Continuing Care Retirement Communities

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 3,700 continuing care retirement communities (CCRCs) in the US provide assisted living with on-site skilled nursing facilities, independent living, assisted living, and skilled nursing services either on campus or at nearby facilities. These facilities involve a contract each resident signs, entitling them to a continuum of care in exchange for payment of an entrance fee and ongoing monthly fees.

Sensitivity to Capital Markets

Difficulty in obtaining financing or in re-financing existing debt can force CCRCs to delay needed renovations, postpone planned expansions, or prevent them from breaking ground.

Demographic Trends Grow Demand

Since January 2011, baby boomers have been turning age 65 at a rate of 10,000 per day - and this will continue for 20 years.

Industry size & Structure

The average CCRC has about 128 employees and generates $10.5 million in annual revenue.

    • There are about 3,700 CCRC firms in the US operating 5,300 facilities with $40 billion in annual revenue and 446,000 employees.
    • About half of facilities are "true" CCRCs offering care from independent living through skilled nursing under a contract that guarantees a continuum of care in exchange for an entrance fee and ongoing monthly fees.
    • About half of "true" CCRCs are affiliated with faith-based organizations, such as Presbyterian, Lutheran, Methodist, or Catholic churches.
    • Companies that own and operate multiple communities include Life Care Services and Erickson Living.
    • CCRCs are located in a range of geographical areas from urban to suburban to rural.
                              Industry Forecast
                              Continuing Care Retirement Communities Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              Jan 7, 2024 - Moderate Sales Growth Expected
                              • Continuing care retirement community industry sales are forecast to grow at a 5.5% compounded annual rate from 2022 to 2027, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Industry labor costs increased during the first 11 months of 2023 as employment increased moderately while average wages for nonsupervisory employees increased slightly.
                              • Residents of an Arizona retirement community can receive transit services offered by autonomous vehicle startup May Mobility. The company has been testing its shuttles with a backup safety driver in Sun City Arizona, a retirement community northwest of Phoenix, since April, and has now launched a driver-free service. A select group of "early riders" can use an app to request a driverless shuttle pickup to and from a variety of popular stops, including resident complexes, grocery stores, pharmacies, and medical centers.
                              • There has been a 4% drop in the number of retirement communities in the US over the past five years, according to the Best States to Retire 2023 report from financial research firm Scholaroo. Texas, California, and Ohio — which have the highest number of retirement communicates — showed an average drop of 2.6% in the number of retirement communities. Florida was the only one of the 10 states with the highest number of retirement communities to show growth, with an increase of 0.72%.
                              • Rate increases could drive some prospective senior living residents away from many facilities, according to specialty investment bank Ziegler. An analysis of second-quarter occupancy and inventory changes in both continuing care retirement (CCRC) / life plan communities and non-CCRCs shows that even high-end properties with premium amenities are not immune to resident sensitivity to rate increases. Monthly average asking rents for CCRCs remained higher across all segments, but other types of senior living and care communities had larger rate increases from 2022 levels across all segments, with the exception of nursing homes. The highest year-over-year rent growth for non-CCRCs was seen in assisted living and memory care (both 5.9%), followed by independent living (5.8%) and skilled nursing (2.9%). Asking rents for CCRCs saw the largest annual growth in assisted living (5%) and memory care (5.3%), followed by independent living and skilled nursing (both 4.3%).
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