Q3 2019 Senior Housing Portfolio Rankings

September 05, 2019

2014-2019 change in net-worth-qualified senior households by metropolitan area

Map of 2014-2019 change in households age 80+ years with household net worth of at least $250,000 by metropolitan area in continental US.
Source: StratoDem Analytics

Introduction

  • Ranking of 39 seniors housing owners with publicly available portfolios highlights the differences in the depth of demand, net-worth-qualified demand, and demand outlook for their properties.
  • The density and concentration of age 80+ households varies considerably within and across owner portfolios, emphasising the need for micro-location strategies to meet local area demand.
  • The top five owners by median household net worth for age 80+ households is double that of the bottom five owners.

Methodology

This analysis includes 39 seniors housing owners with publicly available property portfolios, selected from the list of top senior living owners in the American Seniors Housing Association (ASHA) 50 rankings. A five-mile ring was drawn around each asset for these 39 seniors housing portfolios to define a market area for each owner.

Portfolios are compared based on the median property in each portfolio. For example, the median market area in the Belmont Village portfolio has 7,361 households age 80+ within the five-mile ring, while the median market area in Atria Senior Living’s portfolio has 6,611 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 by Phoenix-area ZIP code

Map of 2019 median household net worth for 80+ households by Phoenix-area ZIP code
Source: StratoDem Analytics

Senior household density

The potential depth of demand from the local market area can vary substantially across and within seniors housing portfolios.

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 5,820 8,690 11,037 33
2. Belmont Village 4,914 6,611 8,886 30
3. Atria Senior Living 3,390 6,611 8,886 42
4. Allegro Senior Living 4,094 6,493 10,602 27
5. Sunrise Senior Living 3,867 6,041 8,606 280
Portfolio summary of number of households age 80+ within five miles of each asset in senior living owner portfolio
Source: StratoDem Analytics

Observations:

  1. Ranked by number of households age 80+ within five-miles of the median property, top-ranked Senior Resource Group has 8,690 of these households surrounding their median property, while their 75th percentile property has 1.9x the 80+ households as their 25th percentile property.
  2. Compared to the 1Q 2019 rankings, Allegro is new to the top five owners by number of households age 80+ within a five-mile radius of its median property, replacing Pacifica Senior Living, which slipped to 6th place with 5,792 age 80+ households in a five-mile radius of its median property.

Demand concentration

To identify potential market demand, a key metric is the concentration of net-worth-qualified senior households (householder age 80+ years with at least $250,000 in net worth) as a share of total households.

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 3.85% 4.40% 5.07% 42
2. Erickson Living 3.40% 4.05% 5.29% 63
3. Benchmark Senior Living 3.03% 3.95% 5.00% 63
4. Sunrise Senior Living 3.09% 3.84% 4.76% 280
5. USA Properties 2.97% 3.75% 4.23% 47
5. (tie) Senior Resource Group 3.23% 3.75% 4.52% 33
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

Observations:

  1. The highest five-mile concentration of net-worth qualified senior households for the median property of the 35 owners with more than 20 properties is 4.40%, for Brightview Senior Living. Only two owners have a 4%+ concentration of these households at their median property.
  2. Sunrise Senior Living is new to the top five for net-worth-qualified senior households versus the first quarter rankings in a tie with Senior Resource Group at 3.75% of all households within a five-mile radius of their respective median properties.

Household wealth

To estimate ability to pay in a market area, 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 $289,315 $369,483 $441,518 47
2. Senior Resource Group $253,416 $361,643 $413,169 33
3. Brightview Senior Living $293,274 $360,446 $417,380 42
4. Belmont Village $239,875 $355,480 $492,405 30
5. Sunrise Senior Living $255,406 $332,951 $445,269 280
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

Observations:

  1. Median household net worth for these top five owners averages $356,000, which is 2x the average of the bottom five ranked owners. For both groups, it is important to provide the right seniors housing unit types to meet the need in their local market area.
  2. The top four owners held on from the 1Q 2019 rankings, while Sunrise Senior Living edged up to take fifth place from Kisco Senior Living. Kisco would have held its place with median household net worth for age 80+ at $353,062, but fell just shy of the 20-property threshold for the ranks.

Household growth forecast

Beyond current property positioning, the StratoDem Research Suite 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. MBK Senior Living +22.6% +24.3% +27.3% 32
2. Presbyterian Homes +19.5% +23.8% +27.5% 49
3. Merrill Gardens +19.7% +23.6% +33.2% 33
4. Bridge +18.2% +23.5% +30.9% 87
5. Pacifica Senior Living +19.5% +23.3% +27.0% 67
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

Observations:

  1. The spread between growth in net-worth-qualified senior household at the top of this ranking and the bottom of this ranking is 7.5%. The top five owners can expect to see 1.4x the expansion in demand potential as the bottom five owners.
  2. Relative to the 1Q 2019 rankings, MBK moved from fifth to first place as demand growth expectations at their median property moved from 22.3% to 24.3%.

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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