with less dense exposure to seniors.
  • The top senior living owners for concentration of net-worth-qualified senior households have 40-50% higher concentration of households age 80+ with at least $250,000 in household net worth in 2019 compared to lower-ranked owners.
  • Top-ranked owners by senior household wealth have roughly double the median household net worth for 80+ households compared to the bottom five large senior living owners.

Methodology

This analysis includes 36 senior living owners with publicly available portfolio definitions, drawn from the list of top senior living owners in the ASHA 50 rankings. A five-mile ring was drawn around each asset in a senior living owner’s portfolio to define each market area.

Portfolios are compared based on the median property in each portfolio. For example, the median market area in the Belmont Village portfolio has 7,502 households age 80+ within the five-mile ring, while the median market area in the Atria Senior Living portfolio has 6,468 households age 80+ within a five-mile ring. The 25th and 75th percentiles are included to provide a sense of intra-portfolio variability.

The cutoff for “net-worth-qualified senior households” is age 80+ with household net worth of at least $250,000. While the StratoDem Research Suite provides estimates of households by net worth bands from $25,000 to $2.5MM, StratoDem Analytics clients typically use $250,000 as a starting point for net-worth-qualified age 80+ households.

Map of 2019 median household net worth for 80+ households in 5-mile rings around Los Angeles-area senior living properties for sample senior living owner portfolio

Map of 2019 median household net worth for 80+ households in 5-mile rings around Los Angeles-area senior living properties for sample senior living owner portfolio
Source: StratoDem Analytics

Senior household density varies dramatically between (and within) owners

Of owners with at least 20 senior living properties, the top five ranked owners for greatest exposure to 80+ households within five-miles of the median property in the portfolio are:

Number of households age 80+
Owner 25th percentile Median asset 75th percentile # Assets tracked
1. Senior Resource Group 5,801 9,065 11,554 33
2. Belmont Village 4,799 7,502 12,601 30
3. Atria Senior Living 3,274 6,468 8,678 42
4. Sunrise Senior Living 3,911 5,918 8,802 280
5. Pacifica Senior Living 3,244 5,853 9,454 67
Portfolio summary of number of households age 80+ within five miles of each asset in senior living owner portfolio
Source: StratoDem Analytics

We note a couple of important observations from household density rankings:

  1. The top senior living owners are in substantially denser markets. Senior Resource Group, for example, is in markets more than four times the density of the bottom five senior living owners, who have fewer than 2,500 households age 80+ in their respective median property market areas.
  2. Within senior living owner portfolios, there is a high level of variation for senior household density. The top 25% of properties in the Pacifica Senior Living portfolio are nearly three times as dense as the bottom 25%, and for (lower-ranked) Bridge Seniors Housing, that ratio is more than four-and-a-half times.

Geographic selection determines exposure to higher-net-worth senior households

A second key metric for identifying market demand potential is the share of all households that are net-worth-qualified senior households (Householder age 80+ years with at least $250,000 in net worth). Of owners with at least 20 senior living properties, the top five by share of net-worth-qualified senior households are:

80+ HH with $250,000+ in net worth, % of all HH
Owner 25th percentile Median asset 75th percentile # Assets tracked
1. Brightview Senior Living 3.80% 4.43% 4.85% 42
2. Benchmark Senior Living 3.04% 3.83% 4.83% 60
3. Senior Resource Group 3.36% 3.79% 4.66% 33
4. Erickson Living 3.12% 3.77% 4.97% 21
4. USA Properties 3.12% 3.67% 4.11% 47
Portfolio summary of percentage of households that are age 80+ with $250,000 in net worth within five miles of each asset in senior living owner portfolio
Source: StratoDem Analytics

Two observations from the qualified household concentration rankings:

  1. The median property in the Brightview Senior Living portfolio is in a market area with roughly 1.5x the concentration of higher-net-worth 80+ households for its median property compared to bottom five owners, and roughly 1.4x the concentration of the median for all senior living owners.
  2. Benchmark Senior Living and Erickson Living have some of the highest gaps in concentration between the top 25% of properties and bottom 25% of properties, at a nearly 1.6x ratio. For Erickson Living, this means that its top five (75th percentile) markets are substantially better positioned for exposure to net worth qualified senior households compared to the bottom five (25th percentile).

Household wealth discrepancies between senior living owner portfolios

For a metric measuring broad ability to pay, median senior (age 80+) household net worth is a good choice. Of owners with at least 20 senior living properties, the top five by median senior household net worth are:

Median household net worth, 80+ households
Owner 25th percentile Median asset 75th percentile # Assets tracked
1. USA Properties $285,858 $364,242 $438,139 47
2. Brightview Senior Living $291,372 $360,111 $414,893 42
3. Senior Resource Group $252,418 $359,663 $403,893 33
4. Belmont Village $238,877 $352,699 $479,975 30
5. Kisco Senior Living $261,122 $347,972 $426,065 20
Portfolio summary of median household net worth for households age 80+ within five miles of each asset in senior living owner portfolio
Source: StratoDem Analytics

Two observations from senior household net worth rankings:

  1. The gap between the top five owners and bottom five owners for median senior household net worth is roughly a 2x margin ($350,000 for top five, $185,000 for bottom five), which creates large affordability and pricing differences.
  2. Brightview Senior Living has one of the smallest gaps in median senior household net worth (1.4x margin between top 10 and bottom 10 properties), while Belmont Village has one of the largest gaps (more than 2x margin between 75th and 25th percentiles).

Forecast growth gap of 7.5% between top- and bottom-ranked owners in net-worth qualified senior households

In addition to current positioning, the StratoDem Research Suite also ranks senior living owners by forecast growth of economic and geo-demographic factors, including households age 80+ with household net worth of $250,000 or higher. Of owners with at least 20 senior living properties, the top five for forecast growth of net-worth-qualified senior households are:

Percent growth in households 80+, $250,000+ net worth, 2019-2024
Owner 25th percentile Median asset 75th percentile # Assets tracked
1. Highridge Costa +20.4% +23.1% +25.5% 74
2. Westminster Communities +19.7% +23.0% +24.1% 42
3. Pacifica Senior Living +19.9% +23.0% +26.4% 67
4. Merrill Gardens +20.7% +22.4% +26.3% 30
5. MBK Senior Living +21.3% +22.3% +23.6% 34
Portfolio summary of growth rate for households age 80+ with at least $250,000 in net worth within five miles of each asset in senior living owner portfolio
Source: StratoDem Analytics

Two observations from forecast growth in net-worth-qualified senior households for senior housing owners:

  1. Despite having a lower ranked median property, the top quarter of Pacifica Senior Living properties are located in markets expected to outperform the top quarter of properties in both Highridge Costa and Westminster Communities for forecast net-worth-qualified senior household growth.
  2. Atria Senior Living and Sunrise Senior Living will see their market area growth accelerate at the median by 4-5% for 2019-2024 compared to the past five years. For the top 25% of properties in those portfolios, however, the growth rate will decrease slightly.

Interested in learning more?

The StratoDem Research Suite provides analytical tools to create portfolio rankings in senior living and other real estate sectors. See more on the full suite of economic and geo-demographic research and forecasting tools for customization, including higher levels of net worth or age restrictions for senior living analysis.

To set up some time for an introductory call or to learn more about the senior living owner rankings, please contact us.

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